Background
As previously reported, in 2016 the Federal Court of Appeal set aside a decision of the Federal Court awarding Teva close to $125 million in damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations for its venlafaxine hydrochloride product (Pfizer’s EFFEXOR XR): Teva Canada Limited v Pfizer Canada Inc, 2014 FC 248, further reasons 2014 FC 634.
The Court of Appeal set aside the Federal Court’s decision based on the Court’s reliance on inadmissible hearsay evidence: 2016 FCA 161. The main factual issue was whether Teva (then ratiopharm) had sufficient capacity to supply the market during the “but-for” period. The Court of Appeal found that Teva had adduced no direct evidence from the manufacturer of its venlafaxine product, Alembic, regarding its ability to supply the market. Teva relied instead on the evidence of a former ratiopharm executive, Mr. Major, who had only general knowledge of the relationship between ratiopharm and Alembic. In its decision, the Federal Court relied on unauthenticated emails that the Court of Appeal found to be “at least double hearsay on the issue of what Alembic could have or would have done” and perhaps “triple hearsay or even more”. The Court of Appeal remitted the matter to the Federal Court to redetermine the issue of whether Teva is entitled to damages and if so, to what extent. Teva’s application for leave to appeal to the Supreme Court was dismissed on January 19, 2017: SCC Case No. 37162.
Redetermination by the Federal Court
On May 26, 2017, the Federal Court rendered its redetermination decision, reaffirming and reissuing its prior judgments in the matter: 2017 FC 526
Preliminary objection by Pfizer regarding other inadmissible evidence
Pfizer argued that the judge could not consider certain evidence in the trial record on the basis that it, like the evidence to which the Court of Appeal had objected, was hearsay. The Court rejected this argument.
The “Would Have” and “Could Have” Analyses
As in its previous decision, the Court found that ratiopharm both would have and could have supplied the market with generic venlafaxine during the but-for period of January 2006 to August 2007. For both branches of the test, the Court relied mainly on “the fact that Ratiopharm had previously taken the required and appropriate steps to be in a position to [supply the market] in January 2006”.
In doing so, the Court again relied on Mr. Major’s evidence as to Alembic’s capacity, including that:
- Alembic had manufactured quantities of generic venlafaxine for a proposed January 2006 launch;
- Alembic had produced biobatches for the purpose of the abbreviated new drug submission, and had produced one full production-scale batch; and
- Had ratiopharm not directed Alembic to stand-down manufacturing, Alembic would have had “probably around 7 million” venlafaxine capsules in inventory.
With respect to market share, the Court concluded that ratiopharm would and could have supplied the generic venlafaxine market in the quantities found in the trial decision. It found this to be a reasonable and logical inference based on:
- The contractual commitment made by Alembic to supply “all of ratiopharm’s requirements” for generic venlafaxine;
- The existing relationship between ratiopharm and Alembic;
- The encapsulating capacity of Alembic;
- The surplus capacity of Alembic in the Relevant Period; and
- The steps to which ratiopharm would go to occupy the entire Canadian generic market.
Pfizer has appealed (Appeal Court File No. A-186-17).
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