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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`ARGENTUM PHARMACEUTICALS LLC,
`Petitioner
`
`v.
`
`ALCON RESEARCH, LTD.,
`Patent Owner.
`
`
`Case IPR2017-01053
`U.S. Patent No. 8,268,299
`
`
`
`DECLARATION OF HENRY GRABOWSKI, Ph.D.
`
`
`
`
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`1
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`ALCON 2029
`Argentum Pharm. LLC v. Alcon Research, Ltd.
`Case IPR2017-01053
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`Case IPR2017-01053
`Patent 8,268,299
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`

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`TABLE OF CONTENTS
`
`Introduction ...................................................................................................... 3
`
`I.
`
`A. Qualifications ........................................................................................ 3
`B. Assignment ............................................................................................ 5
`C.
`Summary of Opinions .........................................................................14
`
`II.
`
`Treatment of Glaucoma with Ophthalmic Prostaglandin Analog Drugs ......16
`
`III. TRAVATAN Z® Is a Commercial Success ...................................................20
`
`IV. There Is a Nexus between the Commercial Success of TRAVATAN Z® and
`the Patent at Issue ..........................................................................................26
`
`TRAVATAN Z®’s Patented Features .................................................26
`A.
`B. Alcon’s Promotion of TRAVATAN Z® Is Comparable to That of
`Other Branded Ophthalmic Prostaglandin Analogs ............................30
`
`1. Marketing and Promotional Activities in the Pharmaceutical
`Industry .....................................................................................30
`
`2.
`
`The Extent of Promotional Activities for TRAVATAN Z® .....31
`
`C. Alcon’s Practice of Offering Copayment Coupons for TRAVATAN
`Z® Is Consistent with Practices of Manufacturers of Other Branded
`Ophthalmic Prostaglandin Analogs .....................................................36
`
`1. Manufacturer-Sponsored Copayment Coupon Programs in the
`Pharmaceutical Industry ............................................................36
`
`2.
`
`Copayment Coupons for TRAVATAN Z® and Other
`Prostaglandin Analogs ..............................................................37
`
`D.
`
`TRAVATAN Z®’s Formulary Placement Reflects the Value That
`TRAVATAN Z® Provides to Patients .................................................40
`
`
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`2
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`I, Henry Grabowski, hereby declare as follows:
`
`Introduction
`
`I am over the age of eighteen (18) and otherwise competent to make this
`
`I.
`1.
`
`declaration.
`
`2.
`
`I understand that the Patent Trial and Appeal Board has granted Argentum
`
`Pharmaceuticals LLC’s (“Argentum”) petition to institute this Inter Partes Review
`
`(“IPR”) regarding claims 1–28 of United States Patent No. 8,268,299 (the “’299
`
`patent”) on obviousness grounds.
`
`A. Qualifications
`I am currently Professor Emeritus of Economics and the Director of the
`
`3.
`
`Program in Pharmaceuticals and Health Economics at Duke University. I received
`
`my Bachelor of Science degree in Engineering Physics from Lehigh University in
`
`1962. In 1967, I obtained a doctorate in Economics from Princeton
`
`University. My academic and research specialties are in the pharmaceutical
`
`industry—health economics, economics of innovation, and government regulation.
`
`4.
`
`I have studied the economics of the pharmaceutical industry over much of
`
`my career, and I have published numerous articles and books on this industry. I
`
`created a graduate course at Duke on economics and policy issues in the
`
`pharmaceutical industry. Under a series of grants from the National Science
`
`Foundation, I have examined the economics of pharmaceutical research and
`
`
`
`3
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`development (“R&D”) and the effect of various government policy actions on drug
`
`innovation. I have testified several times before Congressional committees in the
`
`United States on pharmaceutical industry issues. For example, since 1994, I have
`
`testified on issues involving effective patent life and generic competition in
`
`pharmaceuticals, generic biologics, the Clinton Administration’s health reform
`
`legislation, and the federal government’s policy toward children’s vaccines.
`
`5.
`
`I have been an advisor and consultant to the National Academy of Sciences,
`
`Institute of Medicine, Federal Trade Commission, General Accounting Office, and
`
`Office of Technology Assessment. I have also held visiting scholar appointments
`
`at the International Institute of Management in Berlin, Germany, Health Care
`
`Financing Administration in Washington, D.C., the Office of Health Economics in
`
`London, and the Centre for Medicines Research in London. Until its acquisition
`
`by Gilead Sciences in 2003, I served on the Board of Directors of Triangle
`
`Pharmaceuticals, Inc., a development-stage company that specialized in antiviral
`
`drug therapies.
