`1
`
`IN THE UNITED STATES DISTRICT COURT
` FOR THE DISTRICT OF DELAWARE
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`AMARIN PHARMA, INC., AMARIN
`PHARMACEUTICALS IRELAND LIMITED,)
`MOCHIDA PHARMACEUTICAL CO.,
`)
`LTD.,
`)
`
`
`)
`
`)
`Plaintiffs,
`
`) C.A. No. 20-1630-RGA-JLH
`v.
`
`
`)
`
`)
`
`HIKMA PHARMACEUTICALS USA INC., )
`HIKMA PHARMACEUTICALS PLC, AND )
`HEALTH NET, LLC,
`)
`)
`
`
`
`
`
`
`) J
`
`. Caleb Boggs Courthouse
`844 North King Street
`Wilmington, Delaware
`Thursday, October 14, 2021
`10:00 a.m.
`Oral Argument
`
`Defendants.
`
`BEFORE: THE HONORABLE RICHARD G. ANDREWS, U.S.D.C.J.
`
`APPEARANCES:
`
`FISH & RICHARDSON P.C.
`BY: JEREMY D. ANDERSON, ESQUIRE
`-and-
`BY: MICHAEL J. KANE, ESQUIRE
`(Minneapolis, MN)
`
`
`For the Plaintiffs
`
`
`
`
`
`
`
`Case 1:20-cv-01630-RGA-JLH Document 85 Filed 10/20/21 Page 2 of 83 PageID #: 1392
`2
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`APPEARANCES CONTINUED:
`HEYMAN ENERIO GATTUSO & HIRZEL LLP
`BY: DOMINICK GATTUSO, ESQUIRE
`-and-
`WINSTON & STRAWN LLP
`BY: CHARLES B. KLEIN, ESQUIRE
`For the Defendants Hikma
`Pharmaceuticals USA Inc. and
`Hikma Pharmaceuticals PLC
`PHILLIPS McLAUGHLIN & HALL
`BY: DAVID A. BILSON, ESQUIRE
`-and-
`HUSCH BLACKWELL
`BY: DON J. MIZERK, ESQUIRE
`For the Defendant
`Health Net, LLC
`
`
`
`*** PROCEEDINGS ***
`
`DEPUTY CLERK: All rise. Court is now in
`session. The Honorable Richard G. Andrews presiding.
`THE COURT: All right. Please be seated. If
`you're fully vaccinated and you want to, you can take your
`mask off.
`
`All right. So this is the motions to dismiss in
`Amarin vs. Hikma and Health Net.
`And for Amarin, for the Plaintiff, who's here?
`MR. ANDERSON: Good morning, Your Honor. Jeremy
`Anderson from Fish & Richardson on behalf of the Plaintiffs,
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`Case 1:20-cv-01630-RGA-JLH Document 85 Filed 10/20/21 Page 3 of 83 PageID #: 1393
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`Amarin Pharma, Inc, Amarin Pharmaceuticals Ireland Limited,
`and Mochida Pharmaceutical Company Limited. And with me
`today is my colleague from our Twin Cities' office, Mike
`Kane.
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`And Your Honor, we also have our clients here
`today. Mr. Jason Marks, general counsel, and Barbara Kurys
`is the Vice President of IP.
`THE COURT: All right. Thank you, Mr. Anderson.
`All right. And for the Defendant, Hikma?
`MR. GATTUSO: Good morning, Your Honor.
`Dominick Gattuso from Heyman Enerio Gattuso & Hirzel on
`behalf of Hikma. I have with me Charles Klein from
`Winston & Strawn who will be arguing on behalf of Hikma.
`And then I also have U.S. general counsel, Sam Park.
`Thank you, Your Honor.
`THE COURT: For a minute -- you said U.S.
`general counsel, I'm like, wait, the Government is here? I
`understand that you mean the general counsel for the U.S.
`part of Hikma.
`MR. GATTUSO: Yes, Your Honor.
