In accordance with the Tribunal’s First Procedural Order and its Order of May 14, 2013, Respondent United States of America respectfully submits this Rejoinder on Merits and Reply on Objections to Jurisdiction to the claims of Apotex Inc. and Apotex Holdings Inc., on its own behalf and on behalf of its U.S. enterprise, Apotex Corp. (collectively, “Apotex”). 

The United States also respectfully submits a supplemental witness statement of Dr. Carmelo Rosa and an expert report of William W. Vodra, which respond to new arguments and allegations contained in Apotex’s May 24, 2013 Reply; the witness statements and expert report accompanying the Reply; and the July 22, 2013 Supplement to the Reply. 

PRELIMINARY STATEMENT 

1. The U.S. Counter-Memorial established that the Tribunal lacks jurisdiction to hear Apotex’s claims, which in any event fail on the merits. The Tribunal should reject Apotex’s improper attempt to manufacture an “investment” dispute and foist onto the U.S. taxpayer the costs of bringing Apotex’s Canadian manufacturing facilities up to the minimum regulatory standards required for exporting its drugs to the United States for sale by others. 

2. Three notable developments have occurred since the United States filed its Counter-Memorial, all of which confirm the U.S. arguments. First, on June 14, 2013, the tribunal in two claims captioned Apotex Inc. v. United States issued an award on jurisdiction and admissibility, holding that Apotex Inc. “does not qualify as an ‘investor’, who has made an ‘investment’ in the U.S., for the purposes of NAFTA Articles 1116 and 1139.”1 

3. The Apotex I-II tribunal determined, in particular, that an abbreviated new drug application (ANDA), whether tentatively or finally approved, is not “property” in the United States for purposes of Article 1139(g). To the contrary, for companies such as Apotex Inc., whose manufacturing facilities are outside the United States, an ANDA is “simply an application for revocable permission to (in this case) export a product for sale (by others) in the United States.”2 

4. The tribunal further determined that ANDAs are not “interests arising from the commitment of capital or other resources” in the United States for purposes of Article 1139(h). Apotex’s applications, it determined, “amount to no more than the ordinary conduct of a business for the export and sale of goods,” and thus are excluded as “investments.”3 

5. The tribunal not only rejected Apotex Inc.’s claim to be an “investor” with “investments” in the United States for purposes of NAFTA Chapter Eleven, but also concluded that the United States “ought never have been embroiled in this process.”4 The tribunal unanimously dismissed Apotex’s claims for lack of jurisdiction and ordered Apotex to pay all of the United States’ legal and arbitration costs. 

6. The tribunal’s decision is res judicata. It thus bars Apotex from requiring the United States to relitigate, for purposes of NAFTA Chapter Eleven, Apotex Inc.’s claim to be an “investor” with “investments” in the United States based on ANDAs.