`
`6.
`
`I have done extensive research on the economics of competition in the
`
`pharmaceutical industry, including the role of patents and the importance of
`
`R&D. I have also performed several studies on pharmaceutical R&D costs and
`
`profits. The Congressional Budget Office has used my work in this regard to
`
`analyze the effects of the Drug Price Competition and Patent Term Restoration Act
`
`
`
`4
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`(“Hatch-Waxman Act”) on R&D returns and to analyze the proposed changes
`
`associated with the Health Security Act of 1993.
`
`7.
`
`Exhibit 2030 is a copy of my curriculum vitae, which includes a more
`
`detailed description of my education and professional experience, as well as a list
`
`of my publications from the last forty years.
`
`B. Assignment
`I have been retained by Williams & Connolly LLP on behalf of Alcon
`
`8.
`
`Research, Ltd. (“Alcon”) to serve as an expert witness in this action.
`
`9.
`
`In particular, I have been asked to opine on whether Alcon’s drug,
`
`TRAVATAN Z®, is a commercial success, and if so, to address the factors
`
`underlying its commercial success, including whether there is a nexus between its
`
`commercial success and the features of the claimed invention. I have also been
`
`asked to opine on whether Alcon’s promotional activities for TRAVATAN Z® are
`
`in line with that of other products in the same therapeutic category.
`
`10.
`
`In connection with the opinions and conclusions contained within this
`
`declaration, listed below are the documents that I have reviewed and considered or
`
`created (based on data from IQVIA—formerly IMS Health—and Encuity
`
`Research, which I understand are being provided to Argentum). I have also relied
`
`on my training, my years of experience as an economist, my regular review and
`
`
`
`5
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`Case IPR2017-01053
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`

`knowledge of the economic literature, and presentations at academic and industry
`
`Case IPR201 7-01053
`
`Patent 8,268,299
`
`conferences.
`
`Exhibit
`
`.3
`
`Descri I tion
`
`Petition for Inter Partes Review Under 35 U.S.C. §§ 31 1—3 19 and
`37 C.F.R. § 42.100 Et Se., March 10, 2017
`“Save big on your TRAVATAN Z® Solution prescription,” June
`24, 2008
`“Save big on your TRAVATAN Z® Solution prescription,” April 1,
`2009
`
`“Save up to $20 on your next four prescriptions with this card,”
`March 27, 2010
`“Pay no more than $25 for each 30-day supply of TRAVATAN Z®
`Solution through December 2011,” May 6, 201 1
`“Pay no more than $25 for each 30-day supply of TRAVATAN Z®
`Solution throu h March 2013,” Februa
`10, 2012
`
`“Save up to $1,300 on your Alcon Medication Refills, Pay as little
`as $25 for each 30-day supply of prescribed eyedrops from Alcon
`through December 2013,” June 29, 2013
`OPENINGSTM Patient Su . ort Pro am, March 29, 2014
`OPENINGS® Patient Su :ort Pro 14 am, October 31, 2015
`OPENINGS® Patient Su u .ort Pro 3 am, March 12, 2016
`
`Declaration of Richard K. Parrish, II, MD.
`
`Curriculum Vitae of Henry Grabowski, PhD.
