Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 1 of 198
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
`_______________________________
`TEVA PHARMACEUTICALS
`INTERNATIONAL GMBH and
`TEVA PHARMACEUTICALS USA, INC.,
` Plaintiffs, Civil Action
` No. 18-12029-ADB
`
`V.
` October 25, 2022
`ELI LILLY AND COMPANY,
` 9:33 a.m.
`
`
` Defendant.
`_______________________________
`
`REDACTED TRANSCRIPT OF JURY TRIAL DAY 6
`BEFORE THE HONORABLE ALLISON D. BURROUGHS
`UNITED STATES DISTRICT COURT
`JOHN J. MOAKLEY U.S. COURTHOUSE
`1 COURTHOUSE WAY
`BOSTON, MA 02210
`
`
`
`DEBRA M. JOYCE, RMR, CRR, FCRR
`ROBERT PASCHAL, RMR, CRR
`Official Court Reporters
`John J. Moakley U.S. Courthouse
`1 Courthouse Way, Room 5204
`Boston, MA 02210
`joycedebra@gmail.com
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
`_______________________________
`TEVA PHARMACEUTICALS
`INTERNATIONAL GMBH and
`TEVA PHARMACEUTICALS USA, INC.,
` Plaintiffs, Civil Action
` No. 18-12029-ADB
`
`V.
` October 25, 2022
`ELI LILLY AND COMPANY,
` 9:33 a.m.
`
`
` Defendant.
`_______________________________
`
`REDACTED TRANSCRIPT OF JURY TRIAL DAY 6
`BEFORE THE HONORABLE ALLISON D. BURROUGHS
`UNITED STATES DISTRICT COURT
`JOHN J. MOAKLEY U.S. COURTHOUSE
`1 COURTHOUSE WAY
`BOSTON, MA 02210
`
`
`
`DEBRA M. JOYCE, RMR, CRR, FCRR
`ROBERT PASCHAL, RMR, CRR
`Official Court Reporters
`John J. Moakley U.S. Courthouse
`1 Courthouse Way, Room 5204
`Boston, MA 02210
`joycedebra@gmail.com
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 2 of 198
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`APPEARANCES:
`FOR THE PLAINTIFFS:
`DOUGLAS J. KLINE, ESQ.
`ELAINE HERRMANN BLAIS, ESQ.
`ROBERT FREDERICKSON, III, ESQ.
`ERIC T. ROMEO, ESQ
`MOLLY GRAMMEL, ESQ.
`JOSHUA S. WEINGER, ESQ.
`KEVIN P. MARTIN, ESQ.
`TARA ROSE THIGPEN, ESQ.
`Goodwin Procter, LLP
`100 Northern Avenue
`Boston, MA 02210
`617-570-1000
`dkline@goodwinlaw.com
`eblais@goodwinlaw.com
`rfrederickson@goodwinprocter.com
`eromeo@goodwinprocter.com
`mrhodes@goodwinprocter.com
`kmartin@goodwinprocter.com
`jweinger@goodwinprocter.com
`tthigpen@goodwinlaw.com
`NATASHA E. DAUGHTREY, ESQ.
`SEAN M. ANDERSON, ESQ.
`Goodwin Procter LLP
`601 S. Figueroa Street
`Los Angeles, CA 90017-5704
`213-426-2500
`NDaughtrey@goodwinlaw.com
`AUDIE SOUCY, ESQ.
`GRACE PEACE TRUONG, ESQ.
`GABRIEL BRUNO FERRANTE, ESQ.
`Goodwin Procter LLP
`New York Times Bldg
`620 8th Ave
`New York, NY 10018
`212-813-8100
`MADELINE DiLASCIA, ESQ.
`Goodwin Procter, LLP
`1900 N St NW
`Washington, DC 20036
`202-346-4000
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 3 of 198
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`FOR THE DEFENDANT:
`CHARLES E. LIPSEY, ESQ.
`RYAN P. O'QUINN, ESQ.
`Finnegan,Henderson,Farabow,Garrett & Dunner, LLP.
`1875 Explorer Street
`Reston, VA 20190
`571-203-2700
`charles.lipsey@finnegan.com
`oquinnr@finnegan.com
`EMILY R. GABRANSKI, ESQ.
