(AMI-l
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`Page 121
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`DEFOREST MCDUFF, Ph.D.
`
`associated with that.
`
`Q.
`
`A.
`
`What are those advantages?
`
`The advantages with respect to
`
`competition. Customer recognition is a good
`
`thing for competition in the market.
`
`Q.
`
`So basically if you are the
`
`first on the market, everyone knows about --
`
`strike that.
`
`If you are the first on the
`
`market, you are the only drug that people know
`
`about, and you have no competition, right, for
`
`that specific treatment?
`
`A.
`
`For the period of time where
`
`you are the only product on the market. Of
`
`course, you would still call something a first
`
`mover once additional competition comes on to
`
`the market.
`
`Q.
`
`Would you agree that a second
`
`market entrant in the same market segment may
`
`face a greater challenge to gain market share?
`
`A.
`
`That may be true.
`
`It depends
`
`on the situation.
`
`Sometimes a second mover can
`
`have the advantage that a certain type of
`
`
`
`therapy or practice has been established, and
`
`
`800-642-1099
`
`A Veritext Company
`
`ww.veritext.com
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`
`UNITED THERAPEUTICS, EX. 2035
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`
`Page1210f297
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`Page 121
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`DEFOREST MCDUFF, Ph.D.
`
`associated with that.
`
`Q.
`
`A.
`
`What are those advantages?
`
`The advantages with respect to
`
`competition. Customer recognition is a good
`
`thing for competition in the market.
`
`Q.
`
`So basically if you are the
`
`first on the market, everyone knows about --
`
`strike that.
`
`If you are the first on the
`
`market, you are the only drug that people know
`
`about, and you have no competition, right, for
`
`that specific treatment?
`
`A.
`
`For the period of time where
`
`you are the only product on the market. Of
`
`course, you would still call something a first
`
`mover once additional competition comes on to
`
`the market.
`
`Q.
`
`Would you agree that a second
`
`market entrant in the same market segment may
`
`face a greater challenge to gain market share?
`
`A.
`
`That may be true.
`
`It depends
`
`on the situation.
`
`Sometimes a second mover can
`
`have the advantage that a certain type of
`
`
`
`therapy or practice has been established, and
`
`
`800-642-1099
`
`A Veritext Company
`
`ww.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1210f297
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`DEFOREST MCDUFF, Ph.D.
`
`they benefit positively from that.
`
`So it just
`
`depends on the situation.
`
`was
`
`the case in this case?
`
`Did you look to see if that
`
`It would be odd for me to draw
`
`Q.
`
`A.
`
`I am not sure what you mean.
`
`I am aware that Venativs was launched before
`
`Tyvaso if that's what you mean.
`
`Q.
`
`You don't provide any opinions
`
`about whether it was an advantage or
`
`disadvantage for Tyvaso to be the second market
`
`entrant into inhaled treatment for pulmonary
`
`hypertension, correct?
`
`A.
`
`I don't view that as the
`
`correct market definition.
`
`I wouldn‘t call
`
`Tyvaso the second market entrant here.
`
`Q.
`
`Well, assume for this question
`
`I am just talking about the inhaled pulmonary
`
`hypertension treatments as a market. You don't
`
`provide any opinion about the fact that Tyvaso
`
`was
`
`the second market entrant in that same
`
`market, correct?
`
`A.
`
`an opinion on a market that I don't think is
`
`correct or relevant, but I agree that I don't
`
`
`800-642-1099
`
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`
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`DEFOREST MCDUFF, Ph.D.
`
`focus on order of market entry between Tyvaso
`
`and Venativs.
`
`I don't view it as particularly
`
`impactful here.
`
`Q.
`
`And you agree that Tyvaso has
`
`performed better over time than Venativs in
`
`terms of sales, correct?
`
`A.
`
`Q.
`
`It has had greater sales, yes.
`
`Now, moving to the other
`
`pulmonary hypertension drugs that are not
`
`inhaled that you included in your market
`
`definition, earlier we also discussed there are
`
`different stages of pulmonary arterial
`
`hypertension, correct?
`
`A.
`
`Groups I think they are
`
`typically referred to.
`
`Is that what you mean?
`
`Q.
`
`Yes, or -— well, actually
`
`let's just -- if you look at the Venativs
`
`label, for example, Exhibit 1160, under
`
`Indications and Usage,
`
`the last sentence says:
`
`"Studies establishing effectiveness included
`
`predominantly patients with NYHA Functional
`
`Class III to IV symptoms and etiologies of
`
`idiopathic or heritable pulmonary arterial
`
`
`
`hypertension or pulmonary arterial hypertension
`
`
`800-642-1099
`
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`
`Page1230f297
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`Page 124
`
`DEFOREST MCDUFF, Ph.D.
`
`associated with connective tissue diseases."
`
`A.
`
`Q.
`
`Do you see that?
`
`Yes.
`
`So there's a couple things
`
`here.
`
`So —- well, first, do you have an
`
`understanding of what NYHA Functional Class
`
`symptoms are?
`
`A.