`THE COURT: Okay. All right.
`And for Health Net?
`MR. BILSON: Good morning, Your Honor. David
`Bilson of Phillips McLaughlin & Hall. With me in the
`courtroom is Don Mizerk of Husch Blackwell for Health Net.
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`THE COURT: All right. Thank you.
`All right. Why don't we do this, why don't we
`have the motion to dismiss by Hikma first because that's the
`reason why I scheduled the argument in the first place. And
`then when we're done with that, we'll have the Health Net
`motion to dismiss which I expect to be pretty brief.
`All right. So Mr. Klein.
`MR. KLEIN: Good morning, Your Honor. It's nice
`to be back in court. I'd like to start with a high
`level that is probably clear and obvious to Your Honor, but
`it's, nonetheless, very important. And the point is that
`this is a test case. This --
`THE COURT: Well, so you can never be too sure
`about what's clear and obvious, but I did notice that there
`was an Amicus brief filed which, in my world, is not
`something that happens very often. And so, as I did see
`through the periodicals that I get that GSK vs. Teva was
`subject to a request for en banc hearing. Now, most every
`patent case is the subject of a request for en banc
`rehearing because the loser always thinks that they should
`have won.
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`But it struck me that there was a better than
`usual chance -- of course, the usual chance is in a
`.5 percent, but there was a better than usual chance that
`there might be further proceedings in the Court of Appeals
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`Case 1:20-cv-01630-RGA-JLH Document 85 Filed 10/20/21 Page 5 of 83 PageID #: 1395
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`on this case.
`Do I assume or do you know, are all kinds of
`people filing the Amicus briefs in regards to that case?
`MR. KLEIN: I imagine that will happen. I don't
`think it's happened yet. It might be too early. But as
`Your Honor probably knows, this is the second petition for
`rehearing. There was an initial petition.
`THE COURT: Well, no. I've got them both here.
`I know there's two versions of the opinion --
`MR. KLEIN: Correct.
`THE COURT: -- or I mean of the panel opinion
`with -- and that the second one came a long time after the
`first one, I think. Yeah. So I understand it's a point of
`hot dispute.
`MR. KLEIN: Okay. I can represent that AAM will
`be filing an Amicus in that case as well.
`THE COURT: Okay. I'm not sure who AAM is.
`MR. KLEIN: Oh, that's the Association for
`Accessible Medicines, the Generic Pharmaceutical
`Association.
`
`THE COURT: And they're going to file an Amicus
`
`here?
`
`MR. KLEIN: Correct, yes. And just so Your
`Honor understands what happened in the GSK case, which isn't
`directly related, but it is -- it's in the same ball park of
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`Case 1:20-cv-01630-RGA-JLH Document 85 Filed 10/20/21 Page 6 of 83 PageID #: 1396
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`what this case is about, which is there was a carved out
`label. And after the launch, long after the launch, there
`was a lawsuit for induced infringement. And a jury trial --
`and the jury awarded lost profits damages.
`And then it -- you know, it was appealed. And
`the decision came out and the decision caused a lot of
`controversy in the industry, and there was a petition for
`rehearing. I forget when that was, but it was a while ago.
`And then the concerns raised by the Amici and the Appellate,
`Teva were heard by the panel, and they vacated the initial
`decision and then reheard the case. And then they issued
`another decision two days after the report and
`recommendation in this case that expressly said they're
`narrowing the scope of their initial decision, and they
`wanted to make it clear that they're not upsetting the prior
`case law with regard to Section 8. You may be aware of
`that, but just in case you weren't, I just wanted to make
`sure you understood the context.
`And how does that relate to this case? Well,
`the entire pharmaceutical industry, Your Honor, is watching
`this case, and they're watching to see what happens to our
`motion to dismiss and how you're going to rule. And the
`reason they're watching that is because what Hikma did in
`this case was a standard Section 8 carve-out. There were
`two discrete cases, and Hikma completely carved out the
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`Case 1:20-cv-01630-RGA-JLH Document 85 Filed 10/20/21 Page 7 of 83 PageID #: 1397
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`patented indication.