`TRAVATAN Z® and Other Prostaglandin Analog Drugs
`TRAVATAN Z® Wholesale Dollar Sales
`
`N/A
`
`1027
`
`1028
`
`1029
`
`1030
`
`1031
`
`1032
`
`1033
`1034
`1035
`
`2027
`
`2030
`2040
`2041
`
`2042
`
`2043
`2044
`
`2045
`
`2046
`
`2047
`
`2048
`
`
`
`TRAVATAN Z® and Other Prostaglandin Analog Drugs, Share of
`Wholesale Dollar Sales
`
`Number of Prescriptions for TRAVATAN Z®
`TRAVATAN Z® and Other Prostaglandin Analog Drugs, Share of
`Prescri . tions
`
`Number of New Prescri . tions for TRAVATAN Z®
`
`TRAVATAN Z® and Other Prostaglandin Analog Drugs, Share of
`New Prescriptions
`TRAVATAN Z® Unit Sales
`
`TRAVATAN Z® and Other Prostaglandin Analog Drugs, Share of
`Unit Sales
`
`

`

`2049
`
`2050
`2051
`
`2052
`
`2053
`
`2054
`
`2055
`
`2056
`
`2057
`
`2058
`
`2059
`
`2060
`
`2061
`2062
`
`2063
`2064
`
`2065
`
`2066
`
`2067
`
`
`
`TRAVATAN Z®, TRAVATAN®, and LUMIGAN®, Cumulative
`Wholesale Dollar Sales
`Number of Prescriptions for TRAVATAN®
`TRAVATAN Z® and Other Prostaglandin Analog Drugs, Share of
`Voice Excluding Retail Value of Samples
`TRAVATAN Z® and Other Prostaglandin Analog Drugs, Share of
`Voice Including Retail Value of Samples
`TRAVATAN Z®, TRAVATAN®, and LUMIGAN®, Marketing-to-
`Sales Ratio Excluding Retail Value of Samples
`TRAVATAN Z®, TRAVATAN®, and LUMIGAN®, Promotional
`Spending Excluding Retail Value of Samples
`TRAVATAN Z® and Other Prostaglandin Analog Drugs,
`Formulary Placement for Commercial Plans 2017–2018
`TRAVATAN Z® and Other Prostaglandin Analog Drugs,
`Formulary Placement for Commercial Plans 2017–2018
`TRAVATAN Z® and Other Prostaglandin Analog Drugs,
`Formulary Placement for Medicare Plans 2017–2018
`TRAVATAN Z® and Other Prostaglandin Analog Drugs,
`Formulary Placement for Medicare Plans 2017–2018
`“Bibliography of Published Papers and Presentations Using
`QuintilesIMS Information,” QuintilesIMS Institute, May 2017
`U.S. Food and Drug Administration, TRAVATAN Z® NDA
`Approval Letter, September 21, 2006
`Alcon, Inc., Form 20-F 2006
`U.S. Food and Drug Administration, TRAVATAN Z® Label,
`August 2010
`Sucampo Pharmaceuticals Inc., Form 10-K 2014
`Regnier, S. A. and D. B. Ridley, 2015, “Market Watch: Forecasting
`Market Share in the US Pharmaceutical Market,” Nature Reviews
`Drug Discovery, Vol. 14, No. 9, pp. 594–595
`Kalyanaram, G., 2008, “The Order of Entry Effect in Prescription
`(Rx) and Over-the-Counter (OTC) Pharmaceutical Drugs,”
`International Journal of Pharmaceutical and Healthcare
`Marketing, Vol. 2, No. 1, pp. 35–46
`Berndt, E. R., et al., 1995, “Information, Marketing, and Pricing in
`the U.S. Antiulcer Drug Market,” The American Economic Review,
`Vol. 85, No. 2, pp. 100–105
`Berndt, E. R., et al., 2002, “An Analysis of the Diffusion of New
`Antidepressants: Variety, Quality, and Marketing Efforts,” The
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`Journal of Mental Health Policy and Economics, Vol. 5, pp. 3–19
`Schmalensee, R., 1982, “Product Differentiation Advantages of
`Pioneering Brands,” The American Economic Review, Vol. 72, No.
`3, pp. 349–365
`Azoulay, P., 2002, “Do Pharmaceutical Sales Respond to Scientific
`Evidence?” Journal of Economics & Management Strategy, Vol.