`MARTA GARCIA DANESHVAR, ESQ.
`OULU (LULU) WANG, ESQ.
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`Two Seaport Lane, 6th Floor
`Boston, MA 02210-2001
`202-408-4331
`emily.gabranski@finnegan.com
`marta.garcia@finnegan.com
`lulu.wang@finnegan.com
`PIER D. DeROO, ESQ.
`DANIELLE A. DUSZCZYSZYN, ESQ.
`J. MICHAEL JAKES, ESQ.
`SYDNEY R. KESTLE, ESQ.
`YOOJIN LEE, ESQ., PhD.
`MATTHEW J. LUNEACK, ESQ.
`WILLIAM B. RAICH, ESQ.
`DENISE MAIN, ESQ.
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`901 New York Avenue Northwest
`Washington, DC 20814
`202-408-4418
`pier.deroo@finnegan.com
`danielle.duszczyszyn@finnegan.com
`mike.jakes@finnegan.com
`matthew.luneack@finnegan.com
`william.raich@finnegan.com
`denise.main@finnegan.com
`ANDREA L. MARTIN, ESQ.
`Burns & Levinson LLP
`125 Summer Street
`Boston, MA 02110
`617-345-3000
`amartin@burnslev.com
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 4 of 198
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`ALSO PRESENT:
`FROM TEVA PHARMACEUTICALS:
`Jo Hilliard, Esq.
`Lori Wolf, Esq.
`Colman Ragan, Esq.
`FROM ELI LILLY:
`Christalyn Rhodes, PhD
`Gerry Keleher, Esq.
`Pat Hastings
`Mira Mulvaney, Esq.
`Amanda Walter
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 5 of 198
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`P R O C E E D I N G S
`(The following proceedings were held in open
`court before the Honorable Allison D. Burroughs, United States
`District Judge, United States District Court, District of
`Massachusetts, at the John J. Moakley United States Courthouse,
`1 Courthouse Way, Boston, Massachusetts, on October 25, 2022.)
`MR. LIPSEY: We have a problem with Dr. Rosenthal. If
`you recall, he was here, I wanted to take an adverse cross.
`Your Honor said I had to stay within the scope of direct and
`that he was to come back. And we notified -- they told us
`their case was likely to end tomorrow, so we told them last
`night that we wanted Dr. Rosenthal on Friday. And we were
`informed thereafter that he is now in Israel and would not be
`back until after the trial is over. And so I would like one of
`two options:
`I would like either to have him ordered to give his
`testimony by Zoom in this court by whatever means we have to do
`to make that happen, or an option for me to see if there's any
`other curative remedy short of that that would eliminate the
`need to do that. But that I would need to think about for a
`little while.
`THE COURT: I'd like him to testify by Zoom.
`MS. BLAIS: So, your Honor, there's a major fact that
`was left out of Mr. Lipsey's recitation of the issues.
`We got the notice last night at 8:30 that they would
`like him on Friday. I e-mailed him immediately, within six
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`minutes. He responded to say that he has been called to Israel
`because of a significant health issue with a very close family
`member that he has to attend to. So he has not just blown us
`off or --
`THE COURT: I'm not suggesting that he's blowing us
`off. I'm just trying to figure out what it is I can do to fix
`this.
`
`MS. BLAIS: So let me tell you, then, what I did next.
`I asked him, Could you do it on Friday? He said, I will have
`just gotten off a 14-hour flight. So Friday Zoom feels
`particularly unfair given the circumstances.
`This morning I asked if he could do it Monday by Zoom.
`He has not responded to me yet, but we're trying to solve the
`problem.
`I'll also note that when we had the discussion,
`Mr. Lipsey put on the record that he had raised with us the
`possibility of using his deposition if he was unavailable. We
`had a little back-and-forth about whether that had actually
`been proposed, but we put on the record that we did think that
`was a reasonable solution.
`What I will propose is I will continue to communicate
`with him. I don't know what family member it is, I don't know
`the situation, but I understand, and he was -- when he left
`here he said, Sure, I can come back between now and November
`10th. So we didn't know the issue either until last night, but
`we're trying to work it out.
