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RE: Toronto Star Responses

1. Apotex, the court documents show, says the FDA has for years unfairly targeted the firm. In an affidavit, company vice president Ed Carey says that a particular FDA inspector, Peter Baker, “had a working conclusion in mind” before inspections and “he was looking for facts to support it.” He said other India factories — including one that supplies a main Apotex competitor, Teva — had similar troubles but suffered no consequences. Apotex CEO Jeremy Desai alleges there is “discrimination” by (FDA) inspectors. Why do you think Apotex has been discriminated against by the FDA?

We certainly cannot comment on a regulator’s relationship with another pharmaceutical company, nor do we claim to know the direct motivations behind regulatory actions.

What is clear from both FDA’s guidance to inspectors and the fact that import bans cannot be applied to plants within the US, is that there is a different enforcement process available to FDA for plants outside the US.

It is clear, from both FDA’s guidance to inspectors and the fact that import bans cannot be applied to plants within the US, that there is a different enforcement process available to FDA for plants outside the US.

With respect to whatever discrimination there may be among plants outside the US, we are not privy to the motivations.

2. Apotex has said Health Canada was not transparent and did not provide the “new information” that Health Canada said led to the ban. In the court filings – mainly the affidavits by Dr. Sharma and Ms. Chiponski – it seems Health Canada has provided this information. Despite your company's legal challenge about the permissibility of this information in the court context, what comment or reaction does Apotex have to Health Canada's reasons for the ban, as described in Sharma and Chiponski’s affidavits?

The import ban was NOT imposed on a basis that the APIPL or ARPL plants were not compliant. Indeed, that could not have been the case, as they were found compliant in the joint inspections. Moreover, in a letter to the editor published in the Toronto Star on September 20, 2014, Dr. Sharma stated: "Health Canada has also since conducted a follow-up inspection. At no time have we received evidence that the drug products' safety has been compromised.”

Instead, to justify the ban, Dr. Sharma purported to conclude that Apotex could not be trusted, on the basis that Apotex had allegedly falsified data and “all other information that Health Canada had about Apotex”. The Minister’s announcement also stated that it was being imposed because “strong action” is required when there is a ‘breach of trust”.

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We have repeatedly asked for disclosure of what data was falsified and by whom, and details of “all other information that Health Canada had about Apotex” that allegedly justified the ban. Nothing whatsoever has been disclosed that would justify the ban, and we believe that nothing exists.

3. In court documents as well as records from the recent NAFTA tribunal, Apotex is characterized by regulators (Health Canada, FDA and the U.S. government’s expert witness) as being in a state of denial of the magnitude of problems at its Indian plants. For example, one FDA source reportedly told Health Canada during the Sept. 29 conference call, it would take months if not years for the company to get a handle on the data integrity problems. Similarly, in the tribunal, the FDA’s expert witness said Apotex is like other companies who “frequently do not hear FDA clearly until FDA basically hits them alongside the head with a 2 by 4.”

If those statements were made, they were unwarranted and exaggerated. The observations by FDA as to “data integrity issues” were similar to those asserted by the same inspector at over 40 other plants inspected in the same timeframe. Also, both APIPL and ARPL plants subsequently inspected and found compliant by Health Canada, the UK and Australia.

That did not mean that the observations were not valid to some extent, but they certainly were not as significant as suggested. Moreover, any suggestion that Apotex was in denial of anything or that it would take “months if not years for the company to get a handle on the data integrity problems” was certainly unfounded and wrong. Apotex immediately took all appropriate steps to remedy any valid observation, as Apotex always does at every Apotex plant, to ensure that all plants are and remain among the best in the world.

Furthermore, within the last 2 weeks, there were new inspections by both the EDQM and Australia’s TGA, and both plants were once again found compliant, with no suggestion of data integrity issues. Apotex has also advised FDA that the plants stand ready for re-inspection by FDA.

4. At one of the Indian Apotex sites (APIPL), Health Canada inspectors determined the firm’s investigation into E. coli and Salmonella found in the facility’s demineralized water system was inadequate. What has Apotex done to address this problem?

We did not have microbes in our water system. The issue was related to a sampling problem. Apotex works diligently to ensure that all water involved in any processes at our Bangalore facilities is thoroughly filtered and sanitized prior to use, according to the most stringent regulatory standards. As soon as Apotex became aware of the possibility of microbes in the water system, we enlisted a third party to begin conducting a thorough investigation. This issue arose in a draft section of a report and was related to how the investigation was reported. The issue was addressed and our actions were included in the final report filed to Health Canada. There are no historic results nor any results since that have resulted in any water system-related issues whatsoever. All of our products are safe and effective, and none have come into contact with a contaminated water supply.

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5. In its internal EIR for its inspection of APIPL, the FDA said senior management at the same plant knew about the practice of discarding unfavorable lab results and retesting until they got a desirable outcome. This is a serious allegation by the U.S. inspectors. Does Apotex have a response to this?

A fair characterization would be that in some instances of an unfavourable result being discarded in favour of a passing result may have not been adequately documented as to the rationale, giving the impression of retesting until a desirable result was achieved. In fact, in each case, retesting was required and appropriate, because the unfavourable result was caused by analytical error. Additionally, no products were ever released that did not fully meet specification.

It should be also noted that all products are fully tested after receipt in Canada, and there was no instance in which products were found to fail to meet specification on testing in Canada.