`And as I'll explain in a moment, there is no
`plausible allegation that Hikma's carved out label is
`actively inducing doctors and patients to use its product to
`reduce cardiovascular death, or reduce cardiovascular risk
`or to use its product in a combination drug therapy with
`statins which is what the claims require.
`And so if these types of flimsy allegations
`based on a carved out label can get past a motion to
`dismiss, alarm bells are going to go off in every generic
`pharmaceutical company in the world because it won't make
`economic sense to do a carved out label if all that means is
`you're going to launch a product, and then you're going to
`get sued, and then the lawsuit is likely to survive a
`pleadings motion. Putting aside the litigation cost
`involved with that, if lightning strikes and the case gets
`to a jury and the jury awards lost profits, those lost
`profits damages are going to far exceed what the generic is
`even going to make on the product.
`So if these allegations -- and I'll explain why
`they're flimsy in a moment, but if these can get past the
`motion to dismiss, there's no question that generics are
`going to think twice about using the Section 8 pathway.
`It's going to mean less generic competition and higher
`prices. And counsel's probably going to come up and say,
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`I'm saying the sky is falling or I'm engaging in hyperbole,
`but this is the exact concern that was raised at the Federal
`Circuit with multiple Amici, and this is why the Federal
`Circuit of the panel backed off vacating the initial
`decision and issued a more narrow decision.
`Now, whether that decision is right or wrong,
`you know, it's subject to that petition for rehearing, and
`I'm certainly not advocating that it was decided correctly.
`But what's clear and express in that new decision is that
`the intent of the majority was to distinguish the Teva case
`from your typical Section 8 carve-out. And in that case,
`the Court did find that there was substantial evidence to
`support a jury verdict that the label, even the carved out
`label taught each and every step of the patented method.
`THE COURT: Well, so let's put GSK aside for a
`second, though. I think, obviously, we'll come back to it,
`but the procedure, I think, is what you're getting to.
`But the procedure here, as I understand it, is
`the Plaintiff takes the label and sort of says all the
`things that would be covered by our patented stuff, they're
`crossed out, and then you get what's left. And so your
`label, leaving possibly aside the paragraph about it's not
`indicated for the cardiovascular indication, is exactly what
`the Plaintiff basically ceded to you; right?
`MR. KLEIN: It's close, but just to be clear, so
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`the Plaintiff doesn't black anything out. What the
`Plaintiff did was after it got its second indication --
`well, let me back up a little bit. When Hikma filed its
`ANDA, there was only the one indication. Okay.
`Then a couple months before our trial in Nevada,
`they got approval for the second indication. Then they
`listed a bunch of patents in the Orange Book, including the
`three at issue here. And they included use codes, which
`Your Honor may be familiar with. So the use codes describe
`the method briefly. And the purpose of that, and this is
`discussed in the Supreme Court Caraco case, the purpose of
`the use code is so that the generic can make an informed
`decision as to whether they can carve out the patented
`method or not.
`And their use codes are all directed to the CV
`indication of use. None of their use codes talk about the
`indication that's in Hikma's label. And so Hikma carved --
`used those use codes and then Hikma proposed the carve-out
`to FDA and carved out everything related to the new
`indication.
`And with regard to that CV limitation of use,
`there's no CV limitation of use in the new VASCEPA label.
`And so it's not as though Hikma carved that out. It doesn't
`exist any more.
`And so -- and under the statute, and I have a
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`slide on this, under the statute, the generic is supposed to
`copy the branded label. The exception being it can carve
`out a patented method. So there is no CV limitation of use
`in the current VASCEPA label.
`THE COURT: But in other words, you could, let's
`just say, hypothetically do a bad carve-out. And if you did
`a bad carve-out, and as a result you were encouraging,
`leaving aside the intent, but you were saying, you know, you
`can do this and actually that's the patented method?