`I'll do my very best to get him available by Zoom on
`Monday, but I don't think there's any, like, curative
`instruction sort of that -- I'm surprised that you were not
`told the reason he's not here, you now know, and I'll try my
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`best --
`
`THE COURT: It's fine. I don't want to have to give a
`curative instruction. I want them to have some way of
`eliciting the substantive information that they want from him.
`MS. BLAIS: Absolutely.
`THE COURT: I think the best and fairest way to do
`that is Zoom because it most replicates him being here, which
`is what they would have had if this had been differently done.
`I understand about Friday, you guys can rearrange and
`deal with him on Monday, and if -- we have the whole rest of
`this week to sort out whether Monday is going to be a problem.
`I understand your point, I understand your problem;
`I'm not blaming anybody for it. I thought he was, you know, a
`very willing witness, really.
`MS. BLAIS: Absolutely.
`THE COURT: So we'll -- I hear you and we'll do what
`we can to work it out. If we can't work it out, we'll go to
`plan B, C, and D, but we'll get you the substance of what
`you're looking for on the record before the trial is over.
`MR. LIPSEY: Thank you, your Honor.
`MS. BLAIS: I think the only other issue we had this
`morning is Lilly wants to, I believe, close the courtroom for
`the plaintiff -- a transcript -- the chicken is out --
`THE COURT: I want to check one thing off my list.
`Done. You see my new chicken? It was delivered to my
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`chambers yesterday. You know what it does?
`MR. KLINE: It -- so if something goes on a little too
`long, your Honor, I can --
`THE COURT: It kind of makes that noise like when you
`think about the teacher in Charlie Brown (indicating). I kind
`of like that. When I pick it up and I'm looking at it, you
`know I'm bored.
`MS. BLAIS: So, your Honor, as I was saying, I think
`that he wants to close the courtroom for one of the
`depositions. We don't oppose it, but it's their issue, so if
`they want to raise it. Just wanted to not let that go.
`MR. LIPSEY: This is Mr. O'Quinn's territory, so I
`will be quiet again.
`MR. O'QUINN: We're going to have to close the
`courtroom, I think, a couple of times today, so we'll just have
`to work together.
`I believe we're starting closed, aren't we?
`MR. KLINE: I think we just opened, as far as we were
`concerned. I thought Ms. Grammel said at the end of the day
`she had reached --
`THE COURT: We opened the courtroom at 4:00.
`MR. KLINE: Then when we finished, but she's not here,
`so I don't know.
`THE COURT: I will close the courtroom. I really want
`to do it as little as possible.
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`MR. O'QUINN: I have split my cross of Mr. Mauk into
`open and closed portions. If we're open again, we can do the
`open portion first and finish closed, and then either we can go
`to Hausdorff or we can play the videos while we're still closed
`or we can go to lunch and start closed.
`I also want to minimize disruptions as much as
`possible, but it's kind of hard to guess how that will go.
`THE COURT: Okay. We'll just take it as it comes.
`MR. KLINE: We understand.
`THE COURT: Yesterday there wasn't anybody in -- there
`was one person that we needed to exclude.
`Is there anybody in here right now that would need to
`be excluded? I don't know who these people are.
`MR. O'QUINN: The same person will be back today is my
`understanding.
`THE COURT: Who is she?
`MR. O'QUINN: She's for Pfizer.
`THE COURT: Okay. Are these people in the courtroom
`now all with you all?
`MR. O'QUINN: Yes, your Honor.
`THE COURT: Okay.
`Much easier if there's no one we have to throw out,
`right? All right.
`MR. O'QUINN: Thank you, your Honor.
`MR. KLINE: Thank you, your Honor.
`THE COURT: Anything else for --
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`MR. KLINE: I don't think so.
`MS. BLAIS: One more chicken squeak?
`THE COURT: I think I might show it to the jury.
`(Discussion off the record.)
`THE CLERK: All rise for the jury.
`(Resumed at 10:04 a.m.)
`(Jury entered the courtroom.)
`THE CLERK: Court is in session. Please be seated.
`THE COURT: So I have two things for you this morning.
`First of all, so my husband's traveling, I'm managing
`my kids, this trial, like it's all a little grim at my house
`this week. So I'm eating a lot of garbagey food. Somebody
`left this in my chambers yesterday. It was the highlight of my
`day. You know what it does? I was thinking that we could pass
`one out to each of you, if you couldn't hear anything or you
`were bored, you could let them know.