`11, No. 4, pp. 551–594
`Iizuka, T., 2004, “What Explains the Use of Direct-to-Consumer
`Advertising of Prescription Drugs?” The Journal of Industrial
`Economics, Vol. 52, No. 3, pp. 349–379
`Leffler, K. B., 1981, “Persuasion or Information? The Economics
`of Prescription Drug Advertising,” Journal of Law and Economics,
`Vol. 24, No. 1, pp. 45–74
`Venkataraman, S. and S. Stremersch, 2007, “The Debate on
`Influencing Doctors’ Decisions: Are Drug Characteristics the
`Missing Link?” Management Science, Vol. 53, No. 11, pp. 1688–
`1701
`Berndt, E. R., 2001, “The U.S. Pharmaceutical Industry: Why
`Major Growth in Times of Cost Containment?” Health Affairs,
`Vol. 20, No. 2, pp. 100–114
`Berndt, E. R., 2002, “Pharmaceuticals in U.S. Health Care:
`Determinants of Quantity and Price,” Journal of Economic
`Perspectives, Vol. 16, No. 4, pp. 45–66
`Coscelli, A. and M. Shum, 2004, “An Empirical Model of Learning
`and Patient Spillovers in New Drug Entry,” Journal of
`Econometrics, Vol. 122, pp. 213–246
`Lakdawalla, D. and T. Philipson, 2012, “Does Intellectual Property
`Restrict Output? An Analysis of Pharmaceutical Markets,” Journal
`of Law and Economics, Vol. 55, No. 1, pp. 151–187
`Ross, J. S. and A. S. Kesselheim, 2013, “Prescription-Drug
`Coupons—No Such Thing as a Free Lunch,” The New England
`Journal of Medicine, Vol. 369, No. 13, pp. 1188–1189
`“Prescription Drug Discount Coupons: Implications for Public and
`Commercial Health Care Plans,” Congressional Research Service,
`November 5, 2015, available at
`https://www.everycrsreport.com/files/20151105_R44264_cc230c6c
`a7301b5df95d1210de9d33ca46c9b64d.pdf
`“Prescription Drug Discount Coupons and Patient Assistance
`Programs (PAPs),” Congressional Research Service, June 15, 2017,
`
`8
`
`2068
`
`2069
`
`2070
`
`2071
`
`2072
`
`2073
`
`2074
`
`2075
`
`2076
`
`2077
`
`2078
`
`2079
`
`
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`available at
`https://www.everycrsreport.com/files/20170615_R44264_1620b32
`a24a5e7e0bd6150be54c139fc134c4ab2.pdf
`Starner, C., et al., 2014, “Specialty Drug Coupons Lower Out-of-
`Pocket Costs and May Improve Adherence at the Risk of
`Increasing Premiums,” Health Affairs, Vol. 33, No. 10, pp. 1761–
`1769
`Shrank, W. H., et al., 2010, “The Epidemiology of Prescriptions
`Abandoned at the Pharmacy,” Annals of Internal Medicine, Vol.
`153, No. 10, pp. 633–640, W-212–213
`Tenaglia, M., 2012, “Copay Cards and Coupons: Letting the Facts
`Get in the Way,” PharmExec.com, available at
`http://www.pharmexec.com/copay-cards-and-coupons-letting-facts-
`get-way?id=&sk=&date=&%0A%09%09%09&pageID=2
`“The Use of Medicines in the United States: Review of 2011,” IMS
`Institute for Healthcare Informatics, April 2012
`PSKW Special Sponsored Section, 2016, “State of the Art:
`Highlights from CBI’s 2016 Formulary, Co-Pay and Access
`Summit,” Pharmaceutical Executive, Vol. 36, No. 6, pp. 14–15
`“Medicines Use and Spending Shifts: A Review of the Use of
`Medicines in the U.S. in 2014,” IMS Institute for Healthcare
`Informatics, April 2015, available at
`https://www.redaccionmedica.com/contenido/images/IIHI_Use_of_
`Medicines Report 2015.pdf
`“Click Here for valuable information and a special $20 Rebate,”
`July 30, 2003, available at
`https://web.archive.org/web/20030730072726/http://www.lumigan.
`com:80/
`“$20 Rebate Offer,” July 25, 2004, available at
`https://web.archive.org/web/20040725093240/http://www.lumigan.
`com:80/tools/rebateform.aspx
`“Save on LUMIGAN®, Save $20 on your next prescription,”
`October 1, 2005, available at
`https://web.archive.org/web/20051001071622/http://lumigan.com:8
`0/
`“If you’re taking LUMIGAN®, and would like a rebate coupon for
`up to $20 off, please click here,” June 16, 2006, available at
`https://web.archive.org/web/20060616100836/http://www.allergan.
`com:80/site/products/consumers/home.asp?id=lumigan
`
`9
`
`2080
`
`2081
`
`2082
`
`2083
`
`2084
`
`2085
`
`2086
`
`2087
`
`2088
`
`2089
`
`
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`Case IPR2017-01053
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`2090
`
`2091
`
`2092
`
`2093
`
`2094
`
`2095
`
`2096
`
`2097
`
`2098
`
`2099
`
`
`
`“Save on LUMIGAN®, Save $20 on your next prescription,” June
`13, 2007, available at
`https://web.archive.org/web/20070613153631/http://www.lumigan.
`com:80/
`“Save on LUMIGAN®, Save $20 on your next prescription,”
`August 14, 2008, available at
`https://web.archive.org/web/20080814171216/http://www.lumigan.
`com:80/
`“Save on LUMIGAN®, Save $20 on your next prescription,” June
`27, 2009, available at
`https://web.archive.org/web/20090627083643/http://www.lumigan.