`
`I presume they are just a
`
`description of symptoms associated with the
`
`disease.
`
`Q.
`
`Are you aware that there‘s
`
`four classes of symptoms under that?
`
`A.
`
`Q.
`
`That sounds right.
`
`Is it your understanding that
`
`each class of symptoms -— strike that.
`
`Is it your understanding that
`
`pulmonary hypertension is a progressive
`
`disease?
`
`A.
`
`That sounds familiar.
`
`I don't
`
`recall specifically addressing that in my
`
`declaration.
`
`Q.
`
`Is it your understanding that
`
`the class symptoms increase as the disease
`
`
`
`progresses?
`
`
`800-642-1099
`
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`Page 125
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`DEFOREST MCDUFF, Ph.D.
`
`A.
`
`That's consistent with my
`
`experience.
`
`Q.
`
`And so, for example, a patient
`
`with Class I symptoms may be treated
`
`differently than a patient with Class IV
`
`symptoms, correct?
`
`A.
`
`That may be true.
`
`It's not
`
`something I have specifically evaluated in my
`
`declaration or opined about.
`
`Q.
`
`So you don't know if patients
`
`with different class symptoms are treated
`
`differently with different medications?
`
`A.
`
`There may be some nuances with
`
`respect to treatment.
`
`Some options may be more
`
`effective for patients at various difference
`
`classes.
`
`It's not a distinction that was in
`
`the evidence when evaluating the relevant
`
`market.
`
`So it's not something that I focused
`
`on.
`
`Q.
`
`You have said it's not in the
`
`evidence that you evaluated?
`
`A.
`
`Q.
`
`Yes.
`
`If you turn to your
`
`
`
`declaration Exhibit 1055 for the '50? patent
`
`
`800-642-1099
`
`A Veritext Company
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`Page 126
`
`DEFOREST MCDUFF, Ph.D.
`
`with the exhibits attached, and if you look at
`
`Attachment B-8 Competing PAH Therapies.
`
`A.
`
`Q.
`
`Yes.
`
`So, for example,
`
`the first
`
`drug Remodulin lists effectiveness for patients
`
`with Class II to IV symptoms.
`
`A.
`
`Q.
`
`Do you see that?
`
`Yes.
`
`And Tyvaso is only listed for
`
`patients with Class III symptoms, correct?
`
`A.
`
`Q.
`
`Yes.
`
`Adcirca is for patients with
`
`Class II to III symptoms, correct?
`
`A.
`
`Q.
`
`I see that, yes.
`
`So without going through all
`
`of these, each of these drugs have their own
`
`uses in terms of patients with certain types of
`
`symptoms -— strike that.
`
`Each of these drugs are used
`
`for patients with certain types of symptoms,
`
`correct?
`
`A.
`
`Yes,
`
`the indications are not
`
`identical.
`
`They all relate to pulmonary
`
`
`
`arterial hypertension.
`Tyvaso has a narrower
`
`
`800-642-1099
`
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`Page1260f297
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`Page 127
`
`DEFOREST MCDUFF, Ph.D.
`
`label.
`
`In other words, it's useful in fewer
`
`patients, and so it's a more limited commercial
`
`opportunity.
`
`Q.
`
`Did you account for the fact
`
`that other pulmonary hypertension drugs were
`
`listed for patients with wider variety of
`
`symptoms?
`
`A.
`
`Yes, that's reflected in the
`
`sales data where a product that has
`
`applicability to a wider set of patients
`
`because of a broader or narrower indication is
`
`able to achieve more sales.
`
`So comparison of
`
`sales is where that is manifested in the
`
`economic data.
`
`Q.
`
`If a drug is only used to
`
`treat specific symptoms, isn't it fair to
`
`compare only other drugs that treat those same
`
`symptoms?
`
`MR. MATHAS: Object
`
`to the form.
`
`BY THE WITNESS:
`
`A.
`
`No, not in my opinion. That's
`
`not correct here.
`
`BY MR. DELAFIELD:
`
`
`
`Why is that?
`Q.
`
`
`800-642-1099
`
`A Veritext Company
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`Page1270f297
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`DEFOREST MCDUFF, Ph.D.
`
`A.
`
`Because that's the incorrect
`
`Page 128
`
`way to think about competition here.
`
`They
`
`have
`
`-— there are a number of products
`
`competing for PAH sales, and they have
`
`different attributes and different coverage and
`
`different effectiveness, but it's the broader
`
`competition that tells you about the market
`
`opportunity for treating pulmonary arterial
`
`hypertension. Drug submarkets or segments with
`
`respect to symptoms is not something that‘s
`
`appropriate or consistent with what I have
`
`reviewed.
`
`THE WITNESS: And we have been
`
`going for a while. Maybe at some point we
`
`should break for lunch.
`
`MR. DELAFIELD:
`
`Do you have lunch
`
`here yet?
`
`break.
`
`MR. MATHAS:
`
`It should be here.
`
`MR. DELAFIELD: Yeah, we can take a
`
`THE VIDEOGRAPHER:
`
`The time is now
`
`12:35 p.m. This is the end of media 2. We are
`
`off the record.