`Here's the other thing, on a more serious note -- this
`is my new favorite belongings, though. My kids would get such
`a kick out of it that I would never get it back, so it's going
`to live here.
`Here's the other thing. So you guys do remember that
`at the beginning of the trial, Dr. Arnon Rosenthal testified.
`For various reasons not worth going into, he testified in their
`case but they want to hear -- they want him to testify again in
`their case in chief. It wasn't going to be a problem; he was
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`just going to come back and do it. But he's had a situation
`that's required him to be out of the country. So we're trying
`to figure out how we can best make this work for everybody so
`they can get his testimony and he's not horribly inconvenienced
`given the time change with where he is.
`So the current proposal on the table is that he
`testify by Zoom Monday morning at 9:00. That would require us
`to sit 9:00 to 1:00 on Monday instead of 10:00 to 4:00. We may
`have other alternatives available if that doesn't work for you.
`I got to thinking that because it was Halloween, you guys might
`like to start early and get home early, if any of you have kids
`or doors to answer, anything like that.
`We already have to sit 9:00 to 1:00 on Tuesday, so I
`know that -- as inconvenient as that 10:00 commute is, the 9:00
`commute is worse. So we want to leave it up to you. So when
`we send you back for the lunch break, talk amongst yourselves
`and figure out if you can live with doing 9:00 to 1:00 two days
`next week. If you can't do it on Monday, or you don't want to
`or whatever the consensus is, you don't need to explain to us
`why, we'll make other arrangements for Dr. Rosenthal. That's
`our first proposal on the table. You guys can talk about that
`at lunch.
`
`I'm disinclined to do 9:00 to 1:00, it gives us a
`little but shorter trial time which pushes us a little bit
`longer, and the commute time, but I thought with it being
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`Halloween, it might actually work for everybody. So discuss it
`amongst yourselves, you don't have to explain your decision,
`you just have to give a thumbs up or a thumbs down on Monday
`morning at 9:00.
`Do you want a turn with the chicken or you just want
`to start?
`MS. GRAMMEL: I'll start, but why don't you give the
`chicken a ring.
`THE COURT: No. I --
`MS. GRAMMEL: Okay. Well, absent the chicken, we'll
`just start.
`THE COURT: If you feel you need the chicken, let me
`know, and I'll pass it over. It's communal for the day.
`Do you want a turn with the chicken, too, or you're
`
`good?
`
`THE WITNESS: All I heard was that my testimony was
`dense and I needed the chicken for levity.
`THE COURT: I said the trial testimony was dense. I
`didn't put it on you.
`THE WITNESS: Thank you for clarifying.
`THE COURT: That came up because we're going to close
`the courtroom again this morning. We were talking about ways
`we could do it without taking a break by making people move. I
`said I think the jurors are probably okay with a little mental
`break while we move people around because the trial testimony
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`can be dense.
`THE WITNESS: Fair enough.
`THE COURT: That was not leveled at you.
`If you do get to be dense, you know, I'll just give
`you the little --
`THE WITNESS: Fair enough.
`THE COURT: All right.
`When you're ready, Ms. Grammel.
`MS. GRAMMEL: Thank you, your Honor.
`BRYAN MAUK, having been previously duly sworn by the
`Clerk, was further examined and testified as follows:
`CONTINUED DIRECT EXAMINATION
`
`BY MS. GRAMMEL:
`Q.
`Good morning, Mr. Mauk.
`Just to reorient ourselves, you were testifying a
`little but about what impact it had on AJOVY to be
`disadvantaged at a major national account. You were explaining
`what Teva did to respond to that challenge, and I was just
`hoping you could maybe remind the jury about what your
`testimony was on that.
`A.
`Sure. So being severely disadvantaged on formulary or
`being excluded from formulary provides significant hurdles to
`the physician who is prescribing the medication. I believe I
`had spoke about when a physician prescribes a medication, then
`he or she will enter it into their system, they'll see if it's
`covered on the patient's formulary or not, and at that time
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`period he or she would need to make a decision whether they go
`through the escalation procedure with the health plan for
`appeals or would they choose another medication at the time.
`So it has an impact on the prescribing, therefore, the
`market share and the volume for the product.
`Q.
