



COURT OF APPEAL FOR ONTARIO

CITATION: Apotex Inc. v. Abbott Laboratories Limited, 2018
    ONCA 332

DATE: 20180405

DOCKET:
C63578 and C63585

Strathy C.J.O., Juriansz and Huscroft JJ.A

BETWEEN

Apotex Inc.

Plaintiff (Respondent)

and

Abbott Laboratories Limited, Takeda
    Pharmaceuticals Company Limited and Takeda Pharmaceuticals America Inc.

Defendants (Appellants)

AND BETWEEN

Abbott Laboratories Limited, Takeda
    Pharmaceuticals Company Limited and Takeda Pharmaceuticals America Inc.

Plaintiffs by counterclaim (Appellants)

and

Apotex Inc.

Defendant by counterclaim (Respondent)

Steven G. Mason and David A. Tait for the appellant
    Abbott Laboratories Ltd.

Christopher C. Van Barr and Kiernan Murphy for the
    appellant Takeda parties

Andrew R. Brodkin and Michael A. Wilson, for the
    respondent

Heard: December 6, 2017

On appeal from the order of Justice Michael G. Quigley of
    the Superior Court of Justice, dated June 5, 2017, with reasons reported at
    2017 ONSC 1348.

Huscroft J.A.:

OVERVIEW

[1]

This is the second appeal arising out of an action brought by Apotex
    against Abbott and Takeda, concerning the patented medicine
Prevacid
® and Apotexs generic drug
Apo-lansoprazole.

[2]

Apotexs action alleged losses caused by Abbott and
    Takeda arising out of steps they took to deny Apo-lansoprazole access to the
    market. Abbott and Takeda were granted partial summary judgment
dismissing
    Apotexs unjust enrichment claim,
and that decision was upheld
    by this court:
Apotex Inc. v. Abbott Laboratories, Limited
,
    2013 ONCA 555.

[3]

Apotexs claim for damages
continued.

Apotexs claimed damages for sales of Apo-lansoprazole
    that were lost during the period in which the drug could not be sold because of
    proceedings taken by Abbott and Takeda under
s. 6
of
    the
Patented Medicines (Notice of Compliance) Regulations
, SOR/93-133 (
NOC Regulations
). Those
    proceedings resulted in a stay of Apotexs application for approval to sell the
    drug, and so precluded its sale.

[4]

Abbott and Takeda brought a motion for summary
    judgment seeking to have Apotexs damages claim dismissed. That motion was
    dismissed. The motion judge concluded that, but for the proceedings taken by
    Abbott and Takeda, Apotex would have received approval from the Minister of
    Health to sell Apo-lansoprazole on April 17, 2007, and was therefore entitled
    to damages. The quantum of damages was left for determination at trial.

[5]

Abbott and Takeda appeal from the motion judges
    order dismissing their motion for summary judgment.

[6]

I would dismiss the appeal for the reasons that
    follow.

BACKGROUND

[7]

Apotex developed Apo-lansoprazole, a generic
    version of Abbott and Takedas drug, Prevacid
®
, and sought approval to sell its drug in Canada. It was required to
    obtain a Notice of Compliance (NOC) from the Minister of Health in order to do
    so, and to this end it filed an Abbreviated New Drug Submission (ANDS).

[8]

The
Food and Drug Regulations
, C.R.C., c.
    870, C.08.002.1 (1)(b)

require that generic drugs must be bioequivalent
    with the Canadian reference product, based on the pharmaceutical and, where the
    Minister considers it necessary, bioavailability characteristics.

[9]

Apotex submitted its ANDS for Apo-lansoprazole
    on February 2, 2006. It included two studies showing that it was the
    bioequivalent of Prevacid
®
: one
    study was conducted with participants eating a low-fat meal before taking the
    drug, and the other conducted with the participants fasting. Apotex served a
    Notice of Allegation (NOA) asserting that patents held by Abbott and Takeda
    were invalid or would not be infringed. In response, Abbott and Takeda
    commenced an application under s. 6 of
NOC Regulations
, which triggered
    an automatic stay prohibiting the Minister from approving Apotexs NOC for 24
    months, while the ANDS was under review.