`MR. KLEIN: That's possible, and that's what the
`GSK panel said that is what happened in that case. That the
`carved out -- I think the phrase is a carve-out is not
`skinny enough, right. And that can happen.
`But here we're talking about two very discrete
`indications. And I'm happy to explain why they're discrete,
`if you would like.
`THE COURT: And I think I kind of understand
`that because, though I have looked through the GSK, the
`second GSK opinion at least twice, and it seemed like there
`it was kind of two of the three indications had enough
`overlap. So maybe it was kind of subject to debate as to
`what exactly needed to be carved out, which I guess is if
`the -- if you say the Court of Appeals decision was not
`skinny enough, it would seem to indicate that, you know, in
`the end after a trial, there was a finding that it was a bad
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`effort of carve-out.
`But I guess, then, if that's the case, then how
`do I know, maybe that's what you're about to tell me, that
`we don't have a bad effort at carve-out here?
`MR. KLEIN: Because I'll walk through the label
`and I'll walk through the steps of the patent and explain
`it's not even close. It's not even a close call. And I
`have to take off the screen saver, but I've got some slides
`that will help illustrate that. Okay.
`And actually, Your Honor, maybe it's worthwhile
`to put on the screen that GSK provision. I'm going to jump
`around in this slide deck to Slide 32. And if you don't
`have a copy --
`THE COURT: I've got some copies here, but I can
`look at the screen.
`MR. KLEIN: Yeah, right. So we're on Slide 32
`and this is from the recent GSK decision, and you can see
`what the panel said. "Teva failed to carve out all patented
`indications." And then said, "All of the claim limitations
`were contained in the Indication section, the Clinical Study
`section (to which doctors were directly referred by the
`Indication section), and the Dosage and Administration
`section."
`
`Now, there's a debate about whether that's the
`case, but that's what the panel held. And the Indication,
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`and Dosage and Administration sections are typically the two
`sections you look to to see whether the label is inducing
`infringement. Sometimes you look to the Clinical Study
`section, and Your Honor did that in your Sanofi case. But
`when that happens, it's when the indication is referring to
`the Clinical Study section.
`There's no argument here that our Indication
`section or the Dosage and Administration section is inducing
`infringement of any of the patents. And I think that's a
`good starting point for going through some of the background
`here.
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`And actually, before I get to the background, I
`do want to make one other quick point about the procedural
`posture of this case. I mean, I recognize we're in the
`pleading stage, and sometimes there's an inclination to kick
`the tires and say, Let's see what happens in discovery. But
`nothing's going to change in discovery. This is an AB-rated
`generic drug. The label is what it is.
`They argued we removed the CV indication of use.
`That's not true. Our label never had a CV indication of
`use. It hasn't changed. There's no argument it's going to
`change.
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`We have press releases and a website that they
`rely on. They've actually been taken down. And regardless,
`the GSK decision, as I'll explain, said that's not
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`sufficient.
`So unlike the Takeda case, Your Honor, where as
`you may recall, there were allegations that -- that was a
`Judge Robinson case, and then you took it over.
`THE COURT: I remember, about gout patents and
`
`the FMF.
`
`MR. KLEIN: Correct. Right. Right. Yeah.
`And unlike that case -- so Judge Robinson, after
`the Takeda Federal Circuit decision, which you probably have
`seen in all the briefs, granted a motion to dismiss. But
`then Takeda came back and said, Wait a minute. We have
`evidence that there are sales representatives marketing the
`product off label.
`We were before Your Honor on summary judgment.
`You eventually granted summary judgment, but that was not an
`AB-rated drug.
`Here, there are no sales representatives. Hikma
`is not marketing this product. It's automatically
`substituted at pharmacies.
`So discovery is not going to reveal any type of
`off-labelling marketing. Literally, if you were to deny the
`motion to dismiss, we'll be back here in a few months on
`summary judgment with the same evidence. Nothing is going
`to change.
