Health Minister Rona Ambrose fired off an urgent email to her close advisers.

She was readying herself for question period last September. Her critics, denouncing Health Canada as toothless, had been demanding an explanation for how India-made drug ingredients were allowed into Canada despite being barred from the U.S. over safety concerns.

Ambrose, who oversees drug safety in Canada, was now contemplating dramatic action against the country’s biggest drug company, Apotex.

“I want to know if these drugs that are considered harmful by the FDA are still on the Canadian market,” Ambrose wrote in the Sept. 16 email. “If they are, I want to say today that I will revoke the license of this company if they do not remove this/these products asap.”

The health minister’s email joined astream of internal messages that, over the ensuing days and weeks, reached the inboxes of top Health Canada and U.S. health officials, as well as the Prime Minister’s Office.

By the end of the month, the Conservative government would announce an unprecedented import ban against two Apotex factories in Bangalore, India.

Toronto-based Apotex has since taken the government to court, saying it’s a scapegoat for a regulator embarrassed by an ongoing Toronto Star investigation. The company claims the ban — now eight months long — is illegal.

This week, Health Canada plans to reinspect the two Indian facilities.

Ambrose’s email is just one of hundreds of new documents filed as part of the increasingly acrimonious legal battle, providing a rare, behind-the scenes glimpse into the operations of a massive pharmaceutical company and the regulator charged with policing it.

The voluminous court file also includes handwritten notes from a pivotal conference call involving top Health Canada officials and sworn affidavits from Health Canada officials and top company executives. As far as the Star knows, there have not yet been cross-examinations on the affidavits.

Apotex told the Star in a statement that Health Canada’s own previous inspections found the India facilities compliant, and that its drugs, which are “fully tested” in the company’s Canadian labs, are safe and effective. The company said recent inspections by Australian and European regulators turned up no data integrity issues.

“Nothing whatsoever has been disclosed (by Health Canada) that would justify the ban, and we believe that nothing exists,” the statement said.

The lawsuit documents highlight how much is at stake for both sides.

For Apotex, significant revenues for a company that views itself as a Canadian success story responsible for 20 per cent of the prescriptions filled in this country.

And for Health Canada, the opportunity to shed its reputation as a weak regulator by taking tough action in an industry that critics say operates with too little oversight.

U.S. acted first

The bitter and costly dispute took root a year ago.

Health Canada said it first learned of the serious problems at Apotex’s Indian operations in early April 2014, when the U.S. announced it was barring imports from one of the company’s India plants after FDA inspectors found numerous problems.

Apotex Pharmachem India Pvt. Ltd. is a sprawling facility, covering more than two hectares of an industrial drag in Bangalore. The plant runs all day, every day, manufacturing active pharmaceutical ingredients (API) that are then shipped to other Apotex facilities for the production of actual tablets and pills.

The U.S. agents said they found Apotex staff discarding unfavourable lab results and retesting suspect samples until they yielded the desirable outcome. A quality control manager told inspectors that, for months, Apotex Pharmachem senior management knew about the practice of retesting without investigating the suspect product sample, according to the FDA, who said the company’s management “failed to prevent” the practice.

Apotex has told the Star that, in some cases where undesirable results were discarded, “retesting was required and appropriate because the unfavourable result was caused by analytical error.” All drugs distributed to market were safe, the company said.

On April 29, Health Canada sent a letter to the company: Based on the FDA findings, Apotex was expected “to cease the sale of drugs” containing ingredients made at the Bangalore plant.

The company refused.

The next day, in a defiant five-page letter, Apotex’s lawyer said the company’s plant was up to manufacturing standards and offered to pay for Health Canada to come inspect the facility. The letter also came with a warning: by directing Apotex to cease sales, the lawyer said, Health Canada damaged the company’s “property, reputation and economic interests.” If Health Canada pursued regulatory action, or even made its directive known to the public, “we reserve our clients’ rights to hold Health Canada responsible,” the lawyer wrote.

The regulator stayed silent.

Meanwhile, U.S. inspectors began looking into a neighbouring facility in Bangalore — Apotex Research Private Ltd, which makes finished drug products sold around the world.

The inspectors said they found Apotex staff were not reporting unfavourable test results. The FDA said inspectors warned management that staff was providing “false and misleading information” and altering samples.

The U.S. findings also exposed a glaring weakness in Health Canada’s own drug facility inspections: Canadian and British inspectors had visited the same Indian facility four months before the FDA visit and found it was up to snuff.

“Health Canada does not have the same level of specialized expertise and resources as the FDA to analyze data generated by manufacturers in a way that reveals systemic problems,” Dr. Supriya Sharma, Health Canada’s senior medical adviser, acknowledged in her affidavit filed as part of the ongoing lawsuit.