[10]

In April 2007, a Health Canada clinical
    evaluator, Dr. Tam, concluded that the standards for bioequivalence had been
    met and recommended that a NOC be issued for the ANDS. On April 17, 2007,
    Apotex was advised by Dr. Sharma, the Acting Director General of the
    Therapeutic Products Directorate within Health Canada, that the review was
    complete and that, in accordance with the s. 6 procedure, the ANDS was placed
    on patent hold. This meant that Apo-lansoprazole would have been approved but
    for commencement of the s. 6 proceedings by Abbott and Takeda.

[11]

Later that year, on December 4, 2007, Health
    Canada informed Apotex that it no longer considered Apo-lansoprazole approvable
    and requested justification for the choice of a low-fat meal in the Apotex
    study, as opposed to a high-fat meal. On January 17, 2008 Apotex replied,
    arguing that it was clinically irrelevant to demonstrate bioequivalence with a
    high-fat meal because Prevacid
®
was itself therapeutically ineffective in these circumstances. Health Canada
    reiterated its request for a high-fat study on August 1, 2008, and Apotex sent
    the results of such a study on August 6, 2008. The study revealed that Apo-lansoprazole
    was not bioequivalent in these circumstances.

[12]

Health Canada sent Apotex a Notice of
    Non-Compliance  Withdrawal on March 6, 2009, reiterating that bioequivalence
    under both fasting and high-fat meal conditions was required. The ANDS for Apo-lansoprazole
    was considered withdrawn at that time, without prejudice to refilling.

[13]

Apotex invoked Health Canadas reconsideration
    process, pursuant to which a panel of experts reviewed the notice of
    non-compliance decision. On May 7, 2009, the panel recommended that Apo-lansoprazole
    be considered bioequivalent on the basis of the fasting and low-fat meal
    studies. As a result, on May 28, 2009 Health Canada rescinded the Notice of
    Non-Compliance  Withdrawal. The NOC for Apo-lansoprazole was issued in June,
    2009.

[14]

On their motion for summary judgment, Abbott and
    Takeda asserted that discovery revealed that Apotex could not receive and would
    not have received regulatory approval for Apo-lansoprazole in April 2007,
    because Apotexs submission to Health Canada did not comply with the regulatory
    rules in place at the time. They argued that, in light of this new information,
    Apotexs claim for damages was without foundation because it was predicated
    upon its regulatory submission for Apo-lansoprazole being approved, in the
    absence of the s. 6 proceedings, in April 2007.

THE MOTION JUDGES DECISION

[15]

The principal issue, as framed by the motion
    judge, was whether Apo-lansoprazole could not and would not have been
    approved in April 2007. If it could not or would not have been approved, Apotex
    could not claim damages under s. 8 of the
Patent Act
. If, however, it could or would have been approved but for the s. 6
    proceedings, then a trial would be required to determine the amount of damages
    due.

[16]

Abbott and Takedas core argument on the motion
    was that Dr. Sharma erred in issuing the Patent Hold letter. They submitted
    that absent this mistake, no NOC could have, would have, or should have been
    issued until final approval in June, 2009, following expiry of the two-year
    statutory stay period under s. 6. Thus, s. 8 damages could not have accrued to
    Apotex.

[17]

In a comprehensive 52-page judgment, the motion
    judge  who case-managed the litigation since 2011  found that, but for Abbott
    and Takedas s. 6 proceeding, Apotex could and would have received a NOC on
    April 17, 2007. Dr. Sharmas correspondence showed that Health Canada had
    completed its review of Apotexs ANDS and found it to be satisfactory and
    approvable, and would have issued a NOC for Apo-lansoprazole absent the s. 6
    proceedings.

[18]

The motion judge noted that the
Food
    and Drug Regulations

do not require any particular
    type of comparative study to demonstrate that a new drug is the pharmaceutical
    equivalent of the Canadian reference drug. Furthermore, the Ministers
    discretion to approve drugs is wide: the regulation requires that the ANDS
    include sufficient information and material to enable the Minister to make the
    required assessment of safety and effectiveness, and the Ministers discretion
    cannot lawfully be fettered by policy statements and/or guidance documents:
Apotex
    Inc. v. Canada (Attorney General)
(1993), 59 F.T.R. 85. Although
    the Health Canada Guidance Document reflects the Ministers preferences for the
    content of submissions, and in particular a high-fat meal test, it does not
    have the force of law and explicitly says so. It cannot preclude the Minister
    from reviewing a submission on the basis of its scientific merits. There was no
    evidence to support Abbott and Takedas theory that a high-fat study was
    required.

