Winning Combination Inc. v. Canada (Health)

Winning Combination Inc. v. Canada (Health)
Court (s) Database
Federal Court Decisions
Date
2016-04-06
Neutral citation
2016 FC 381
File numbers
T-1381-07
Notes
Digest
Decision Content
Date: 20160406
Docket: T-1381-07
Citation: 2016 FC 381
Ottawa, Ontario, April 6, 2016
PRESENT: The Honourable Mr. Justice Russell
BETWEEN:
THE WINNING COMBINATION INC.
Applicant
and
CANADA (MINISTER OF HEALTH) AND
THE ATTORNEY GENERAL OF CANADA
Respondents
JUDGMENT AND REASONS
I. INTRODUCTION [1] This is an application under s 18.1 of the Federal Courts Act, RSC 1985, c F-7 for judicial review of a series of related decisions of Health Canada, and its subsidiary entities, with respect to The Winning Combination Inc’s [TWC] product, RESOLVE. The first decision, dated July 19, 2007 [First Decision], refused TWC’s Product Licence Application [PLA] based on safety and efficacy concerns. The second decision, dated August 21, 2007 [Second Decision], refused TWC’s PLA on the grounds that RESOLVE is a drug and not a natural health product [NHP]. TWC also seeks judicial review of all subsequent decisions of Health Canada and its subsidiary entities relating to the RESOLVE PLA that were issued during the reconsideration process between April 7, 2008 and January 30, 2012 [Subsequent Decisions].
II. BACKGROUND [2] TWC markets NHPs, including RESOLVE, a smoking cessation aid that employs a confidential active ingredient [Active Ingredient]. RESOLVE was marketed by the Applicant until July 2007.
[3] The Respondent, Health Canada, together with some of its subsidiaries, is responsible for administering, marketing and approving for sale certain products under the Food and Drugs Act, RSC 1985, c F-27 [Act] and its regulations, which include the Natural Health Products Regulations, SOR/2003-196 [NHP Regulations].
[4] The NHP Regulations came into force in 2004. That same year, Applied Food and Specialities Inc, the company that sold RESOLVE to TWC, filed a PLA for RESOLVE (at that time called NicCessTM Cesteminol 350TM) with the National Health Products Directorate [NHPD], a division of Health Canada under the Health Products and Food Branch [HPFB]. Relying on the authoritative Dictionary of Natural Products [DNP], NHPD initially concluded on December 2, 2004 that RESOLVE met the definition of an NHP as set out in the NHP Regulations.
[5] Applied Food and Specialties Inc sold and assigned all of its rights and ownership in RESOLVE to TWC in 2006; written notice of this exchange was provided to NHPD on April 12, 2006. TWC thereby assumed status as the applicant for the RESOLVE PLA.
[6] RESOLVE entered the Canadian market in 2006. Later in December of that year, Pfizer, a competitor of the Applicant’s, submitted allegations to Health Canada of non-compliance with marketing and advertising standards as well as health concerns with RESOLVE, which was still in the PLA process. This complaint triggered Health Canada’s further assessment of RESOLVE.
[7] Regulatory documents called Health Hazard Evaluations [HHE] were prepared by the Bureau of Clinical Trials and Health Sciences to then be used by the Health Products and Food Branch Inspectorate [HPFBI] for compliance and enforcement activities. HHEs are generally prepared to assess the level of risk from an identified problem and to inform actions to mitigate the potential health hazards created by the product, if any. As of April 1, 2011, these documents were known as Health Risk Assessments.
[8] Dr. Robin Marles, the Director of the Bureau of Clinical Trials and Health Sciences, oversaw the HHE process. As a result of safety concerns identified in the first HHE [HHE #1], the HPFBI requested in a warning letter sent on May 4, 2007 that TWC remove RESOLVE from the market. Based on the evidence of HHE #1, Health Canada concluded that RESOLVE contained a substance allegedly obtained from passionflower and that there was a likelihood of at least temporary adverse health consequences associated with its use.
[9] Five subsequent HHEs were issued between April 23, 2007 and July 17, 2007. TWC submitted information in response to the HHEs, including arguments that passionflower and balsam fir extracts were absent from RESOLVE, which NHPD alleges it considered along with the totality of TWC’s evidence. The HPFBI issued a second warning letter to TWC on June 20, 2007.