Relying on the FDA’s work, Sharma continued, allows “Health Canada to gather a more complete assessment than would otherwise be possible, even with on-site inspections.”

It’s a significant admission from an agency that often touts itself as among the most robust health regulators in the world, said Alan Cassels, a drug policy researcher at the University of Victoria.

“Health Canada had been caught with their pants down,” said Cassels. “(Sharma’s) admission is a rare spark of truthiness on Health Canada’s competence.”

Apotex, however, says the FDA has for years unfairly targeted the firm.

In an affidavit, company vice-president Ed Carey suggested that a particular FDA inspector, Peter Baker, “had a working conclusion in mind” before inspections and “he was looking for facts to support it.”

Baker told the Star he could not comment on those allegations.

The company has hired at least five consultants who concluded “there is no evidence of systemic or malicious data integrity issues” at either Indian facility.

And in 2012, after an unrelated U.S. ban of some Apotex products made at its Toronto facilities, the company complained to an international trade tribunal, saying the U.S. government unfairly punished the Canadian firm and cost Apotex hundreds of millions of dollars and “decimated” its U.S. sales.

At the tribunal, the FDA, which alleged the firm had distributed drugs made from contaminated batches, said Apotex failed to grasp the seriousness of the situation.

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“The company told FDA it intended to continue to distribute products into the U.S. market relying on its current quality system — the system that the company and FDA agreed was deficient and needed remediation,” testified William Vodra, an FDA expert witness and former top lawyer for the U.S. regulator.

“This is something I’ve seen before. It is not unusual. Companies frequently do not hear FDA clearly until FDA basically hits them alongside the head with a two-by-four.”

In August 2014, the trade tribunal rejected Apotex’s claim against the FDA.

“All companies occasionally have violations,” said Amir Attaran, a University of Ottawa law professor who researches drug policy. “The good ones recognize that quickly and fix the problems and move on. The dangerous ones fight (regulators’) findings … that there are problems — and fight them repeatedly.”

Ban surprised company

The Star published an investigation on Sept. 11 revealing details of the FDA inspections in India. In the following days and weeks on Parliament Hill, criticism of Ambrose and Health Canada mounted.

Internally, the regulator was weighing the results of its own recent inspection of Apotex’s Indian ingredient-making facility. Canadian inspectors, paired with agents from Australia, didn’t find the serious data integrity problems previously flagged by U.S. officials at the same plant. Inside the government, officials sought to stall releasing the inspection results to Apotex as the report made its way up the chain of command. But, on Sept. 25, an inspector sent the report, stamped “draft,” to the company.

The report said the Bangalore plant was compliant. The company would continue to import its drug ingredients from India, never mind what the FDA found.

Then, on Sept. 29, top regulatory officials in Ottawa got on the phone with their counterparts from the FDA.

What they heard was alarming. Apotex’s “ignoring of negative test results was more extensive than I had realized,” senior medical adviser Sharma described in her affidavit.

The FDA “gets the impression that Apotex doesn’t understand how significant the issues are” and that it would take “months to years to fully assess and correct,” according to internal Health Canada notes from the call.

The next day, on the morning of Sept. 30, Ambrose’s senior assistant emailed the Prime Minister’s Office, advising it that something big was coming.

Health Canada issued a “Request for Target/Port Lookout” alert to the border service. The ban was in place.

The government deliberately kept Apotex in the dark, the rationale being that a forewarned importer may attempt to flood the market before the ban is in place.

That evening, the ban was publicly announced. The trust between the regulator and Apotex, Ambrose said, had been “broken.” The government’s press release said “new information” from the FDA led to the ban.

At 11 that night, Apotex chief executive Jeremy Desai sent an urgent email to Ambrose and Robin Chiponski, director general of Health Canada’s drug inspectorate division.

Desai said that “we are at a complete loss to understand” what new FDA information played a role and why this was not first shared with the company.

“You appear to have singled out Apotex, presumably as a result of recent stories in the press,” he said, adding that the ban “will have devastating consequences for our company.”

In the days and weeks that followed, Desai sent several correspondences to Chiponski, his tone at times indignant as he demanded details of what information led to the ban.

In his letters, Desai told Chiponski the company would agree to quality control measures that should satisfy Health Canada that the facilities are up code. “Damages,” he added, “are rapidly compounding by each passing day.”

In early February, Apotex’s vice-chair John Kay wrote a letter to the Star, calling its articles about the company grossly unfair.

“Apotex is a rare Canadian success story,” he wrote.

As Canada’s largest drug manufacturer, it employs about 6,000 people and has saved the health care system billions of dollars through its “high-quality affordable” generics, he continued.

“We thus urge the Star to celebrate a great Canadian success story, instead of attacking Apotex and the Minister of Health with very unfair innuendo and sensationalism.”

A hearing into the matter is scheduled for the fall.