Minister’s Import Ban Against Apotex Enacted For Improper Purpose
On October 14, 2015, Justice Manson of the Federal Court released his judgment and reasons in Apotex’s judicial review of the Minister of Health’s import ban for products Apotex made at two of its Indian facilities (identified as APIPL and ARPL). Justice Manson concluded that the Minister acted with an improper purpose and quashed the import ban. The Minister and Health Canada were ordered to retract their public statements regarding the products made at these facilities.
GMP Compliance
During 2014, Health Canada had concerns about GMP compliance at APIPL and ARPL based on information it had gathered as well as information provided by the FDA. Health Canada informed Apotex of the non-compliance by APIPL and ARPL, and steps to become compliant were initiated. Prior to September 29, 2014, there had been no indication from Health Canada to Apotex that concerns about GMP compliance at either APIPL or ARPL could result in an import ban.
On September 11, 2014, a series of newspaper articles and editorials were published that were highly critical of Health Canada and the Minister of Health, portraying them as inept in comparison to the FDA. The articles incited strong questioning of the Minister in the House of Commons. On September 30, 2014, without notice, Health Canada advised Apotex that the Minister had implemented an import ban of products from APIPL and ARPL. Health Canada maintained it could not rely on data coming from APIPL and ARPL, and that due to the “new information” received from the FDA, it was re-reviewing the situation.
Apotex brought its judicial review on the basis that:
- the Minister acted unreasonably and unlawfully in her decision to implement the import ban;
- the Minister failed to act in accordance with the principles of natural justice; and
- the Minister acted outside of her regulatory powers conferred under the relevant legislation.
Standard of Review
The Court held that the standard of review is correctness for allegations of procedural fairness and that a correctness standard should also be applied to the issue of whether the Minister employed the correct statutory mechanisms to carry out the import ban. The Minister’s actual decision to implement the import ban should be reviewed on a standard of reasonableness, as this is a question of mixed fact and law.
Procedural Fairness
Justice Manson held that the Minister was procedurally unfair in that she failed to provide any notice and denied Apotex an opportunity to be heard before unilaterally imposing the import ban. She made an administrative decision that affected Apotex’s rights, privileges and interests, and Apotex was entitled to basic participatory rights and the required procedural fairness as set out in the Food and Drug Regulations.
Justice Manson concluded that notice must be given sufficiently in advance to allow for preparation and must provide adequate information to allow meaningful participation. The notice provided to Apotex was not proper as Apotex was informed of the import ban by phone on September 30, 2014, and via press releases issued by Health Canada and the Minister that day.
Improper Purpose
Justice Manson concluded that that it was more likely than not that an improper purpose was at play in the Minister’s decision to implement the import ban:
[104] … The way this Import Ban was carried out fell outside Health Canada’s customary regulatory practice, but publicly represented that they were going further than the US FDA.
[105] Further, if the Import Ban was motivated by the purpose of protecting health and safety, it is curious that the Minister and Health Canada would publicly assure that the banned drug products’ were safe and at no point issued any recall for those products available in the Canadian market. Upon cross-examination, the Respondents’ affiants stated that there was no evidence that products from APIPL or ARPL produced a risk or threat to the health of consumers.
…
[107] The above facts suggest that the Import Ban was motivated by the Minister’s desire to ease pressure triggered from the media and in the House of Commons – a purpose falling outside her delegated authority from the enabling legislation, which must be exercised in accordance with the rule of law. The Minister’s actions were therefore ultra vires and she erred in her exercise of jurisdiction by implementing an Import Ban on September 30, 2014. The public statements released on September 30, 2014, by the Minister and Health Canada constituted a manifestation of this improper purpose; they were a way for the Minister to publicly convey she was taking strong action and was not weaker than her US regulatory counterpart.
Justice Manson quashed the import ban on the basis that the Minister implemented an import ban that was motivated by an improper purpose, and without affording Apotex the procedural protections required by law. The Minister and Health Canada acted without jurisdiction in releasing public statements regarding the ban (which included statements potentially harmful to Apotex) to the media, and these statements were ordered to be retracted.
A copy of the Judgment and Reasons is available here.
Update
On November 2, 2015, the Health Canada issued the following statement (available here):
OTTAWA – On September 30, 2014, Health Canada published an Information Update and the Minister of Health issued a statement regarding a decision that had been made to restrict the importation of products from the following two Apotex facilities in India: Apotex Pharmachem India Pvt. Ltd. (APIPL) and Apotex Research Private Limited (ARPL).
On October 14, 2015, the Federal Court issued a judgment quashing the September 30, 2014 decision based on Health Canada and the Minister having proceeded unfairly and having acted for an improper purpose.
In accordance with the Court’s judgment, Health Canada hereby retracts its Information Update and the Minister retracts her statement, both dated September 30, 2014.