Pursuant to Article 19 of the UNCITRAL Arbitration Rules (1976) and in accordance with the Tribunal’s Procedural Order No. 1, dated December 16, 2010, the United States of America respectfully submits this Statement of Defense.

PRELIMINARY STATEMENT

1. This arbitration includes two claims by Apotex Inc. (“Apotex”) against the United States of America under NAFTA Chapter Eleven, one brought in a Notice of Arbitration (“NOA”) dated December 10, 2008 (the “sertraline claim”) and received by the Respondent on December 11, 2008, and the other in a NOA dated June 4, 2009 (the “pravastatin claim”) and received by the Respondent on June 5, 2009. Both claims arise from Apotex’s efforts to bring new generic drugs to market in a commercially advantageous manner in the United States through its export operations in Canada, and its disappointment with the outcome of litigation brought to further

this marketing strategy. In both claims, Apotex seeks damages allegedly resulting from its inability to trigger other companies’ 180-day market exclusivity period. These other generic manufacturers were eligible for this 180-day exclusivity period under the governing statute because, in their applications to market these drugs, they had filed the first challenges (known as “paragraph IV certifications”) to certain patents listed for those drugs. Specifically, Apotex alleges that federal courts in New York and the District of Columbia, including the Supreme Court of the United States, as well as the U.S. Food and Drug Administration (“FDA”), made legal errors and that such legal errors give rise to violations of NAFTA Chapter Eleven obligations.

2. Apotex’s claims amount to nothing more than an attempt to seek review by this Tribunal of the decisions of U.S. courts and agencies made under U.S. law. Apotex’s plan to export drugs from Canada for sale in the United States is not an “investment” under NAFTA Chapter Eleven, and in any event, its disappointment with the outcome of litigation related to its sertraline and pravastatin products does not give rise to violations of NAFTA Chapter Eleven.

3. In Section I, the United States sets forth the relevant facts and U.S. legal proceedings related to this case. In Section II, the United States delineates the points at issue in this case, including why this Tribunal has no jurisdiction to hear Apotex’s claims and why, in any event, Apotex’s claims are wholly without merit. In Section III, the United States requests that this Tribunal dismiss Apotex’s claims with prejudice and award all costs, both for this arbitration and for legal representation and assistance, to the United States.