[10] On June 28, 2007, TWC and officials from Health Canada attended a meeting where Dr. Marles confirmed that RESOLVE did not contain residual passionflower. However, the HPFBI maintained that recall of the product was necessary. On July 27, 2007, Health Canada released a Public Health Advisory in regards to RESOLVE.
[11] As regards the interplay and interaction of the compliance activities of the HPFBI and the PLA-assessment activities of the NHPD, the Respondents submit that it is not the case that they are entirely separate and independent. The Respondents say that the HPFBI’s compliance and enforcement activities are necessarily informed by the product classification and HHE activities of the PLA and risk assessment bureaus of the NHPD.
III. DECISIONS UNDER REVIEW A. The First Decision [12] TWC’s PLA was rejected by the NHPD by way of the July 19, 2007 Notice of Rejection [NOR] (First Decision). As a result of a designation as a Type II Health Hazard in the HHE of July 17, 2007 [HHE #6], a third warning letter with a stop sale and recall notice was also issued by the HPFBI on this day. A Type II health risk means that the use of, or exposure to a product may cause temporary moderate adverse health consequences.
[13] The NHPD refused the Applicant’s PLA pursuant to ss 7(a) and (d) of the NHP Regulations and on the grounds that TWC had submitted insufficient evidence to support the safety and efficacy of RESOLVE when used in accordance with the recommended conditions of use.
[14] Following the issuance of the First Decision, the Applicant filed a Request for Reconsideration on July 26, 2007 pursuant to s 9(2) of the NHP Regulations and filed its supporting materials on August 30, 2007.
[15] The Applicant also filed a Notice of Application for the judicial review of the First Decision on July 27, 2007.
B. The Second Decision [16] Health Canada indicated, by way of the August 21, 2007 NOR (Second Decision), that upon further review the primary basis for the rejection of TWC’s PLA had been adjusted: RESOLVE was not an NHP, but rather a drug and therefore subject to regulation under the Food and Drug Regulations, CRC, c 870 [Food and Drug Regulations]. This reclassification of RESOLVE had an important compliance consequence in that it, in effect, prohibited the sale of RESOLVE as an unlicensed drug that had to be removed from the market, notwithstanding its safety and efficacy or lack thereof. In order to obtain market authorization, TWC would need to file a new drug submission for a notice of compliance.
C. Subsequent Decisions [17] As part of the Request for Reconsideration process and in support of its PLA, the Applicant continued to file material between August 2007 and January 30, 2012. During this period, Health Canada maintained its position that RESOLVE was not an NHP and that efficacy had not been established, but eventually withdrew its objections based upon safety.
(1) First Level Reconsideration [18] NHPD rendered its first level reconsideration decision on April 7, 2008 and addressed further evidence that had been provided by TWC on the subject of the safety and efficacy of RESOLVE. NHPD ultimately upheld its original decision that there was insufficient evidence to support that the Active Ingredient is an NHP and advised that conclusions regarding RESOLVE’s safety and efficacy could only be reached pursuant to a review of an application for market authorization under Part C of the Food and Drug Regulations. With regards to data submitted by TWC to support that the Active Ingredient is naturally occurring, NHPD was not satisfied that the results were reliable.
[19] On September 18, 2008, NHPD advised TWC that the refusal of its PLA based on safety and efficacy had been reversed on safety but upheld based on insufficient evidence to demonstrate that RESOLVE was effective for its intended use. TWC was also offered an opportunity to pursue further reconsideration. It did so on October 1, 2008.
(2) Second Level Reconsideration [20] In a letter sent on July 22, 2009, the NHPD gave Final Notice on the second Request for Reconsideration for product classification and for efficacy as per s 10(2) of the NHP Regulations. The letter upheld NHPD’s original decision and referenced a study provided by TWC, deeming it insufficient to establish RESOLVE as an NHP. As a result, the issue of RESOLVE’s efficacy as an NHP was determined to be moot. The finality of this letter was confirmed in a subsequent letter on October 19, 2009 in which NHPD indicated that should TWC wish to pursue a product license for RESOLVE, it could do so under the Food and Drug Regulations.
[21] On September 20, 2011, NHPD sent another letter to TWC stating that while it had received an August 15, 2011 Request for Reconsideration, it was upholding its decision to refuse to issue a product license and that no further consideration would be given to the PLA.