`com:80/
`“Sign Up for Savings and Helpful E-mail Updates,” June 23, 2010,
`available at
`https://web.archive.org/web/20100623235100/http://www.lumigan.
`com:80/Offers/Default.aspx
`“Sign Up for Savings and Helpful E-mail Updates,” September 15,
`2011, available at
`https://web.archive.org/web/20110915021341/http://www.lumigan.
`com:80/Offers/Default.aspx
`“Sign Up for Savings and Helpful E-mail Updates,” August 30,
`2011, available at
`https://web.archive.org/web/20110830041856/http://www.lumigan.
`com:80/Offers/Offer01.aspx
`“Allergan, the maker of LUMIGAN® 0.01% ophthalmic solution,
`is offering a valuable rebate,” August 5, 2012, available at
`https://web.archive.org/web/20120805082203/http://www.lumigan.
`com:80/Offers/Default.aspx
`“Allergan, the maker of LUMIGAN® 0.01% ophthalmic solution,
`is offering a valuable rebate,” June 6, 2013, available at
`https://web.archive.org/web/20130606060651/http://www.lumigan.
`com:80/offers/default.aspx
`“Allergan, the maker of LUMIGAN® 0.01% ophthalmic solution,
`is offering a valuable rebate,” June 27, 2014, available at
`https://web.archive.org/web/20140627221626/http://www.lumigan.
`com:80/Offers/Default.aspx
`“Save up to $25 instantly on your next LUMIGAN® 0.01%
`prescription,” April 17, 2015, available at
`https://web.archive.org/web/20150417201847/http://www.lumigan.
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`com:80/Save-Prescription/Coupon
`“Save up to $25 instantly on your next LUMIGAN® 0.01%
`prescription,” August 15, 2016, available at
`https://web.archive.org/web/20160815103712/http://www.lumigan.
`com:80/Save-Prescription/Coupon
`“Save up to $25 instantly on your next LUMIGAN® 0.01%
`prescription,” May 14, 2017, available at
`https://web.archive.org/web/20170514083605/http://www.lumigan.
`com:80/Save-Prescription/Coupon
`“Join Vision Matters™,” January 11, 2010, available at
`https://web.archive.org/web/20100111030643/http://www.xalatan.c
`om:80/vision-matters/index.aspx
`“Save on Xalatan,” August 9, 2011, available at
`https://web.archive.org/web/20110809113336/http://www.xalatan.c
`om:80/savings/index.aspx
`“Now that you know about the cost savings available for brand-
`name XALATAN, learn how XALATAN can help reduce high eye
`pressure,” May 25, 2013, available at
`https://web.archive.org/web/20130525073522/http://www.xalatan.c
`om:80/content/index.aspx
`“You May Save Up to $75 Per Month With the XALATAN
`Savings Card!” February 14, 2015, available at
`https://web.archive.org/web/20150214082124/http://xalatan.com//
`“Request or Activate Your XALATAN Savings Card Today,”
`December 13, 2017, available at https://www.xalatan.com/xalatan-
`savings
`OPENINGS® Patient Support Program, December 13, 2017,
`available at http://www.myglaucomasupport.com/get-support.shtml
`Employer Health Benefits 2016 Annual Survey, Kaiser Family
`Foundation and Health Research & Educational Trust, 2016
`Berndt, E. R. and J. P. Newhouse, 2012, “Pricing and
`Reimbursement in US Pharmaceutical Markets,” in The Oxford
`Handbook of the Economics of the Biopharmaceutical Industry, P.
