Background

The dispute was an ICSID claim under NAFTA involving the largest Canadian-owned pharmaceutical company in Canada. As a manufacturer of drugs for export to the US, the drugs are subject to the US Federal Food, Drug and Cosmetic Act. In August 2009, the FDA issued an Import Alert for two manufacturing facilities located in Canada which produced solid dose drug products for the US market. The Import Alert signaled that drugs from these facilities were adulterated and could be detained at the US border without physical examination. The FDA lifted the Import Alert for these facilities in June/July 2011.

Our Role

Secretariat professionals were engaged to quantify damages arising from the Import Alert. To assess lost profits, we examined historical profits of all solid dose drug products produced from the affected facilities sold in the US prior to the Import Alert, and the ramp-up of profits for the products that were re-launched into the US after the lift of the Import Alert.

Outcome

In our expert report submitted to the Tribunal in July 2012, we assisted the client in quantifying its financial losses to be up to US$ 1.5 billion. Our financial analysis considered approximately 90 drug products for the US market.