[22] On January 30, 2012, NHPD sent a letter in response to new information that had been submitted by TWC. The letter indicated that the information had been considered but confirmed that the Active Ingredient was not an NHP and there was insufficient evidence to support RESOLVE’s efficacy. NHPD stated that its decision to deny the application was final and that the letter was its ultimate correspondence relating to the reconsideration process.
IV. ISSUES [23] TWC has raised a wide range of issues which I will summarize in a general way and deal with in detail later;
1) The statutory interpretation of the NHP Regulations regarding efficacy;
2) Whether procedural fairness was afforded to TWC;
3) Did Health Canada fail to comply with relevant legislation, regulations, policies and standard operating procedures during the PLA consideration and reconsideration process;
4) Did Health Canada exhibit bad faith, bias, lack of independence, lack of impartiality, discrimination and/or conflict of interest in its decision-making;
5) Whether Health Canada was functus following the First Decision;
6) The legal relevance and effect of the reconsideration process; and
7) Whether any of the decisions satisfied the reasonableness standard.
V. STANDARD OF REVIEW [24] The Supreme Court of Canada in Dunsmuir v New Brunswick, 2008 SCC 9 [Dunsmuir] held that a standard of review analysis need not be conducted in every instance. Instead, where the standard of review applicable to a particular question before the court is settled in a satisfactory manner by past jurisprudence, the reviewing court may adopt that standard of review. Only where this search proves fruitless, or where the relevant precedents appear to be inconsistent with new developments in the common law principles of judicial review, must the reviewing court undertake a consideration of the four factors comprising the standard of review analysis: Agraira v Canada (Public Safety and Emergency Preparedness), 2013 SCC 36 at para 48 [Agraira].
[25] All of the procedural fairness issues (bad faith, bias, lack of independence and impartiality, discrimination and/or conflict of interest) will be reviewed on a standard of correctness and in accordance with the tests and jurisprudence applicable to those issues.
[26] TWC submits that the standard of correctness should apply to the interpretation of the NHP Regulations in this case. In the alternative, should reasonableness be applied, TWC says that should the ordinary tools of statutory interpretation lead to a single reasonable interpretation that differs from that adopted by the Minister, his or her interpretation will necessarily be unreasonable and no degree of deference will justify its acceptance: British Columbia (Securities Commission) v McLean, 2013 SCC 67.
[27] The Respondents submit that where scientific knowledge is a factual component of the decision, reasonableness will apply: Apotex Inc v Canada (Health), 2012 FCA 322 at para 41. The courts have accorded particular deference to Health Canada in drug submissions, given that the approval process is a complex and technical area of public administration: Hospira Healthcare Corporation v Canada (Attorney General), 2010 FC 213 at para 33.
[28] The jurisprudence is clear that reasonableness is the proper standard to be applied for both the Minister’s interpretation of the NHP Regulations and the decisions regarding TWC’s PLA: Canadian Pharmaceutical Technologies International (CPT) Inc v Canada (Attorney General), 2007 FC 708. These issues will therefore be reviewed on the reasonableness standard.
[29] When reviewing a decision on the standard of reasonableness, the analysis will be concerned with “the existence of justification, transparency and intelligibility within the decision-making process [and also with] whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.” See Dunsmuir, above, at para 47, and Khosa v Canada (Minister of Citizenship and Immigration), 2009 SCC 12 at para 59. Put another way, the Court should intervene only if the Decisions were unreasonable in the sense that they fall outside the “range of possible, acceptable outcomes which are defensible in respect of the facts and law.”
VI. STATUTORY PROVISIONS [30] The following provisions of the NHP Regulations are relevant in this proceeding:
Interpretation
Définitions
“natural health product” means a substance set out in Schedule 1 or a combination of substances in which all the medicinal ingredients are substances set out in Schedule 1, a homeopathic medicine or a traditional medicine, that is manufactured, sold or represented for use in
« produit de santé naturel » Substance mentionnée à l’annexe 1, combinaison de substances dont tous les ingrédients médicinaux sont des substances mentionnées à l’annexe 1, remède homéopathique ou remède traditionnel, qui est fabriqué, vendu ou présenté comme pouvant servir :
(a) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state or its symptoms in humans;
(a) au diagnostic, au traitement, à l’atténuation ou à la prévention d’une maladie, d’un désordre, d’un état physique anormal, ou de leurs symptômes chez l’être humain;
(b) restoring or correcting organic functions in humans; Or
(b) à la restauration ou à la correction des fonctions organiques chez l’être humain;
(c) modifying organic functions in humans, such as modifying those functions in a manner that maintains or promotes health. However, a natural health product does not include a substance set out in Schedule 2, any combination of substances that includes a substance set out in Schedule 2 or a homeopathic medicine or a traditional medicine that is or includes a substance set out in Schedule 2.
