Judge Phelan’s Comments for the Pharmaceutical Industry: Apotex Inc. v Canada (Minister of Health)

In Apotex Inc. v Canada (Minister of Health) (“Apotex”), the Federal Court (the “Court”) provided some guidance with respect to the procedure pharmaceutical companies should undertake to obtain a Notice of Compliance (“NOC”). Overall, the Court’s findings suggest that pharmaceutical companies should put their best foot forward in their application or on appeal in front of expert panels considering or reconsidering their applications because overturning an expert panel’s decision is often difficult with Courts showing deference to expert panels.

Background of the Case

On September 8, 2015, Apotex Inc. (“Apotex”) applied for judicial review of the Director General’s July 16, 2015 decision (the “Final SLS Decision”), denying Apotex’s Abbreviated New Drug Submission (“ANDS”) for 100 mg capsules of Apo-Progesterone. The Final SLS Decision was issued after a four-person internal panel of toxicological experts recommended upholding the Minister of Health’s decision to issue a notice of non-compliance (“NON”) on April 17, 2014 and a notice of non-compliance/withdrawal (“NON-W”) on December 29, 2014, citing concerns that the proposed formulation contained “unusually high levels” of Sodium Lauryl Sulfate (“SLS”), a non-medical ingredient used as an excipient.

Federal Court’s Response and Implications

Justice Phelan dismissed Apotex’s application for judicial review finding there was no reason to interfere with the Minister of Health’s decision. The decision raises several implications for stakeholders in the pharmaceutical and biochemical industry.

(a) Limits of Judicial Review

Courts are typically cautious to interfere with decisions made by an expert panel. This Court made several comments with respect to the panel affirming and supporting this deferential approach:

  1. ANDS applicants have a right and legitimate expectation to an independent and impartial panel, but cannot dictate the panel’s composition, in this case demanding an external panel. The Director General has the discretion to convene an internal or external panel as long as it is impartial. The Court considered whether the panel was impartial but otherwise made no comment regarding the Director General’s discretion to assemble the panel.
  2. The panel should be allowed to update itself on the “state of the art” using publicly available sources.
  3. The panel may comment on the nature and quality of the scientific evidence by referencing regulatory standards and is not required to draw the applicant out on front and centre issues.
  4. Panel members may have prepared notes during the hearing, so long as the ultimate decision is not cast in stone. This means that pharmaceutical companies should be attuned to how their submissions influence the decision-maker’s drafted conclusions to determine how preliminary the notes truly are. Some indicators include: whether the notes are merely preliminary thoughts, and whether the panel kept an open mind, accepted the applicant’s submissions and considered new information.

This deferential approach is in line with the other, albeit few judicial review decisions regarding NONs and NON-Ws, such as in Apotex Inc. v Canada (Minister of Health) (2009 FC 452), where Justice Phelan upheld the Minister of Health’s decision and noted that it was “sufficient that the Minister’s opinion or lack of satisfaction [be] rationally and adequately explained.” This deference may also be a result of the Minister of Health’s important task of ensuring that drugs that are on the market are safe and effective.

What has emerged, then, is a situation in which judicial review has become a tool of last resort and, even then, rarely results in a different decision. As a result, prospective ANDS applicants should consult counsel early and submit a fulsome ANDS in the first instance, as obtaining a favourable result after a request for reconsideration is often challenging.

(b) Evidence Relied On

The Court based its decision partly on the reasoning that Apotex put forward evidence that suffered from numerous shortcomings:

  1. Apotex’s claim that the US-FDA approved an Apotex product with higher maximum daily intake of SLS was missing information, did not address the drugs’ differing characteristics and did not address the other reasons why the excipient levels were approved.
  2. The evidence regarding toxicology of SLS was of low quality, included a study that the Bureau of Metabolism, Oncology and Reproductive Sciences rejected, was missing important information on the SLS such as tests and evaluations of toxicological endpoints, was sometimes unpublished and did not meet the current regulatory standards or comply with Good Laboratory Practice.

This highlights the importance of presenting comprehensive and persuasive studies to withstand detailed, technical and expert review. Submitting a few studies and stating that another jurisdiction approved a related drug is not, in other words, always sufficient.

(c) Timing

The Court considered Apotex’s late application. It reasoned that, while Apotex filed its application late in the honest but mistaken belief that the Director General’s communications with Apotex after the Final SLS Decision meant that the Director General would reconsider Apotex’s request, the Court could still consider Apotex’s application because Apotex had a reasonable explanation for the delay: if it filed for judicial review, any reconsideration would be terminated. As a result, pharmaceutical companies may, depending on the circumstances, still apply for judicial review after the deadline if they have a compelling explanation.