The Federal Court of Appeal (FCA) has dismissed Apotex's appeal arising from its application to end Health Canada's requirement for additional information establishing the integrity of data from Indian drug manufacturing facilities. The FCA found that the Federal Court (FC) properly considered the evidence and that it did not err in finding that the decision to implement the requirement for additional information was not improperly motivated.

Background

This appeal arises from the third in a series of judicial-review applications by Apotex Inc. (Apotex) concerning regulatory intervention by Health Canada against drugs manufactured at facilities owned by Apotex affiliates in India.

The first two applications concerned an import ban on drugs manufactured at these facilities, implemented by the Health Products and Food Branch Inspectorate (Inspectorate) of Health Canada after Apotex informed the Inspectorate of issues concerning the integrity of testing data from these facilities. The FC quashed both the decision to impose the import ban, as well as a subsequent decision to vary the terms and conditions of establishment licences for these facilities, on the basis that they were motivated by an improper purpose.

The third application concerned additional limitations that were imposed with respect to approval of drugs manufactured at the Indian facilities. In November 2014, after being informed by the Inspectorate about the data integrity concerns, the Therapeutics Product Branch (TPD) of Health Canada told Apotex that it would not issue a Notice of Compliance (NOC) for drug submissions with data from these facilities, but would request further information as required. Apotex generally complied with the TPD's requests for additional information relating to data integrity, and NOCs were issued for drug submissions with data from the two Indian facilities. In May 2015, the TPD implemented a general policy requiring additional information to establish the reliability of data from facilities where there were data integrity concerns.

In October 2015, Apotex asked the TPD to remove the requirement for additional information in light of the FC quashing the import ban. The TPD refused to do so on the basis that the Court's decision did not address the reliability of data from the Indian facilities before Apotex implemented corrective and preventative measures, and because it was required by the general policy applicable to any drug submission for which there were concerns about data integrity.

Apotex applied for an order quashing the TPD's decision refusing to end the requirement and sought approval of other products obtained from these facilities. As we previously reported, the Federal Court dismissed Apotex's application, finding that the requirement for additional information to establish data integrity was not improperly motivated by the import ban. The Federal Court also found that maintaining the requirement for additional information was reasonable in light of genuine concerns about data integrity.

Standard of review

The FCA agreed with Apotex that the normal civil standard of review for findings of fact, i.e., palpable and overriding error, applied to the FC's decision regarding Health Canada's motivations. The Court rejected the Minister's submission that the proper standard of review was reasonableness, holding that the standard was appropriate on review of the administrative decision but not for findings of fact or mixed fact and law made in the first instance.

All of the Minister's evidence was considered

In response to the application, the Minister relied upon evidence from the Director General of the TPD. While the application was under reserve following the initial hearing, the Minister provided a correction to the Director General's evidence and produced additional documents, leading to further cross-examination and a hearing on the additional evidence. Apotex argued that the FC erred by considering the initial evidence separately from evidence that was later produced, testing conclusions regarding the former with the information in the latter. The FCA rejected this argument, holding that there is no prescriptive methodology for a judge at first instance to follow and finding that all of the evidence was considered.

No error in failing to draw an adverse inference from the Minister's evidence

The FCA held that the FC did not err by failing to draw an adverse inference against the Minister for not producing contemporaneous documents to establish the basis for the 2014 decision to require additional information and for not leading evidence from a witness with first-hand knowledge. Noting that the decision to draw such an inference is discretionary, the FCA held that Apotex did not ask the FC to do so regarding the evidence of witnesses and held that the scope of documentary production was appropriate.

No error regarding the motivation not to end the data integrity requirement imposed in 2014

The FCA held that the FC did not err in finding that the TPD's 2014 decision to require additional information to address data integrity was not improperly motivated, unlike the import ban, on the evidence before the Court. As there was no support for the proposition that the 2015 decision to maintain the requirement was tainted independently of the 2014 decision, there was no need for the FCA to consider this issue further.

Links to decisions:

FCA Decision: Apotex Inc v Canada (Health), 2018 FCA 147

FC Decision: Apotex Inc v Canada (Health), 2017 FC 315

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