(c) à la modification des fonctions organiques chez l’être humain telle que la modification de ces fonctions de manière à maintenir ou promouvoir la santé. La présente définition exclut les substances mentionnées à l’annexe 2, toute combinaison de substances qui contient une substance mentionnée à l’annexe 2 et tout remède homéopathique ou remède traditionnel qui est une substance mentionnée à l’annexe 2 ou qui contient l’une de ces substances.
Licence Application
Demande
5. An application for a product licence shall be submitted to the Minister and shall contain the following information and documents:
5. La demande de licence de mise en marché est présentée au ministre et comporte les renseignements et documents suivants :
(a) the name, address and telephone number, and if applicable, the facsimile number and electronic mail address of the applicant;
(a) le nom, l’adresse, le numéro de téléphone et, le cas échéant, le numéro de télécopieur et l’adresse électronique du demandeur.
(b) if the address submitted under paragraph (a) is not a Canadian address, the name, address and telephone number, and if applicable, the facsimile number and electronic mail address of the applicant’s representative in Canada to whom notices may be sent;
(b) si l’adresse visée à l’alinéa (a) est un lieu situe à l’extérieur du Canada, le nom, l’adresse, le numéro de téléphone et, le case échéant, le numéro de télécopieur et l’adresse électronique du représentant du demandeur au Canada à qui les avis peuvent être expédies;
(c) for each medicinal ingredient of the natural health product,
(c) pour chacun des ingrédients médicinaux contenus dans le produit :
(i) its proper name and its common name,
(i) son nom propre et son nom usuel,
(ii) its quantity per dosage unit,
(ii) sa quantité par unité posologique,
(iii) its potency, if a representation relating to its potency is to be shown on any label of the natural health product,
(iii) son activité si l’une des étiquettes du produit comporte une déclaration à l’égard de celle-ci,
(iv) a description of its source material, and
(iv) une description de sa matière d’origine,
(v) a statement indicating whether it is synthetically manufactured;
(v) une mention indiquant s’il s’agit d’un ingrédient fabriqué synthétiquement;
(d) a qualitative list of the non-medicinal ingredients that are proposed for the natural health product and for each ingredient listed, a statement that indicates the purpose of the ingredient;
(d) une liste qualitative des ingrédients non médicinaux qu’on se propose d’incorporer au produit de santé naturel ainsi que, pour chacun de ces ingrédients, une mention indiquant à quelle fins l’ingrédient serait incorpore au produit;
(e) each brand name under which the natural health product is proposed to be sold;
(e) chacune des marques nominatives sous lesquelles le produit est destiné à être vendu;
(f) the recommended conditions of use for the natural health product;
(f) les conditions d’utilisation recommandées du produit;
(g) information that supports the safety and efficacy of the natural health product when it is used in accordance with the recommended conditions of use;
(g) les renseignements montrant l’innocuité et l’efficacité du produit lorsqu’il est utilisé selon les conditions d’utilisation recommandées;
(h) the text of each label that is proposed to be used in conjunction with the natural health product;
(h) le texte à utiliser sur chacune des étiquettes du produit;
(i) a copy of the specifications to which the natural health product will comply; and
(i) un exemplaire des spécifications auxquelles le produit devra se conformer;
(j) one of the following attestations, namely,
(j) l’une des attestations suivantes :
(i) if the natural health product is imported, an attestation by the applicant that the natural health product will be manufactured, packaged, labelled imported, distributed and stored in accordance with the requirements set out in Part 3 or in accordance with requirements that are equivalent to those set out in Part 3, or
(i) dans le cas d’un produit de santé naturel importé, une attestation du demandeur établissant que le produit de santé naturel sera fabriqué, emballé, étiqueté, importé, distribué et entreposé conformément aux exigences prévues à la partie 3 ou à des exigences équivalentes,
(ii) if the natural health product is not imported, an attestation by the applicant that the natural health product will be manufactured, packaged, labelled, distributed and stored in accordance with requirements set out in Part 3.