`
`And so --
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`THE COURT: But so, I guess, and I'm sorry to
`interrupt here, but I mean, in some ways it seems to me like
`you're asking me on the motion to dismiss to do summary
`judgment. And in particular, you know, that you want me to
`be looking through the labels and deciding -- you know,
`basing nothing on the arguments back and forth as to whether
`or not somewhere in the label there's each of the elements
`of a claim; right?
`MR. KLEIN: Well, I'm asking you under the -- to
`do that under the 12(b)(6) plausibility standard. It's --
`as a practical matter, the inquiry is not materially
`different than the summary judgment standard. And courts,
`including, you know, Judge Robinson, and then the Bayer
`decision by the Federal Circuit, and the AstraZeneca v.
`Apotex from 2012, they all dismissed these types of
`allegations on the pleadings based on the labelling.
`The label is part of the record. There's no
`dispute about that. And as we go through the label and
`compare it to the claims, in my view, Your Honor, it's not a
`close call. It's not even close.
`And with that, I'll breeze through the
`background because I know you're generally familiar with the
`fact that VASCEPA has two indications. One is for
`cardiovascular issues, and one is for something called
`severe hypertriglyceridemia. So a long way of saying your
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`triglycerides are very high.
`The concern -- there's no dispute about this.
`The concern with severe hypertriglyceridemia is not that
`it's going to cause cardiovascular issues. It's going to
`cause something else called pancreatitis, which is an acute
`condition. It can even kill you. And that indication, the
`first indication that was approved was designed for this
`acute condition, severe hypertriglyceridemia.
`Amarin initially tried to get a cardiovascular
`indication at the same time. FDA rejected it. It required
`a new study. They did this new study called Reduce It, and
`then they got the second indication. So these are discrete
`indications.
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`THE COURT: Is there anything in the Complaint
`or otherwise, something I can rely on that says kind of what
`the -- and this may be a poor choice of words, but what the
`relative use of the drug for the one indication is versus
`the other indication?
`MR. KLEIN: Well, there's a decision by Judge Du
`in Nevada that -- it's a lengthy decision and it discusses
`all of this. And in fact, the Court held that there was no
`nexus between the Reduce It study that caused -- that
`supported the CV indication and the patents that cover the
`SH indication.
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`So we went to trial on that shortly before the
`pandemic, and the Court invalidated all of the patents that
`had covered the SH indication. So you know, that's -- you
`can take public notice of that decision. I don't think --
`THE COURT: So that's the reason why that's not
`covered by any patents is because you've invalidated all of
`them?
`
`MR. KLEIN: Yes, that's correct. That's why
`it's not patented and that's why we launched. We launched
`shortly after the Federal Circuit summarily affirmed the
`invalidity ruling.
`Hikma's label, it's just the old indication.
`And you know, we cite the Supreme Court case here. This is,
`obviously, a pathway that's in the statute. It's been
`blessed by the U.S. Supreme Court, the Section 8 pathway. I
`know Your Honor has dealt with it in the past.
`With regard to the statute, which is a very
`simple statute, I want to emphasize the adverb actively.
`The statute itself requires active inducement, and this goes
`to their argument, which I'll get to later, that silence or
`a failure to put language can somehow actively induce. It
`doesn't make any sense. It doesn't make any legal sense.
`It doesn't make any logical sense.
`And the Courts have said time and time again,
`merely describing an infringing mode is not the same as
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`recommending, encouraging or promoting an infringing use.
`So there has to be active inducement. The label -- and I
`want to focus on the label first. I'll get to the extra
`label stuff after. But the label has to tell doctors and
`patients, you should practice the same method that is
`covered by the patents.
`I want to also emphasize this point because
`sometimes the cases merge two separate elements of active
`inducement. Active inducement requires specific intent, but
`it also requires active steps. It gets a little confusing
`in the ANDA context because the active steps can be used to
`infer specific intent, but these are two separate elements.
