Apotex Loses NAFTA Dispute with FDA

Aug. 27, 2014

Apotex Inc., the largest Canadian-owned pharmaceutical company, announced that a arbitration tribunal constituted under Chapter Eleven of the North American Free Trade Agreement has rejected the company's claims that the FDA violated NAFTA by prohibiting imports of Apotex products from two plants in Ontario, Canada.

Apotex had sought up to $1.5 billion in damages for losses allegedly caused by Import Alerts issued in 2009 by the U.S. FDA, as the result of plant inspections that revealed significant deviations from current good manufacturing practice.

"The FDA's import alert against our Etobicoke and Signet facilities effectively removed Apotex from the US solid-dose drug market for almost two years," said Dr. Jeremy B. Desai, Apotex's President and CEO.

In February 2012, Apotex Holdings Inc. and Apotex Inc. initiated arbitration against the United States. Last week, the tribunal unanimously concluded that the Import Alert was a lawful and appropriate exercise of FDA’s regulatory authority. The tribunal ordered Apotex to reimburse 100 percent of the United States’ legal costs and to pay 75 percent of the costs of arbitration.

A Canadian or Mexican business that contends it has been treated unjustly by the American judicial system can file a NAFTA dispute. (American businesses with similar complaints about Canadian or Mexican court judgments can do the same.) Under the NAFTA agreement the government whose court system is challenged is responsible for awards by the tribunals.

Read the detailed claim and tribunal decision