(ii) dans le cas d’un produit de santé naturel qui n’est pas importé, une attestation du demandeur établissant que le produit de santé naturel sera fabriqué, emballé, étiqueté, distribué et entreposé conformément aux exigences prévue à la partie 3.
…
…
Issuance and Amendment
Délivrance et Modification
7. The Minister shall issue or amend a product licence if
7. Le ministre délivre ou modifie la licence de mise en marché si les conditions suivantes sont réunies :
(a) the applicant submits an application to the Minister that is in accordance with section 5 or subsection 11(2), as the case may be;
(a) le demandeur présente au ministre une demande conforme à l’article 5 ou au paragraphe 11(2), selon le cas;
(b) the applicant submits to the Minister all additional information or samples requested under section 15;
(b) le demandeur fournit au ministre les renseignements complémentaires ou les échantillons demandes en vertu de l’article 15;
(c) the applicant does not make a false or misleading statement in the application; and
(c) le demandeur ne fait pas de déclaration fausse ou trompeuse dans sa demande;
(d) the issuance or amendment of the licence, as the case may be, is not likely to result in injury to the health of a purchaser or consumer.
(d) la délivrance ou la modification de la licence ne risque pas de cause un préjudice à la santé de l’acheteur ou du consommateur.
VII. ARGUMENTS A. Applicant (1) Procedural Fairness [31] TWC submits that this licence application has been plagued by procedural unfairness since January 2007 and that the RESOLVE PLA review was not conducted in a fair and impartial manner. TWC was denied the basic elements of procedural fairness in relation to both the First Decision and the Second Decision, including notice and the opportunity to be heard. NHPD deviated from its standard procedure and TWC’s legitimate expectations. NHPD’s decisions demonstrate bias, pre-judgment, a closed mind and bad faith.
[32] TWC references a series of procedurally unfair actions taken and omissions made by the NHPD in relation to the RESOLVE PLA that render the administrative decisions in question void ab initio:
− The issuing of the May 4, 2007 warning letter even after questioning whether it made sense to do so and without giving TWC any prior notice or opportunity to respond;
− Creating a “moving target” by way of new allegations and reasons to take compliance action or to reject the PLA every time TWC responded to allegations;
− The admission of Mr. Gustafson, HPFBI inspector, on June 28, 2007 that TWC was not going to get a license no matter what information it provided;
− Dr. Marles’ unauthorized intrusion into and effective management of the PLA process notwithstanding his conflict of interest as the author of the HHEs and resulting severe compliance action;
− Setting aside the initial Safety and Efficacy Assessment Report [SEAR] of June 19, 2007 which supported safety and should have been the end of any safety issues;
− Issuing both rejections (First Decision and Second Decision) without prior information request notices and therefore not caring what further evidence might have been available as to safety, efficacy or classification;
− Issuing HHE #6 based on three new and unfounded safety allegations without giving TWC any prior notice or opportunity to respond;
− Disregarding a toxicology report when it confirmed safety, without any toxicology evidence to the contrary, but then mistakenly relying on it to allege a new safety issue;
− Using the Adverse Reaction Reports as one of the reasons to justify HHE #6 and the rejection decision when it was highly tenuous and based on an erroneous assumption in regards to passionflower, without giving TWC proper opportunity to respond;
− Misinforming the Associate Deputy Minister, other senior officials of Health Canada, HPFBI and TWC regarding the status of the PLA and specifically, failing to advise that the initial SEAR had supported safety;
− Basing the First Decision on HHE #6 rather than a completed SEAR in accordance with standard procedure and then issuing the NOR before the SEAR was even complete;
− Overzealously pursuing the classification issue even after the First Decision and issuing the Second Decision without giving TWC notice that classification was now an issue;
− Issuing the Second Decision even though the Active Ingredient was still listed as a natural substance by NHPD and by the DNP reference as of that date;
− Taking the unprecedented step of lobbying DNP to remove the Active Ingredient from its list of natural substances;
− Issuing a Public Advisory when no “imminent” risk of “serious or irreversible” injury existed and after TWC had already agreed to recall the product.
