In The Winning Combination Inc. v. Canada (2016 FC 381), the Federal Court found that Health Canada demonstrated bias, prejudgment and prevented The Winning Combination (“TWC”) from fully and fairly participating in the licensing process. Accordingly, the Court quashed Health Canada’s decisions and awarded TWC full costs.

This was a judicial review of a series of related Health Canada decisions regarding the TWC product Resolve, a smoking cession aid. There is a long history associated with this dispute, involving a convoluted set of decisions by Health Products and Food Branch Inspectorate (“HPFBI”) and the Natural and Non-Prescription Health Products Directorate (as they are now, “NHPD”), as well as a trade complaint submitted by Pfizer. As a result, TWC was required to deal with Health Canada from both a licensing and compliance perspective.Between the initial Product Licence Application (“PLA”) in 2004 and the final rejection in 2012, there were two major decisions at issue:

  1. July 2007 decision to reject TWC’s PLA based on safety and efficacy concerns; and
  2. August 2007 decision to reject TWC’s PLA on the basis that Resolve was not a Natural Health Product (“NHP”).

Despite these two major decisions, NHPD continued to consider and invite reconsideration applications from TWC suggesting that NHPD was open to changing its mind. In this judicial review, TWC alleged both individual and institutional bias, as well as procedural unfairness.

The Court determined that Health Canada did not provide procedural fairness regarding the declassification of Resolve as a NHP. Based on the evidence before the Court, this decision was hurriedly instigated, without notice or warning, and despite the fact that previous decisions and communications confirmed the understanding that Resolve was considered a NHP. The Court found that the process was fraught with unfairness because:

  • The Health Canada experts were deeply connected with Dr. Marles, the Director of the Bureau of Clinical Trials and Health Science, and would more likely than not support his opinion. For example, one of the experts was Dr. Marles’ postdoctoral supervisor and he had co-authored a number of scientific reports with the experts.
  • No independent lab testing was conducted to refute TWC’s testing.
  • A peer-reviewed, scientific publication supported TWC’s assertion of the NHP in Resolve.
  • Health Canada relied on allegations and arguments without providing TWC with the opportunity to respond.

The Court also noted that an administrative decision made without procedural fairness cannot be cured by allowing a reconsideration process.

Remedies were problematic in this case. Typically, in a successful judicial review, the remedy is to quash the decision at issue and return the matter for reconsideration by a differently constituted tribunal. Based on the history in this case, including bias, substantial unfairness and sustained unreasonableness in this case, the Court was of the view that it would be unlikely that this approach would even be possible.

Furthermore, the Court stated that most of the errors it had identified related to the conduct of Dr. Marles, whose role was supposed to have been no more than a scientific advisor, in a system with checks and balances. The Court concluded that system had not functioned properly. Accordingly, it was not evident to the Court that that the same system could fairly reconsider this matter. Besides, any reconsideration that TWC experienced up to this point was far from impartial and fair.

Additionally, the Court found that the evidence before it established that:

  • There were no outstanding safety concerns over Resolve.
  • The NHP efficacy test (as construed by the Court) was satisfied.
  • The active ingredient in Resolve is a NHP.

Accordingly, there was no justification for the Minister to withhold the PLA licence for Resolve.

Due to the prolonged dispute, TWC had been unable to market Resolve for eight years for no justifiable reason. The Court recognized the dysfunctional licensing process that TWC was required to contend with and described Health Canada’s behaviour as reprehensible. Accordingly, the court awarded TWC full costs, estimated to be $1-million. Furthermore, the decisions at issue were quashed and an, in their place, an order for mandamus was issued requiring the Minister to grant a license.

Health Canada is appealing this decision.