COURT FILES NO.: CV-11-442584-CP

CV-13-491534-CP

DATE: 20210416

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

GERALDINE CASSERES, Deceased, by her Estate Representative joann casseres, JOANN CASSERES, and russel Chauvin

Plaintiffs

• and -

TAKEDA PHARMACEUTICAL COMPANY LIMITED, TAKEDA PHARMACEUTICALS NORTH AMERICA, INC., TAKEDA PHARMACEUTICALS INTERNATIONAL, INC., TAKEDA GLOBAL RESEARCH & DEVELOPMENT CENTER, INC., TAKEDA SAN DIEGO, INC., ELI LILLY CANADA INC. and TAKEDA CANADA, INC.

Defendants

-and-

B E T W E E N:

RANDOLPH CARRIER, PETER NELSON and SHARON NELSON

Plaintiffs

-and-

APOTEX INC. and SANDOZ CANADA INCORPORATED

Defendants

Proceedings under the Class Proceedings Act, 1992

BEFORE: Justice Edward P. Belobaba

COUNSEL: Joel Rochon, Won J. Kim, Megan B. McPhee and Aris Gyamfi for the Plaintiffs Sylvie Rodrigue and Nicole Mantini for the Takeda and Lilly Defendants Katherine L. Kay and Samaneh Hosseini for Apotex Inc Peter J. Pliszka and Zohaib I. Maladwala for Sandoz Canada

HEARD: January 28, 2021 via Zoom video with follow-up written submission dated April 7, 2021

Class Action Settlement Approval

[1] After almost ten years of litigation, these two pharmaceutical class actions have settled for $25 million. The plaintiffs ask for judicial approval of the settlement amount, class counsel’s legal fees and the payment of an honorarium to the representative plaintiffs.

[2] The actions relate to three prescription drugs marketed in Canada for the treatment of diabetes: ACTOS®, APO-Pioglitazone and Sandoz-Pioglitazone (collectively referred to as “PIO”). The plaintiffs alleged that PIO can cause bladder cancer and that the defendant drug companies failed to warn about this risk of harm adequately or at all. The defendants deny the plaintiffs’ allegations and do not admit liability. However, with the help of a mediator, both sides agreed to the $25 million settlement.

[3] At the settlement approval hearing on January 28, 2021, I voiced a number of concerns about the $25 million settlement amount. First, I was not told about the fact that in the U.S. in 2015 about 10,000 of these PIO cases had settled for $2.4 billion. Second, if so, and using a per capita comparison, this would mean that a Canadian settlement in the range of $240 million would be more appropriate — how then could a fraction of this amount, the proposed $25 million, be fair and reasonable?

[4] I adjourned the settlement approval hearing so that class counsel could file additional information that would address these concerns. To their credit, class counsel did so. They submitted a supplementary affidavit explaining in detail why the American comparison was inapt and why the $25 million settlement amount was indeed fair and reasonable.

[5] The gist of the additional information was this:

(i) Four influential scientific studies (all published after the settlement in the U.S.) found inadequate scientific support for any association between the use of PIO and bladder cancer;

(ii) Although Canada represents approximately 10% of the U.S. population, actual sales data suggests that Canada accounted for less than 10% of the U.S. PIO sales. Specifically, the sales data suggests that Canadian PIO prescription usage was in the range of 3 to 3.8% of American usage;

(iii) Direct comparisons between the U.S. and Canadian experience in pharmaceutical sales and usage are difficult because of pricing differences between brand and generic versions, different rates of brand vs. generic usage, use of online and cross-border pharmacies and the effects of different regulatory regimes relating to access to and pricing of pharmaceutical products; there was also the impact in 2015 in the U.S. of several large (multi-million-dollar) jury awards that no doubt influenced the final settlement amount and that would not materialize in Canada.

[6] For my part, the most important piece of new information were the four recent scientific studies that seriously undermined the plaintiffs’ causation allegation. I can now understand that the litigation risk and the negotiating landscape had changed dramatically over the two or three years following the 2015 settlement in the U.S. With the additional information as set out above, I am satisfied that the $25 million settlement amount is indeed fair and reasonable and in the best interests of the class.

[7] I note that the parties have agreed to a relatively straightforward claims process which will result in compensation payments to eligible recipients ranging from $50,000 to $225,000, depending on the evidence of bladder cancer severity. I also note that the compensation amounts reflect the more generous end of the spectrum of Canadian damage awards in this area.

[8] The proposed $25 million settlement is approved.

Legal fees

[9] Based on the retainer agreements, class counsel are entitled to a 30 per cent contingency fee plus disbursements and taxes. As discussed in Cannon,[^1] and as further refined in Brown,[^2] this contingency fee amount is presumptively valid on the facts herein and is approved.

Honoraria

[10] Class counsel ask that the representative plaintiffs each receive a $5000 honorarium for the good work that they did over some nine years of litigation. I do not question the representative plaintiffs’ contribution or commitment. However, as class counsel well understand, representative plaintiffs do not receive additional compensation for simply doing their job as class representatives. It is only where the representative plaintiff can demonstrate a level of involvement and effort that goes beyond what is normally expected and is truly extraordinary, or where there is evidence that they were financially harmed because they agreed to be a class representative that an honorarium will be justified.[^3]

[11] Here there is no evidence that the efforts of the representative plaintiffs were “truly extraordinary” or that they sustained any related harm. However, given their involvement and commitment over almost ten years of litigation I am prepared to approve an honorarium for each of them in the amount of $1500.

Disposition

[12] The proposed settlement, notices and compensation protocol are approved. As are the legal fees, the reduced honoraria and the payments to the public health insurers. Order to go as per the draft Order that was signed by me on April 9, 2021.

Signed: Justice Edward P. Belobaba

Notwithstanding Rule 59.05, this Judgment [Order] is effective from the date it is made, and is enforceable without any need for entry and filing. In accordance with Rules 77.07(6) and 1.04, no formal Judgment [Order] need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this Judgment [Order] may nonetheless submit a formal Judgment [Order] for original signing, entry and filing when the Court returns to regular operations.

Date: April 16, 2021

[^1]: Cannon v. Funds for Canada Foundation, 2013 ONSC 7686. [^2]: Brown v. Canada (Attorney General), 2018 ONSC 3429. [^3]: Aps v. Flight Centre Travel Group, 2020 ONSC 6779, at para. 43.