(2) Classification [33] In addition to considerations of procedural fairness, TWC submits that the Second Decision should be quashed on grounds including bootstrapping, functus officio, exhaustion of discretion, estoppel and lack of delegated authority.
[34] TWC argues that the Second Decision was an attempt to bolster the previous license denial in anticipation of the damages that TWC was likely to claim.
[35] TWC stresses that the Second Decision’s conclusion in regards to classification did not result from any scientific evidence or testing. The Second Decision was issued by NHPD entirely as a result of an alleged DNP error without contacting DNP or TWC. TWC submits that it filled the evidence gap that NHPD alleged existed by providing overwhelming evidence, including scientific testing and reports from two different laboratories, as well as a peer-reviewed published article. NHPD, however, continued to criticize TWC’s evidence, filed and retained its own reports and repeatedly refused to reverse the classification NOR of the Second Decision throughout the reconsideration process.
[36] The PLA was concluded subject only to TWC’s right to request reconsideration. Therefore, TWC says that the Minister was functus with respect to the PLA as the NHP Regulations do not provide for a unilateral right of the Minister to reconsider a decision. The Minister was without jurisdiction to issue a further rejection of the PLA based on classification (as was done in the Second Decision) or on any other grounds: Canadian Association of Film Distributors and Exporters v Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc, 2014 FCA 235 at paras 58, 68-75; CHUM Ltd v Canada (Attorney General), 2005 FCA 142; Baudisch v Civil Aviation Tribunal, [1997] 129 FTR 241.
[37] In the alternative, even if functus does not apply, it should be noted that as of August 21, 2007, DNP still listed the Active Ingredient as a natural substance. DNP was adopted by NHPD as the definitive standard for NHP classification and it is therefore submitted that the Minister was bound by the DNP classification as it existed on July 19, 2007 and August 21, 2007 and at the time of the prior NHPD classification decisions. The Minister was estopped or precluded from reversing these decisions or issuing the Second Decision. Alternatively, the abandonment of the DNP standard was discriminatory and a gross deviation from accepted procedure and the legitimate expectations of TWC.
(3) Safety [38] RESOLVE had been designated an NHP on three occasions prior to the denial of its PLA in the First Decision. Even though the classification of the Active Ingredient had been questioned prior to July 19, 2007, the First Decision was issued solely on the basis of safety and efficacy.
[39] While it is clear, and Health Canada has admitted, that safety concerns should not have been relied on in denial of the PLA in the first place, TWC submits that it had no opportunity to address the alleged safety concerns of the First Decision until after it was released.
[40] Following the release of the First Decision, TWC says it provided specific responses to each of the three safety allegations of Health Canada, and the decision was subsequently reversed.
(4) Efficacy [41] TWC says that the standard demanded by the NHPD with respect to efficacy exceeded any reasonable interpretation of the NHP Regulations, which do not require any substantive proof for efficacy. The practices of Health Canada cannot create additional or more onerous standards or tests.
[42] Section 7 of the NHP Regulations, which provides that the Minister shall issue a licence if the requirements of subsections (a) through (d) are met, sets out a substantive test for safety. Therefore, s 5(g) which simply requires “information which supports safety and efficacy” should only be interpreted as administrative in nature as it only addresses materials that should be included in the PLA. This interpretation is consistent with the authorities on statutory interpretation, including the “presumption of coherence:” Bell ExpressVu Ltd Partnership v Rex, 2002 SCC 42 at paras 26-27, 30; R v Ulybel Enterprises Ltd, 2001 SCC 56 at paras 28-30; Gordon v Taylor, 2014 ABQB 11 at paras 9-11. Furthermore, Health Canada’s “Decision Making Framework” recognizes that sometimes no evidence of “benefit” is necessary for safe products, even prescription drugs.
[43] Even if s 5(g) can be interpreted as a threshold substantive test, it must be less onerous than the standard of proof required for safety under s 7(d): the information required for efficacy does not have to prove that the product “likely” is efficacious, and no minimum standard of scientific proof is required.