[19]

Accordingly, the motion judge concluded that
    there was no legal requirement that Apotex submit a high-fat study. Dr. Tam and
    the expert review panel were satisfied that bioequivalence had been established
    and it was open to Health Canada to approve Apo-lansoprazole for sale.

DISCUSSION

[20]

Abbott argues that the original approval of Apo-lansoprazole
    was based on a mistake. Approval was not granted until June 2, 2009, when
    Apotexs submission was approved in a different form.

[21]

Abbott submits that the motion judge made two
    palpable and overriding errors. First, the motion judge erred in concluding
    that the high-fat study played no part in the final review process. Second, the
    motion judge erred in concluding that because the ANDS was ultimately approved
    in the same form, the June 2, 2009 approval confirmed the April 17, 2007
    approval.

[22]

Takeda argues that the motion judge erred in
    three ways. First, the motion judge erred in finding that Apotexs April 2007
    submission was sufficient and that Apo-lansoprazole could be approved without a
    high-fat study. Second, the motion judge erred in conflating Apotexs product
    and submission; the safety and effectiveness of Apo-lansoprazole in 2007 was
    irrelevant because Apotexs submission was not sufficient to allow the Minister
    to determine whether it was. Third, the motion judge erred by substituting his
    determination as to the sufficiency of Apotexs submission for that of the
    Minister.

[23]

All of these arguments are variations on a
    theme: the motion judge erred concerning the significance of the high-fat study
    to the Ministers decision.

[24]

In my view the motion judge made no error, much
    less a palpable and overriding error, in concluding that Apotex would have
    received a NOC for Apo-lansoprazole on April 17, 2007, if the s. 6 proceedings had
    not been commenced by the appellants. On the contrary, there was ample evidence
    to support the motion judges decision. I highlight the evidence of Dr. Craig
    Simon (Associate Director of BPS) and Ms. Suzanne Picard in this regard.

[25]

Dr. Simons evidence established that Health
    Canada accepted Dr. Tams qualifications to conduct the bioequivalence
    assessments and make recommendations in his capacity as Acting Manager of the
    Bioequivalence assessment group. Dr. Simon testified unequivocally that Apotex
    would have received its NOC on April 16, 17, or 18, 2007, if s. 6 proceedings
    had not been instituted. This evidence was not challenged by Abbott and Takeda
    and, as the motion judge observed, there was no evidence to the contrary.

[26]

Ms. Picard, an expert retained by Apotex,
    prepared a lengthy and detailed affidavit in support of Apotexs position and
    was cross-examined on it. Her evidence was that Apotex would have been granted
    an NOC on or about April 17, 2007 and that, if any concern had arisen about the
    bioequivalence of a low-fat study, the NOC would not have been suspended or
    revoked because there were no exceptional circumstances justifying such a
    decision: Health Canada never questioned the safety of Apo-lansoprazole. The
    motion judge found that Ms. Picards evidence was essentially unrefuted.

[27]

There is no basis to conclude that the Ministers
    subsequent determination had the effect of voiding the initial Patent Hold
    letter or rendering it void
ab initio
. It did
    not purport to revoke the earlier determination and did not have that effect. Nor
    can it be said that the initial approval was granted in error, such that a
    later date must be picked for the start of damages. I agree with the respondent
    that the Ministers subsequent determination could be relevant only to the
    quantum of damages Apotex may have suffered, and that is an issue for trial.

[28]

Finally, the motion judge did not err in
    concluding that there was no legal requirement to follow Health Canadas
    Guidance Document. It could not preclude the Minister from exercising her
    discretion to review a submission on the basis of its scientific merits, and
    there was no evidence, expert or otherwise, to support Abbott and Takedas position
    that a high-fat study was scientifically required.

CONCLUSION

[29]

I would dismiss the appeal.

[30]

If the parties are unable to agree on costs, they may make written
    submissions. The respondent shall deliver its submissions within 15 days and
    the appellants shall deliver their submissions within 15 days of receipt of the
    respondents submissions. The submissions shall not exceed 5 pages in length,
    excluding the costs outline.

Released: April 5, 2018 (G.R.S.)

Grant Huscroft J.A.

I agree. G.R. Strathy C.J.O.

I agree. R.G. Juriansz J.A.


