This case (Apotex v. Canada (Health), 2016 FC 673) involves a very unique set of circumstances. An underlying Health Canada decision was found to have been made for an improper purpose and carried out unfairly. This decision was apparently perpetuated in identical form in a subsequent decision without an evidentiary or lawful basis to do so and the subsequent decision was, therefore, found to be unlawful as well.
In September 2014, following a series of articles in the Toronto Star criticizing the Health Canada’s inaction in relation to Apotex imports from India, Health Canada imposed terms and conditions on Apotex’s establishment licences at the facilities in India that prevented the import and sale of drug products from these facilities.
In June 2015, Health Canada inspected the facilities in India. The overall inspection team recommendation conveyed that no instances of data integrity violations were identified (a major issue related to the terms and conditions). Accordingly, in August 2015 Health Canada advised Apotex that it has amended the terms and conditions of the establishment licences—the products made after the inspection were not banned completely, but were subject to additional testing and reporting requirements.
In March 2016, the Minister issued a decision removing all terms and conditions on Apotex’s establishment licences at the facilities in India.
Initial Legal Action
Apotex brought a first Judicial Review of Health Canada’s 2014 decision to vary the terms and conditions of the establishment licences and the import ban. Prior to the hearing for Judicial Review, the Minister brought a motion for mootness. This motion was dismissed (Apotex Inc v Canada (Health), 2015 FC 1157).
On Judicial Review, the Court quashed Health Canada’s decisions, finding that they were motivated by criticism in the media and House of Commons, rather than the a legitimate concern for the health and safety of Canadians (Apotex Inc v Canada (Health), 2015 FC 1161).
Most Recent Legal Action
In this second Judicial Review, Apotex sought an order declaring the August 2015 decision unlawful, as well as an order prohibiting Health Canada from further carrying into effect the importation ban by varying Apotex’s establishment licences for the facilities in India.
Health Canada contended that its March 2016 decision removed the terms and conditions imposed on the Apotex facilities. Essentially, the relief sought by Apotex in this application had already been achieved.
The Court agreed that this Judicial Review was moot.
However, the Court exercised its discretion to hear the case and found that the August 2015 decision was unlawful.
The Court reviewed the decision on a correctness standard. This was a legal question that involved determining the effect of amending, carrying forward and maintaining a decision that was subsequently quashed on the basis that it was implemented unfairly and for an improper purpose.
In the first Judicial Review, the Court found that the importation ban was motivated by the Minister’s desire to silence criticism from the media and the House of Commons, an improper purpose.
In this case, the Court found that the August 2015 decision was unlawful because of the close interconnection between the decision and the importation ban, as well as the lack of evidence before the Minister that supported any reasonable belief that the importation ban was necessary in August 2015. Essentially, the August 2015 decision was the perpetuation of a decision motivated by a purpose outside the Minister’s authority, and therefore not in accordance with the rule of law.
Full judgment and reasons are available here.