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Apotex suing US gov over FDA’s “devastating” import alert

By Nick Taylor , 15-Mar-2012

Apotex is suing the US government over an import alert it claims was unjust and had a “devastating impact” on business.

In a court filing Canada-based Apotex claims the US Food and Drug Administration (FDA) “decimated” generics sales by applying an import alert. Apotex takes issue with how the FDA handled the process but its main grievance, and justification for suing, is a perceived bias towards US and foreign firms.

Comparable US and foreign counterparts to Apotex…received more favourable treatment”, lawyers representing the Canadian company wrote in a court filing. Apotex claims this alleged bias violates the North American Free Trade Agreement (NAFTA) and cost it far more than $520m (€400m).

In making the claims Apotex cites the handling of GMP (good manufacturing practice) violations at a Teva plant in Jerusalem, Israel. Teva, an Israeli company with many US shareholders, received a FDA warning letter in January 2011 but the regulatory action never escalated to an import alert.

While Teva maintained its leading position in the US generics market, Apotex claims it slipped from the sixth biggest seller in early 2009 to 25th place two years later. For the duration of the import alert, which prevents shipping into the US, the FDA stopped processing generic applications from Apotex.

Apotex claims it operated under these conditions for longer than necessary. The FDA re-inspected the two Canadian facilities five months after Apotex asked it to visit. Apotex claims no GMP failings were found during the inspections but the import alert stayed in place for another five months.

Regulatory escalation

Grievances detailed in the filing begin long before the re-inspection process. Poor communication by the FDA is at the centre of many of the allegations and this contributed to Apotex feeling it was never given a fair hearing.

Despite the devastating impact that the measure had, and that FDA knew it would have, on Apotex investments, the import alert was adopted without the barest trappings of due process”, lawyers for Apotex wrote.

Among the lawyers listed on the court filing is Bart Legum, the former chief of the NAFTA Arbitration Division. Apotex has previously filed NAFTA arbitration claims related to a patent dispute with Pfizer.

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