[44] TWC’s PLA simply claimed that the product “may” help with smoking cessation (not that it “will”). Therefore, any substantive test for efficacy must be very modest and information that falls short of establishing a likelihood that a product may help with smoking cessation should be considered sufficient. Furthermore, even if the information provided does not support the claims made for the product, the PLA is not automatically denied. Steps such as market studies and/or the amending of product labels can be applied as conditions for granting the license.
[45] TWC submits that on the reasonable interpretation of the NHP Regulations and of the evidence, Health Canada had no basis to reject the PLA on efficacy-related grounds. Even if the NHP Regulations are interpreted as requiring a substantive test for efficacy, TWC was only required to adduce information that supported the modest claim in the PLA that RESOLVE “may” help with smoking cessation.
[46] The PLA complied with s 5(g) by including information that supports efficacy, including a phase 1 human clinical study along with university-conducted in vitro and animal studies, a statistical analysis of phase II human clinical study, U.S. patent information and various papers, articles and testimonials. Health Canada acknowledged this by accepting the PLA and deeming it complete.
[47] TWC further submits that the information provided by TWC in both the PLA and the reconsideration processes was more than sufficient to prove even the likelihood that RESOLVE may help with smoking cessation. Therefore, it certainly satisfied a standard less than that. NHPD nonetheless critiqued it based on technical scientific standards, imposing a standard that went beyond the simple “information to support” requirement under the NHP Regulations towards one of “conclusive proof” of efficacy.
(5) The Reconsideration Process Generally [48] TWC says that the reconsideration process in this case did not constitute an adequate alternative remedy and failed to address fundamental deficiencies of the First and Second Decisions, such as whether procedural fairness had been afforded and whether the Second Decision had issued after the Minister was functus.
[49] TWC says that the Subsequent Decisions of the reconsideration process are legally irrelevant and need not be considered by the Court. In the alternative, it is submitted that if the reconsideration process is relevant, then it was not fair or impartial, suffering from the same procedural unfairness as the First and Second Decisions.
[50] Because the review of the PLA was not done by an independent tribunal outside of Health Canada, as requested repeatedly by TWC, there could be no reasonable expectation that the reconsideration would occur fairly or cure the defects present in this case. Whereas DNP was prepared to accept evidence from TWC’s experts as sufficient proof that the Active Ingredient was naturally occurring, NHPD held TWC to an unprecedented standard of scientific certainty. No matter what evidence was offered by TWC, it was not going to succeed in the reconsideration.
B. Respondents (1) Procedural Fairness [51] The Respondents submit that TWC was afforded procedural fairness beyond what is required by law. It was not necessary for Health Canada to provide notice or an opportunity to be heard prior to the issuing of the public advisory on July 27, 2007, but it did so. Furthermore, TWC was given the chance to submit additional documents within ten days of the June 28, 2007 meeting. Determinations of procedural fairness must be balanced with the reality that Health Canada was addressing what could only have been assessed as a serious and immediate safety risk based on the information available to the NHPD at the time. Following the Second Decision regarding the classification of RESOLVE, TWC took advantage of numerous opportunities to continually submit further evidence to show that its Active Ingredient is an NHP. This evidence was accepted and considered until October 2011.
[52] The Respondents say that because TWC was regularly engaged by Health Canada about its product throughout the regulatory decision-making process, only a minimal amount of procedural fairness is owed with respect to the classification decision in the Second Decision. Furthermore, when it comes to matters of public health and safety, procedural guarantees will be adjusted according to the degree of risk and urgency, which the decision-maker will enjoy considerable latitude in assessing: Miel Labonté Inc v Canada (Attorney General), 2006 FC 195.
[53] The NHPD was in possession of information from a reliable source relating to safety risks. It was reasonable for the NHPD to believe this information and take corresponding enforcement measures, including public advisories and stop sale and recall orders.
(a) Reconsideration [54] Health Canada accepted new information from TWC, including seven volumes of material plus additional supporting correspondence in the reconsideration process. NHPD not only followed all of the prescribed rules under ss 7 through 10 of the NHP Regulations but went beyond the normal scope of reconsideration in granting TWC a second reconsideration. When the evidence adduced by TWC was determined to be inadequate, the First Decision was upheld. TWC submitted an additional request for reconsideration. Notwithstanding the stated general practice of Health Canada to terminate reconsideration processes when a judicial review has been filed (as it was on July 27, 2007), to give TWC every opportunity to address outstanding issues, NHPD continued the reconsideration process.