`And what, if anything, did Teva do to deal with that
`challenge of the negative impact on AJOVY's market share and
`volume in accounts where it was disadvantaged or excluded from
`formulary?
`A.
`Sure. So the organization, I think yesterday we spoke a
`lot yesterday about that time frame, kind of internal intense
`conversations about what we do to gain mare formulary access.
`There were discussions about escalating rebates. Some of the
`discussion yesterday showed that, so how much higher would we
`need to go in rebates in order to gain formulary access, as
`well as what else could we be doing to help the physician and
`the patient receive our medication, so the use of different
`co-pay-type programs that allowed the physician and the patient
`to still receive the medication, even though there was a
`negative formulary position.
`Q.
`So let's talk a little bit about that, about those
`co-pay-type programs that Teva was considering in response to
`the challenge of low market access in certain accounts.
`Could you please turn to Exhibit PTX 1708.
`Okay.
`
`A.
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`Do you recognize this document?
`Q.
`I do.
`A.
`What is it?
`Q.
`So this is an output of a workshop. You can see on here
`A.
`it was in February of 2021, with a lot of different internal
`associates looking at that exact question at that time frame.
`What were the strategic options available for Teva to both
`maintain the access that we had already gained for the product,
`as well as continue to grow the access. The market was
`continuing to evolve with the current players, other
`medications that were in development. So it was both a look of
`protection of the formulary access that we had and how do we
`gain more access.
`Q.
`So what were those strategic tools that Teva was
`considering at this time in February 2021?
`A.
`Sure. So it was both, like I spoke about, different
`rebates, escalating of the rebates. A discussion about
`different types of formulary positions. We had established
`what our target formulary position was and our target. Would
`we be willing to live with different formulary positions. And
`then, lastly, the use of the different types of co-pay programs
`that we spoke about.
`Q.
`So where, if anywhere, in Exhibit PTX 1708 can we see a
`discussion of those co-pay programs?
`A.
`Sure. All right. So if we go to slide 16. This shows --
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 16 of 198
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`there is a lot on here as well, I appreciate the dense comment,
`there's a lot on here.
`So let me just orient you.
`On the left, this table that you're seeing is intended
`to represent the different types of co-pay or savings programs
`that Teva was using for AJOVY in 2020. You can see the date,
`April through June of 2020. So the top legend shows the
`different types of programs.
`So just very high-level, savings card means that the
`drug was covered by the health plan, but we were helping to
`reduce the co-pay that a patient would have to pay at pharmacy.
`FWB or DCP is full WAC buydown-denial conversion
`program. This is where a patient goes to the pharmacy to fill
`the medication, it's denied by the health plan or it's not
`covered. In that situation, the patient, in a normal
`situation, would have to pay the full list price for the
`product. In this situation, Teva would take on that financial
`responsibility. So Teva would do the full WAC buydown, which
`is the definition of that.
`A voucher is a different type of program allowing a
`trial of the medication behind that.
`And then the full WAC buydown savings card is in a
`situation where if a patient has a significant prior
`authorization, so if the physician has to provide the health
`plan documentation, that sometimes takes time, so Teva was
`allowing a limited time period where Teva would pay for the
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 17 of 198
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`6-17
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`full product while that prior authorization was being resolved
`so that the patient could start therapy right away.
`So those are the types of programs that were in place
`at the time.
`Q.
`So, Mr. Mauk, I hope you'll bear with me. These terms may
`be new to some of the jury --
`A.
`Sure.
`Q.
`-- they were new to me when I started to learn this
`information, so could you just remind us what a health plan is.
`A.
`Oh, sure. Health plan is the commercial organization that
`is responsible for the development and execution of health
`benefits, health insurance for individuals.
`Q.
`And so what does it mean that some of these programs are
`available to patients when AJOVY is covered by the health plan?
`A.
`So that means that -- so, example, if AJOVY was covered in
`a preferred formulary position, the patient would be
`responsible for a co-pay, sometimes that's $35, $50, based upon
`the health benefit. So this would just mean that in that
`situation, that $35 or $50 would be reduced to a certain number
`lower than that so it was easier for the patient to afford
`their co-pay.
`Q.
`And is that the savings card you testified about a minute
`ago?
`A.
`Yes.
`Q.
