Pharma in brief - Canada: Federal Court Holds That Apotex Is Entitled To Section 8 Damages In Respect Of Omeprazole [LOSEC®]

Case: Apotex Inc. v. AstraZeneca Canada Inc.

Drug: Omeprazole (LOSEC)

Nature of case: Section 8 of the PM(NOC) Regulations – validity and liability issues

Date of decision: May 11, 2012

Overview

On May 11, 2012, the Federal Court issued a decision in a case brought by Apotex Inc. ("Apotex") against AstraZeneca Canada Inc. ("AstraZeneca") pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations (the "Regulations"). Apotex claimed damages allegedly sustained while it was prevented from marketing its generic omeprazole product as a result of prohibition proceedings initiated by AstraZeneca.

In this decision, the Court considered Apotex's entitlement to damages and the viability of defences put forward by AstraZeneca. Of note, this is the first reported decision of a hearing in which the Court conducted a "hot tubbing" examination of expert witnesses.

This case gives guidance to future section 8 cases consistent with the recent Ramipril section 8 decisions.1 In particular: (i) the first person has an evidentiary burden with respect to any facts intended to reduce or limit the second person's damages; and (ii) events that actually took place are the best indication of what would have happened in the "but for" world, unless there is a compelling reason to conclude otherwise.

Ultimately, the Court held that Apotex was entitled to compensation pursuant to section 8 of the Regulations and that none of the defences put forward by AstraZeneca should reduce or eliminate that entitlement. A reference will be held to determine the quantum of damages owed to Apotex.

Summary of findings

Validity of section 8 of the Regulations

AstraZeneca argued that Apotex should not be entitled to a remedy, as section 8 is invalid for a host of reasons. The Court rejected each of these arguments. The Court relied on a prior decision of the Federal Court of Appeal in Alendronate2 and held that section 8 is validly delegated legislation. The Court also held that section is not inconsistent with Canada's obligations under NAFTA or TRIPS and that international treaties cannot be relied upon to import an "abuse" requirement into section 8 of the Regulations.

Pending infringement action as a defence

The Court held that Apotex was a "second person" for the purposes of this proceeding, as it fell strictly within the scope of section 8 and because AstraZeneca treated it like a second person by commencing a prohibition application. The Court then...