(b) Bias [55] Dr. Marles was at all material times the senior science advisor to the NHPD. TWC accuses NHPD staff, including Dr. Marles, of bias, pre-judgment, having a closed mind and bad faith. TWC has not submitted any logical explanation as to why he might be antagonistic towards TWC or RESOLVE and there is no evidence that Dr. Marles had any interest in a competing product or was at any point entrenched in any position regarding RESOLVE.
[56] The Respondents say that the classification of the Active Ingredient as a drug rather than an NHP was not, as alleged by TWC, an attempt to bootstrap the First Decision. It was not unprecedented that the DNP was contacted and the DNP reached its own conclusion that the Active Ingredient is not a natural product. Contrary to what TWC suggests, it has not re-listed the Active Ingredient as a natural substance.
[57] The Respondents submit that its decisions to refuse the PLA and the subsequent reconsideration applications were reasonable and made through reliance upon valid scientific evidence with respect to the classification, safety and efficacy of the Active Ingredient. TWC was given an exceptional opportunity to provide fresh evidence during the reconsideration process, which the NHPD considered even after the commencement of the judicial review application, and has failed to demonstrate that its product is “natural.”
(2) Classification [58] NHPD’s internal and external experts concluded that there is no evidence in the peer-reviewed scientific literature that the Active Ingredient occurs in nature. Where a product contains an active ingredient that does not occur in nature, it does not fall within the scope of the definition of an NHP. When this occurs, the NHPD is statutorily prohibited from issuing a license under the NHP Regulations. While a 2005 article may have alleged the presence of the Active Ingredient in mangoes [Mango article], the DNP, which the NHPD considers to be an authoritative database of natural health products, was never updated to include the Active Ingredient subsequent to the article. The Respondents submit that it was entirely reasonable for the NHPD to issue the Second Decision to reflect the operation of the NHP Regulations because the Active Ingredient is a synthetic substance that does not occur naturally.
(3) Safety and Efficacy [59] The Respondents say that the NHPD, as a federal health regulator, reasonably took compliance and enforcement measures in accordance with the information it received concerning safety and efficacy. NHPD’s information relating to a safety risk was from a reliable source and included information from a peer-reviewed article as well as the HHEs themselves. It was therefore reasonable and necessary that the NHPD took enforcement measures like public advisories and stop sale and recall orders in order to limit consumer risk.
[60] The Respondents disagree with TWC’s submission that a substantive requirement of efficacy is not mandatory under the NHP Regulations. Subsection 7(a) incorporates the requirements of s 5, including paragraph (g), which necessitates “information which supports safety and efficacy.” The Respondents assert that this is not merely an administrative requirement but also a substantive one. A substantive review of the RESOLVE PLA was conducted under the regulations for the various requirements prescribed by s 7 which includes information that supports efficacy. The PLA was analyzed in light of efficacy concerns identified in the HHE and it was determined that it did not meet the threshold for granting a licence under s 8.
VIII. ANALYSIS A. Introduction [61] In addition to general charges of acting unreasonably, TWC accuses Health Canada in this application of egregious misconduct including bad faith, lack of procedural fairness, bias, appearance of bias, acting without authority, bootstrapping, shoring up of evidence, and acting with a closed mind contrary to standard policy and outside the legitimacy of delegated authority.
[62] The history of this litigation is long and bitter and the record is voluminous. The dispute is rendered particularly convoluted by the interactions between the HPFBI, responsible for compliance and enforcement, and the NHPD (now the Natural and Non-Prescription Health Products Directorate – NNHPD), both of which were called into play following TWC’s assumption of the PLA that Applied Food and Specialties Inc had commenced in October 2004, and after Pfizer’s submission of a trade complaint about the sale and marketing of TWC’s RESOLVE product in December 2006. From that point on, TWC was obliged to deal with Health Canada from both a licencing and a compliance perspective, and it is in the interplay between these two distinct, but inevitably related, processes that the dispute is pitched.
[63] In order to provide some sense of direction through the interactive maze that developed between the initial PLA in 2004 and NHPD’s final negative reconsideration decision of January 30, 2012, it helps to bear in mind that NHPD made two (2) major decisions with regard to TWC’s PLA.
[64] The First Decision occurred on July 19, 2007 when NHPD rejected TWC’s PLA outright based