`Now, you also used the term "full WAC buydown." Could you
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 18 of 198
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`also remind us what "WAC" means?
`A.
`Sure. WAC is wholesale acquisition cost, which is also
`known kind of as the list price, just what prices the
`manufacturers set that is publicly available in the market.
`Q.
`So is that like the full price of the drug?
`A.
`The full price, yes, thank you.
`Q.
`And you mentioned that the savings card kicks in when
`AJOVY is covered by the health plan. Which, if any, of these
`patient assistance programs were available when AJOVY was not
`covered by a health plan?
`A.
`That would be the full WAC buydown-denial conversion
`program, the one highlighted in the legend in red.
`Q.
`And it's red as opposed to that pink; is that right?
`A.
`Correct, yep, FWB-DCP.
`Q.
`Thanks for walking us through all of that.
`Again, what's the impact to Teva? What's Teva's role
`in the full WAC buydown-denial conversion program, that
`FWB-DCP?
`A.
`Sure. So in that situation, Teva takes on the full price
`of the product. So Teva would pay the full list price of the
`product because that's what the patient was responsible for
`through the decision of their health plan. So in that
`situation, instead of the patient paying the full WAC or the
`full list, Teva would pay that for the patient.
`Q.
`So why does Teva do that? Why is Teva buying its own
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 19 of 198
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`6-19
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`drug?
`A.
`Well, it's a very -- it's a costly tool to use. In this
`time period, Teva was using this -- we spoke about yesterday,
`there was some accounts where we had very poor access, either
`we were disadvantaged or we were not covered, so it was
`important for Teva to find ways to continue to keep physicians
`interested in the medication, in prescribing the medication as
`it's clinically relevant for the patient. And this was a type
`of tool to use, that even in the face of negative formulary
`positioning, it allowed the physicians still to prescribe and
`the patient still to receive the medication and to keep certain
`market shares in the market.
`Q.
`And is that typical for a drug company to have a program
`like that, where it's buying its own drug instead of getting
`money coming in from somewhere else for it?
`A.
`So it's typical more so at the launch time frame. So
`usually right around a launch period these types of programs
`are used. That time period before health plans make formulary
`decisions is when they would use these type of programs
`typically.
`Q.
`And so why is that? Why is it typical for a drug maker to
`have a full WAC buydown program initially after a product
`launches and before formulary decisions are made?
`A.
`Sure. So during that period of time, so product launches
`and the health plan still hasn't made a formulary position,
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 20 of 198
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`6-20
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`they're evaluating the FDA labeling, they're reviewing the
`marketplace, so they haven't made a determination yet. So they
`have a lot of protocols in place for those new medications, and
`they're difficult to attain. So obviously the manufacturers
`launched a product, they're eager to get that drug to patients.
`So this type of program removes that financial hurdle for the
`patient during the time period before the health plan makes a
`formulary determination.
`Q.
`Now, what about for AJOVY, was the length of time that
`Teva had a full WAC buydown program for AJOVY in line with that
`sort of typical expected initial launch period?
`A.
`I don't recall the exact time frame that we had the full
`WAC buydown program at launch, but we had it at launch, and
`then it went away, and then it came back in the 2020 time
`frame.
`Q.
`Can you -- why did it go away and then come back?
`A.
`So it went away from the standpoint that that was the
`initial launch phase, and then -- so there was a normal course
`of business. Came back in this time period of 2020 because
`of -- from the work that we were doing on the market access
`side, the need to improve formulary access. So in order to
`continue the certain level of market share and volume use in
`the market, so that that level of demand is known and supported
`and is a part of the discussions.
`Q.
`So just so I have that straight, why did Teva bring back
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 21 of 198
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`6-21
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`the full WAC buydown program that's so costly after it was
`initially -- went away following the launch period?
`A.
`Sure. So I think a good bullet just to look at on this
`slide on the far right shows: To drive share and volume, AJOVY
`utilizes the full WAC buydown to overcome formulary and UM
`challenges.
`Q.
`So from Teva's perspective, what did Teva need to achieve
`in order to stop paying the full price for its drug using this
`full WAC buydown program?
`A.
`So the objective was improved formulary access behind
`that.
`Q.
`How would achieving formulary access allow Teva to stop
`fronting the full cost and eating that expense so that patients
`could get its drug?
`A.