`And so to the extent you hear counsel come up and talk about
`specific intent, intents of fact issue, that's irrelevant
`because our motion is based on the absence of active steps
`of actual instructions in the label. Specific intent is a
`separate thing they would eventually need to prove, but
`that's not the focus of our motion today.
`Before I get into the label, Your Honor, I do
`want to emphasize one Black Letter legal principle that may
`have gotten lost in the shuffle with all of the briefs. And
`this is a basic legal principle that in order for them to
`plead induced infringement, they have to plead and
`eventually prove that Hikma is inducing another party to
`perform every single step of the method.
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`So saying we have a generic equivalent, that's
`not teaching how to perform each and every step of the
`patented method. And that's why I have slides comparing the
`label to the patent, so you can see the steps.
`And I'm focusing on independent claims and claim
`elements that cut across all of the claims in the three
`patents-in-suit. And they're not -- and these aren't going
`to be claim construction issues, Your Honor, because they're
`very clear.
`So there are three patents in suit. The first
`one is the '537 patent, and this patent requires, at the
`beginning requires dual drug therapy. You have to take
`Icosapent, but you have to also take a statin. If you're
`not also taking a statin, you're not satisfying an element
`of the claim.
`Then you have to take the drug to reduce
`cardiovascular events. That's the method of treatment.
`And then the patent explains that you have to do
`that in a very specific patient population, a
`hypercholesteremia patient who had not previously
`experienced such an event. This is a very specific patented
`method.
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`The '861 patent gets even more specific. You
`have to reduce the risk of cardiovascular death. And as
`I'll mention, this is not even an FDA-approved method for
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`VASCEPA. And it's a very specific patented method, and
`again, it has to be in a particular patient population,
`patients with established cardiovascular disease.
`And then the third patent, the '077 patent, this
`was also listed in connection with the CV indication. It's
`a CV method of use. But if you look at the claims, it also
`requires statin use in a particular patient population with
`something called mixed dyslipidemia.
`Now, before I actually get into the label, Your
`Honor, I want to point to an omission in the First Amended
`Complaint that we submit is critical. Now, starting with
`the Warner-Lambert case, and the Bayer Federal Circuit case
`makes this same point, if you don't have FDA approval for
`the patented method, you're, obviously, not inducing
`infringement of the patented method.
`If you don't have FDA approval for a patented
`method, you can't go into the public and you can't say
`practice that method. If you did, it could be off-label
`marketing. It could also be a crime. And the courts have
`talked about that.
`In the First Amended Complaint, Amarin concedes
`the Hikma generic does not have an FDA-approved indication
`for CV risk reduction. What this means, and I don't think
`there's any dispute about this, Your Honor, Hikma can't go
`to the market, can't talk to doctors and patients and say,
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`Take our drug because it will help reduce the risk of
`cardiovascular events. They can't do that. That could be a
`crime, yet they're saying that's what the label is
`encouraging doctors to do.
`So as a threshold point, their theory doesn't
`make sense given that they've conceded our product is not
`even FDA approved for any of the patented methods.
`Now, we get to the label, and you'll see why I
`made these comments at the beginning, that the allegations
`of induced infringement are not even close. So all three
`patents concern reducing cardiovascular risk. The term
`cardiovascular is used twice in the label. Only in the
`section of the label called Patient Information, and this is
`where the label --
`THE COURT: This is the part where it's kind of
`like a warning not to mix?
`MR. KLEIN: Well, kind of, although it's not
`about mixing drugs, but yes. There are these hypothetical
`questions for patients to read. Right. And the
`hypothetical question here is: What are the possible side
`effects of Icosapent, not how do you use the drug. You
`know, how can this harm me?
`And Hikma's label says there are -- Icosapent,
`this drug can cause serious side effects. Heart rhythm
`problems which can be serious and cause hospitalization have
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`hap