Federal Court Decisions

     T-1273-97

BETWEEN:

     MERCK FROSST CANADA INC.,

     -and-

     MERCK & CO., INC.,

     Applicants,

     - AND -

     THE MINISTER OF HEALTH,

     -and-

     THE ATTORNEY GENERAL FOR CANADA,

     Respondents.

     REASONS FOR ORDER

DUBÉ J:

     This motion by the applicants ("Merck") is for an interim injunction directing the respondent ("the Minister") to revoke or suspend the notice of compliance ("NOC") issued March 26, 1997 to Apotex Inc. ("Apotex") for lovastatin including the product monograph for same dated May 3, 1996.

     The grounds invoked by Merck are inter alia that no application for the issuance for that NOC existed (a prior application in respect thereto having been withdrawn); the lovastatin product ("Apo-lovastatin") is not made with the microbe obscurus as described in the monograph but with a different microbe ("Fuckelii"); no appropriate testing for safety and efficacy for either obscurus or fuckelii was carried out; and, the monograph makes no mention of warnings which could result in serious injury and even in the death of patients.

     Although an interim injunction (valid for 10 days only) may be applied for ex parte under Rule 469, Merck did serve notice on the Minister (and also on Apotex with reference to the interim injunction sought against it and heard at the same time). All parties appeared and both motions were debated extensively.

     It is common ground that an interim or interlocutory injunction is to be addressed in the light of three criteria: first, there must be a serious issue to be tried; second, the applicant must establish that it will suffer irreparable harm and, third, the balance of convenience.

     It seems obvious to me that Merck meets the first test which has a very low threshold. Undoubtedly, the matter is not frivolous and, at least in that sense and without addressing fully the merits of the case, there is a serious and complex issue to be tried.

     The second criteria, however, is a different matter. So, as to succeed the applicant must show that the prejudice it will suffer, if the injunction is not granted, will be irreparable: it cannot be adequately compensated by an award of damages.

     The affidavit of W.H. Guy Saheb, a Director of Merck, although very substantial on the merits of the case, is very thin on the crucial allegation of irreparable harm. Of course, the irreparable harm that must be established in this instance is not irreparable harm to the public or to the patients involved, but irreparable harm to Merck. On that score, Mr. Saheb claims that any adverse reaction by a patient to Apo-lovastatin "will seriously deteriorate the reputation of Merck's own product MEVACOR (lovastatin tablets) as a safe and efficacious drug, and that of Merck Frosst as a reliable drug manufacturer ... inasmuch as Merck is closely identified in the marketplace as the originator and largest supplier of lovastatin." Mr. Saheb states that the public will not distinguish between suppliers of lovastatin. More so, where patients are unaware that they are receiving Apotex's generic lovastatin because Apotex's tablets have an identical colour and shape to that of MEVACOR.

     Affiants employed by Merck have speculated on the possibility of a sizable loss of market share and goodwill, and the possibility some customers would not return to MEVACOR after switching to Apo-lovastatin before trial. Merck has threatened to withdraw funding for research conducted in Canada, and argued that it would suffer irreparably because the safety and efficacy of Apo-lovastatin for all indications are unknown.

     It must be borne in mind that the interim injunction applied for is merely a ten day injunction and not an interlocutory injunction lasting up to the trial of the issue. Thus, the applicant Merck must show that it will suffer irreparable harm during a ten day period. It is not an easy criteria to meet and, in my view, Merck has not succeeded.

     In Eli Lilly and Co. v. Novopharm Ltd.¹, the Court of Appeal dealing with an interlocutory injunction held that there must be clear evidence that the applicant for an injunction would suffer irreparable harm. It said as follows, at pp. 457 and 458:

It is trite law in our Court that a plaintiff seeking an interlocutory injunction must establish with clear evidence that it, as opposed to another person or party, will suffer irreparable harm. That burden is not an easy one for the remedy is an extraordinary one that will not be granted unless the applicant convinces the court, inter alia, that damages at common law would not provide an adequate remedy if the court refused to grant the injunction.

...

With respect, such a vague and self-serving statement by a representative of the respondents cannot alone satisfy the evidentiary burden they have to meet in this regard. The respondents must prove that the loss would be theirs ...

     With particular reference to an interlocutory injunction to restrain the Minister from granting a NOC to defendant Apotex, Rouleau J. of the Trial Division of the Federal Court said as follows in Glaxo Canada v. Min. of National Health & Welfare², at p. 214:

As a competitor of the defendant Apotex Inc. it is not surprising that the plaintiff is concerned with the decision of the Minister to grant Apotex a notice of compliance. Nevertheless, that concern does not, in my opinion, constitute a legal interest. The Minister's decision to grant Apotex a notice of compliance has not altered the plaintiff's legal rights or imposed legal obligations upon it in any way. As previously stated, a competitor such as the plaintiff does not have a right to interfere with official action affecting another competitor for the sole purpose of preventing the latter competitor from obtaining some advantage.

     With reference to irreparable harm based on loss of goodwill and reputation, my colleague MacKay J. in Merck & Co. Inc. v. Apotex Inc.³ made the following observations which are very relevant to the instant matter, at p. 183:

Here, it is urged that there is doubt as to the adequacy of damages as a remedy for the plaintiffs in the event they are successful at trial and their position is not now protected by an interlocutory injunction. Loss, or harm, is predicated on the anticipated loss to Merck Frosst of a minimum of 50% of its market for Vasotec once the Apotex Apo-enalapril is added to provincial drug formularies, resulting in devastating loss of sales for Merck Frosst. Moreover, the value of its goodwill will be seriously affected by loss of its market advantage as the only supplier of the most valuable, in sales terms, prescription drug in Canada. It is said its reputation as a leading innovator in the pharmaceutical field will also be adversely affected. Both its goodwill and its reputation, it is said, are at risk in view of potential harm that could arise with consumers of the Apotex tablets whose origin, age, shelf life and stability are unknown but which are identical in colour, size, shape and concentration to the plaintiffs' Vasotec brand. In my view, potential harm of this last sort cannot be more than speculative, given the issue of an NOC to Apotex authorizing sale of its product for consumption in Canada after satisfactory assessment of its safety and efficacy by the Health Protection Branch on behalf of the Minister of Health and Welfare. Moreover, I am not persuaded that Apotex's entry into the market for the drug in question will adversely affect the plaintiffs' reputation as a leading innovator in the pharmaceutical field. Important as this drug may be, the plaintiffs and defendant already are in competition in the market for other drugs without apparent adverse effect upon the plaintiffs' reputation. The entry of a generic producer into the market does not in itself adversely affect the reputation of the innovator whose product has become the model for the generic product.

(my emphasis)

     In the instant application, Merck placed much emphasis on the merits of its action against Apotex. At this stage of the proceedings, and more so where the applicant is merely seeking a ten day injunction, it is not for the motion judge to go very deeply into the merits of the case. Thus, the threshold of serious issue is very low: the motion judge merely has to decide whether or not there is some merit in the sense that it is not frivolous. However, the threshold of irreparable harm is very high. An injunction is an extraordinary remedy. It is discretionary. The Court ought not to grant it merely to favour one side at the expense of another in what is obviously an ongoing battle between two producers on the prescription drug market.

     Consequently, this application is denied. Costs in the cause.

O T T A W A

July 2, 1997

    

     Judge

__________________

¹      (1996), 69 C.P.R. (3d), 455, Federal Court of Appeal.

²      (1987), 18 C.P.R. (3d) 206.

³      (1993), 51 C.P.R. (3d) 170 (F.C.T.D.).