`Sure. In that situation, then, it goes through normal
`reimbursement process, so it would go through the normal
`reimbursement through the health plan or the PBM, so there
`would not need to be a full WAC buydown for patients.
`Q.
`So how significant was it for Teva that its full WAC
`buydown-denial conversion program you talked about was being
`used at the levels shown what we're looking at here in PTX
`1708?
`A.
`Sure. So back to the graph on the left, this does a nice
`job of just showing for a few different types of accounts the
`level of use of this program.
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 22 of 198
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`6-22
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`So on the far right is UnitedHealthcare. As we spoke
`about yesterday, in that formulary position, AJOVY was
`disadvantaged, it was excluded from formulary and required a
`double step or a trial and failure of the other products before
`receiving it.
`And you can see here, of the prescriptions that came
`through UnitedHealthcare, about 40 percent of them had the
`denial conversion program applied to it. So a large proportion
`of the prescriptions through UnitedHealthcare were using this
`program.
`For OptumRx, the one to the left, AJOVY was
`disadvantaged so it's non-preferred; so not as severe as United
`but disadvantaged required that double step, as we spoke about.
`And you can see, in that situation, about 14 percent of all
`prescriptions used this program. So those are significant.
`This has significant financial liability for Teva to use these
`programs, and these -- was a high use of these programs in
`these accounts.
`Q.
`I'm sorry, do you mind just reminding us what that double
`step you just talked about in the context of AJOVY being
`disadvantaged in OptumRx. What does a double step mean?
`A.
`So double step is where a patient would need to be shown
`that they had a trial and clinical or safety failure of Aimovig
`and Emgality before getting AJOVY.
`Q.
`So thank you for explaining to us what we're looking at in
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 23 of 198
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`6-23
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`terms of the level of use.
`What was the significance to Teva? How did this
`impact Teva, that people were using its full WAC buydown-denial
`conversion program to the extent that you just testified about
`for these accounts?
`A.
`So it wasn't optimal for Teva; it's not the normal course
`of reimbursement. We're applying -- typically, rebates in the
`marketplace is the way to seek normal reimbursement. So by
`Teva taking the full WAC buydown cost was a significant
`financial cost liability for the company.
`Q.
`After all the struggle for AJOVY following Emgality's
`launch, what does the market access on formularies for AJOVY
`look like today?
`A.
`So today, in 2022, the formulary access has improved. We
`have gained formulary access at a few of the accounts we spoke
`about, Prime Therapeutics, OptumRx. It is still disadvantaged
`at UnitedHealthcare. So overall the formulary position has
`improved over time through what we spoke about. A lot of
`increase in the rebates behind that in order to obtain those
`formulary positions.
`Q.
`So what's the cost been to Teva to get that back on those
`formularies where AJOVY was initially disadvantaged or
`excluded?
`A.
`Sure. So the cost is really represented in the level of
`escalating rebates. So in order to obtain a formulary position
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`Case 1:18-cv-12029-ADB Document 628 Filed 12/27/22 Page 24 of 198
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`6-24
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`and change the course of where the PBM's decisions were, Teva
`had to offer significant rebates in order to make a change
`there and convince them to make a change on their formularies.
`Q.
`And regarding those significant rebates, I think you
`testified yesterday that Teva's been giving more than half of
`the price of AJOVY to PBMs and payers on each sale; is that
`right?
`A.
`That's correct.
`Q.
`Could you remind us what that average is today?
`A.
`Oh, sure. So today, I think -- yesterday we reviewed that
`in the second quarter of 2022 the average commercial rebate was
`66 percent for AJOVY.
`Q.
`And, again, that rebate, could you remind us, is that a
`payment that Teva makes to the PBM or health plan on every sale
`of AJOVY?
`A.
`Sure. So if a health plan or PBM puts AJOVY on formulary
`in the agreed position, then Teva would provide a rebate back
`to the PBM for that formulary position.
`Q.
`And so given that, Mr. Mauk, given that Teva is making
`such a high payment to PBMs and payers on every sale of its
`drug, given that, as you just testified, Teva's also buying its
`own drug for patients who don't have coverage, why didn't Teva
`just give up on AJOVY?
`A.
`I think in consideration of what our company's intending
`to do, we represent a lot of different medications in the
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