`M. Danzon and S. Nicholson, eds. (New York, NY: Oxford
`University Press), pp. 201–265
`“Drug Safety Alerts: Alcon Announces Discontinuation of
`Travatan Solution,” CVS/Caremark, available at
`https://www.caremark.com/wps/portal/!ut/p/c4/04_SB8K8xLLM9
`MSSzPy8xBz9CP0os3gnC3NzC-
`
`11
`
`2100
`
`2101
`
`2102
`
`2103
`
`2104
`
`2105
`
`2106
`
`2107
`
`2108
`
`2109
`
`2110
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`8gw9CQMGdLA09f1xBP4xBHYwMTU_2CbEdFAJ-
`2JFw!/?cms=CMS-PWCM-2024242
`“Drug Safety Alerts: Allergan Announces Discontinuation of
`Lumigan® 0.03%,” CVS/Caremark, available at
`https://www.caremark.com/wps/portal/!ut/p/c4/04_SB8K8xLLM9
`MSSzPy8xBz9CP0os3gnC3NzC-
`8gw9CQMGdLA09f1xBP4xBHYwMTU_2CbEdFAJ-
`2JFw!/?cms=CMS-PWCM-2036092
`“Orange Book: Approved Drugs Products with Therapeutic
`Equivalence Evaluations,” U.S. Food and Drug Administration,
`available at https://www.accessdata.fda.gov/scripts/cder/ob/
`“Orange Book: Approved Drug Products with Therapeutic
`Equivalence Evaluations, Bimatoprost,” U.S. Food and Drug
`Administration
`“Orange Book: Approved Drug Products with Therapeutic
`Equivalence Evaluations, Latanoprost,” U.S. Food and Drug
`Administration
`“Orange Book: Approved Drug Products with Therapeutic
`Equivalence Evaluations, Travoprost,” U.S. Food and Drug
`Administration
`Allergan Inc., Form 10-K 2010
`Sucampo Pharmaceuticals Inc., Form 10-K 2013
`“Consumer Price Index for All Urban Consumers: All Items,”
`Federal Reserve Economic Data, available at
`https://fred.stlouisfed.org/series/CPIAUCSL
`“Formulary Lookup for Commercial Plans,” Decision Resources
`Group, available at https://lookup.decisionresourcesgroup.com/
`“Formulary Lookup for Medicare Plans,” Decision Resources
`Group, available at https://lookup.decisionresourcesgroup.com/
`Data from IQVIA (being produced to Argentum)
`
`Data from Encuity Research (being produced to Argentum)
`“QuintilesIMS is now IQVIA,” The New York Times, November 7,
`2017, available at
`http://markets.on.nytimes.com/research/stocks/news/press_release.
`asp?docTag=201711061553BIZWIRE_USPRX____BW6358&fee
`dID=600&press_symbol=57666736
`“Encuity Research,” available at www.encuity.com
`
`12
`
`2111
`
`2112
`
`2113
`
`2114
`
`2115
`
`2116
`2117
`2118
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`2119
`
`2120
`
`N/A
`N/A
`N/A
`
`N/A
`
`
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`11. Exhibits 2041 through 2050 contain summaries of voluminous data
`
`concerning sales, units, and prescriptions from IQVIA. I understand that the data
`
`underlying these exhibits will be produced to Argentum. IQVIA is a leading
`
`provider of information on the pharmaceutical and healthcare industry.1 IQVIA
`
`data are relied upon extensively by pharmaceutical industry professionals,
`
`government agencies, and researchers to determine drug sales, prescriptions, and
`
`promotional expenditures.2
`
`12. Exhibits 2051 through 2054 contain a summary of voluminous data from
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`Encuity Research (and, with respect to Exhibit 2053, IQVIA). I understand that
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`the data underlying these exhibits will be produced to Argentum. Pharmaceutical
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`industry professionals and researchers routinely rely on Encuity Research data to
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`determine promotional activity.3
`
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`1 See “QuintilesIMS is now IQVIA,” The New York Times, November 7, 2017
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`(http://markets.on.nytimes.com/research/stocks/news/press_release.asp?docTag=2
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`01711061553BIZWIRE_USPRX____BW6358&feedID=600&press_symbol=576
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`66736).
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`2 See Ex. 2059.
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`3 See www.encuity.com.
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`13.
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`I am being compensated for my time and services at my regular hourly rate
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`of $800. I will also be reimbursed for my expenses. I have been assisted in this
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`matter by staff of Cornerstone Research, who worked under my direction. I
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`receive compensation from Cornerstone Research based on its collected staff
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`billings for its support of me in this matter. Neither my compensation in this
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`matter nor my compensation from Cornerstone Research is in any way contingent
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`or based on the content of my opinion or the outcome of this or any other matter.
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`Summary of Opinions
`
`C.
`14. Based on my research and analyses summarized in this declaration, I
`
`conclude that TRAVATAN Z® has achieved commercial success in the U.S. I also
`
`conclude that there is a nexus between the commercial success of TRAVATAN Z®
`
`and its characteristics that embody inventions claimed by the patent at issue.
