TMXmoneyTMXmoney - invest with insight

Arbitration tribunal backs FDA in NAFTA dispute with generic drug firm Apotex

The Canadian Press

TORONTO - Generic drug company Apotex Inc. said Tuesday an arbitration tribunal has rejected its claims that the U.S. Food and Drug Administration violated the North American Free Trade Agreement by prohibiting imports of Apotex products from two Ontario plants for nearly two years.

Apotex president and chief executive Jeremy Desai said the company was disappointed by the decision.

"We remain strongly committed to the U.S. market and we continue to work closely with the FDA to resolve all outstanding issues and to achieve our shared objective of expanding the public's access to quality, affordable generic medicines," Desai said in a statement.

The U.S. Food and Drug Administration placed an import alert on two Apotex plants in Ontario on Aug. 28, 2009, that prevented the shipment of drugs they produced to the U.S.

The alert followed concerns raised by FDA inspections of the plants, however, Apotex accused the U.S. regulator of treating U.S. companies more favourably in similar circumstances.

A subsequent Health Canada inspection found manufacturing processes could be improved in ways that the company was addressing, but both plants were compliant. European, Australian and New Zealand regulators also followed the Health Canada determination.

The company said the two plants produced about 80 per cent of the products sold by Apotex's U.S. operations.

The import alert was lifted for the Etobicoke plant on June 15, 2011, while the alert applied to the Signet plant until July 29, 2011.

Apotex said the damages due to the alert totalled more than US$520 million because of the losses at its U.S. operations.