`
`15. The success of TRAVATAN Z® is demonstrated by its levels of and growth
`
`in dollar sales, units, prescriptions, and share in the United States. According to
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`IQVIA data, since its launch in October 2006 through October 2017, TRAVATAN
`
`Z® has been prescribed
`
` times in the United States. Over this time
`
`period, the cumulative dollar sales of TRAVATAN Z® were
`
`. The
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`success of TRAVATAN Z® is further evidenced by the fact that it has quickly
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`become one of the best-selling and most-prescribed drugs in its therapeutic
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`category and maintained a prominent position despite having to compete with
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`alternative treatment options, including generic drugs.
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`16.
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`I understand that the claims of the ’299 patent at issue here describe self-
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`preserved aqueous compositions, and in particular, cover compositions with a
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`preservative system that is used by TRAVATAN Z® but not by any competing
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`drug. The commercial success of TRAVATAN Z® is explained by what I
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`understand to be the benefits of the claimed compositions with this preservative
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`system as compared to other drug formulations that use conventional preservatives
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`and are thus more likely to lead to ocular surface damage. This is demonstrated by
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`the fact that TRAVATAN Z® has outperformed its predecessor drug,
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`TRAVATAN®, which I understand was not self-preserved and did not use the
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`claimed invention. This is further demonstrated by the fact that TRAVATAN Z®
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`has continued to be a commercial success despite the availability of other
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`therapeutic alternatives, which I understand are similarly efficacious and at least
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`some of which can be purchased at lower cost, but are also not self-preserved and
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`do not use the claimed invention. Based on this and other evidence, it is my
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`opinion that there is a nexus between the commercial success of TRAVATAN Z®
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`and the claimed invention.
`
`17.
`
`In determining whether there is a nexus between TRAVATAN Z®’s
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`commercial success and the claimed invention, I have also evaluated whether the
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`drug’s commercial success could be attributed to other factors, such as excessive
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`promotion. In my opinion, TRAVATAN Z®’s commercial success has not been
`
`the result of excessive marketing or the provision of coupons to patients. The
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`extent of marketing expenditures for TRAVATAN Z® is consistent with that of
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`other competing products, especially considering that TRAVATAN Z® was
`
`launched in a crowded market where other available treatment options had been
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`promoted for many years prior to TRAVATAN Z®’s launch. Similarly, the extent
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`to which Alcon has been offering copayment coupons to patients for TRAVATAN
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`Z® is comparable to that of manufacturers selling other drugs in the same
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`therapeutic category. Further, copayment coupons are unlikely to drive the
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`demand for TRAVATAN Z® since a large number of TRAVATAN Z® patients are
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`prohibited from using such coupons.
`
`II.
`18.
`
`Treatment of Glaucoma with Ophthalmic Prostaglandin Analog Drugs
`
`I have reviewed the declaration of Dr. Richard Parrish and rely on his
`
`opinions herein. Based on my review of his declaration, I understand that open-
`
`angle glaucoma is a disease characterized by chronic, progressive damage to the
`
`optic nerve, usually associated with elevated intraocular pressure (“IOP”). I also
`
`understand that the prevalence of glaucoma is directly related to age—as
`
`individuals age, they are more likely to develop glaucoma.
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`19.
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`I understand that the most common type of medication used to treat
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`glaucoma patients with elevated IOP are a class of drugs known as prostaglandin
`
`analogs (“PGAs”). TRAVATAN Z® (travoprost) was approved by the U.S. Food
`
`and Drug Administration (“FDA”) on September 21, 2006.4 I understand that
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`TRAVATAN Z® is a PGA. Alcon launched TRAVATAN Z® in October 2006.5
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`TRAVATAN Z® is indicated for the “reduction of elevated intraocular pressure in
`
`patients with open angle glaucoma or ocular hypertension.”6
`
`20. According to Dr. Parrish, the PGAs available in 2006 in the U.S. included
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`TRAVATAN® (travoprost), XALATAN® (latanoprost), and LUMIGAN® 0.03%
`
`(bimatoprost). In addition to TRAVATAN Z®, branded PGAs available today
`
`include: XALATAN®, LUMIGAN® (reformulated as 0.01%), and ZIOPTAN®
`
`(tafluprost). Generic latanoprost, bimatoprost (0.03%), and travoprost are also
`
`now available. I understand from counsel that generic travoprost became available
`
`in 2013. I understand from Dr. Parrish that TRAVATAN Z® is a successor product
`
`
`4 Ex. 2060.
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`5 Ex. 2061, 53.
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`6 Ex. 2062.
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`to TRAVATAN®: it has the same active ingredient (travoprost), but a different
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`preservative system. Exhibit 2040 summarizes the various PGAs on the market.7
`
`21. My understanding from Dr. Parrish is that although other, non-PGA
`
`treatments are available for the long-term treatment of glaucoma, they are not
`
`comparable to PGAs, are not considered to be therapeutic alternatives to
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`TRAVATAN Z®, are generally not as efficacious as PGAs in lowering IOP, and
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`are generally prescribed with far less frequency than PGAs. I understand that these
`
`categories of drugs include beta-blockers, alpha-2 agonists, topical carbonic
`
`anhydrase inhibitors, and combination drugs. For purposes of this report and in
`
`accordance with Dr. Parrish’s opinion, I have analyzed TRAVATAN Z®’s
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`performance as compared to that of other PGAs approved for treatment of open-
`
`angle glaucoma and ocular hypertension.
`
`
`7 Based on Dr. Parrish’s declaration, it is my understanding that ZIOPTAN™ is
`
`not a comparable drug to the other PGAs. I further understand that RESCULA® is
`
`a prostanoid, and while it has some characteristics which are similar to PGAs, it is
`
`not technically a PGA. Further, RESCULA® was discontinued in early 2015. (Ex.
`
`2063, 39.) In this declaration, I have considered all the drugs listed in Exhibit
`
`2040, including ZIOPTAN™ and RESCULA®. However, excluding these two
`
`drugs from my analysis would not affect my conclusions.
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`22. Based on my review of Dr. Parrish’s declaration, I understand that all the
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`PGAs currently on the market—including TRAVATAN Z®, XALATAN®,
`
`LUMIGAN®, and generic latanoprost, travoprost, and bimatoprost—are similar in
`
`efficacy at treating elevated IOP. I further understand that except for TRAVATAN
`
`Z®, all of these drugs contain benzalkonium chloride (“BAK”) as a preservative.8
`
`23. According to Dr. Parrish, the long-term use of BAK exacerbates the
`
`symptoms associated with various forms of ocular surface disease (“OSD”). I
`
`understand that OSD is a significant concern among clinicians, and that for patients
`
`with OSD symptoms, the use of ophthalmic formulations without BAK is
`
`preferred. I understand that because TRAVATAN Z® does not contain BAK, it has
`
`a less toxic effect on the ocular surface, leading to decreased incidence of
`
`symptoms of OSD among patients taking TRAVATAN Z® in comparison to
`
`patients taking other PGAs. Per Dr. Parrish, I understand that even though
`
`TRAVATAN Z® is more expensive than some other medical treatment options, it
`
`is a first-line treatment for glaucoma patients with symptoms of OSD because it
`
`has reduced potential for exacerbation of those symptoms.
`
`
`8 I understand from counsel that the absence of BAK from TRAVATAN Z®’s
`
`formulation is a result of its use of the claimed invention.
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`III. TRAVATAN Z® Is a Commercial Success
`24. There are several indicators that can be used to determine whether a product
`
`has achieved commercial success. The indicators for the success of a patented
`
`drug product include levels of and growth trends in dollar sales, prescriptions, and
`
`units of the product, as well as its performance relative to competing products
`
`(typically measured in terms of share of sales, prescriptions, or units). A product
`
`does not have to satisfy all of these indicators to be considered commercially
`
`successful. Rather, each indicator can demonstrate the commercial success of the
`
`product, either alone or in conjunction with other indicators.
`
`25. My analyses below demonstrate that TRAVATAN Z® is a commercially
`
`successful drug. Since its launch in 2006 through October 2017, TRAVATAN Z®
`
`has been prescribed
`
` times in the United States. Over this time period,
`
`the cumulative dollar sales of TRAVATAN Z® were
`
`.
`
`26. Exhibit 2041 graphs annual U.S. wholesale dollar sales for TRAVATAN Z®.
`
`TRAVATAN Z® reached sales of almost
`
` in 2007, its first full calendar
`
`year on the market. TRAVATAN Z®’s sales generally increased over the
`
`following years, approaching
`
` in 2016, the last full calendar year for
`
`which data are available. The level of sales in 2016 represents an approximately
`
`-fold increase over the sales in 2007 and translates into an annual growth rate of
`
` percent over this period. The data for the first ten months of 2017 indicate a
`
`
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`similarly strong performance in the current year. TRAVATAN Z® demonstrated
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`this strong sales performance despite being a late entrant in its therapeutic category
`
`and facing competition not only from other branded PGAs, including prior entrants
`
`XALATAN®, LUMIGAN®, and TRAVATAN®, but also from generic latanoprost,
`