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`
`A Veritext Company
`
`ww.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
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`Page 129
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`DEFOREST MCDUFF, Ph.D.
`
`(WHEREUPON, a recess was had at
`
`12:35 p.m. until 1:26 p.m.)
`
`THE VIDEOGRAPHER:
`
`The time is now
`
`1:26 p.m. This is the beginning of media 3.
`
`We are back on the record.
`
`BY MR. DELAFIELD:
`
`Q.
`
`A.
`
`Q.
`
`Welcome back.
`
`Thank you.
`
`I think when we left, we were
`
`talking about your declaration Exhibit 1055 for
`
`the '507 patent and Attachment B-8, and we were
`
`discussing how these different drugs have
`
`different indications depending on what
`
`symptoms they treat, correct?
`
`A.
`
`Q.
`
`Yes,
`
`I recall that.
`
`If you look at page 10 at
`
`Adempas, and in the -- under Indication the
`
`first bullet point says:
`
`"Persistent/recurrent
`
`Chronic Thromboembolic Pulmonary Hypertension
`
`after surgical treatment or inoperable (CTEPH)
`
`to improve exercise capacity and WHO functional
`
`class."
`
`Do you see that?
`
`
`
`A.
`Yes.
`
`
`800-642-1099
`
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`
`Page1290f297
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`Page 130
`
`DEFOREST MCDUFF, Ph.D.
`
`Q.
`
`And then separately it's also
`
`indicated for pulmonary arterial hypertension
`
`to improve exercise capacity,
`
`improve WHO
`
`functional class and to delay clinical
`
`worsening.
`
`A.
`
`Q.
`
`Do you see that?
`
`Yes.
`
`So just as an example, Adempas
`
`is specifically prescribed for chronic
`
`thromboembolic pulmonary hypertension, correct?
`
`MR. MATHAS: Object to the form.
`
`BY THE WITNESS:
`
`A.
`
`That's part of the indication.
`
`BY MR. DELAFIELD:
`
`Q.
`
`And Tyvaso is not prescribed
`
`for that purpose, correct?
`
`A.
`
`It's not indicated for that,
`
`that's right.
`
`Q.
`
`So at least for patients with
`
`chronic thromboembolic pulmonary hypertension,
`
`Tyvaso doesn't compete in the same market as
`
`Adempas for that condition, correct?
`
`MR. MATHAS: Object
`
`to the form.
`
`
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`800-642-1099
`
`A Veritext Company
`
`www.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1300f297
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`Page 131
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`DEFOREST MCDUFF, Ph.D.
`
`BY THE WITNESS:
`
`A.
`
`I haven't seen evidence that
`
`Tyvaso is prescribed for that.
`
`I haven‘t seen
`
`evidence of it.
`
`I have not specifically
`
`evaluated it, though.
`
`BY MR. DELAFIELD:
`
`Q.
`
`But you didn't account for the
`
`differences in the indications for these drugs
`
`being different than Tyvaso in your analysis of
`
`the sales and revenue, correct?
`
`A.
`
`I don't agree with that.
`
`The
`
`differences in the indications are reflected in
`
`the sales data.
`
`So if one drug has a slightly
`
`more effective indication than another drug,
`
`perhaps that drug has more sales.
`
`So it's one
`
`of the inputs that is reflected in the economic
`
`data.
`
`Q.
`
`Well, I am talking about
`
`indications not effectiveness.
`
`For example, if
`
`a drug is indicated to treat three different
`
`things —— strike that.
`
`In your opinion if drug A is
`
`indicated to treat three conditions and drug B
`
`
`
`is indicated to treat just one of those three
`
`
`800-642-1099
`
`A Veritext Company
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`
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`Page1310f297
`
`
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`Page 132
`
`DEFOREST MCDUFF, Ph.D.
`
`conditions, would you say it's fair to compare
`
`sales -- total sales of both drugs to each
`
`other?
`
`A.
`
`Q.
`
`A.
`
`It depends on one‘s purpose.
`
`What do you mean by that?
`
`Perhaps it would be fair in
`
`some context but not fair in other context.
`
`Q.
`
`Well,
`
`in this context there's
`
`no indication that Tyvaso is used to treat
`
`CTEPH, correct?
`
`MR. MATHAS: Object to form.
`
`BY THE WITNESS:
`
`A.
`
`That's my understanding, yes.
`
`BY MR. DELAFIELD:
`
`Q.
`
`So sales of the Adempas to
`
`treat that form of pulmonary hypertension do
`
`not directly compete with sales of Tyvaso,
`
`correct?
`
`A.
`
`Again,
`
`I haven't seen evidence
`
`that Tyvaso is prescribed for chronic
`
`thromboembolic pulmonary hypertension.
`
`Perhaps
`
`they don't compete for those prescriptions.
`
`Looking through the rest of 3—8 and the other
`
`
`
`one,
`two,
`three -— 13 products here,
`I don't
`
`
`800-642-1099
`
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`UNITED THERAPEUTICS, EX. 2035
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`Page 133
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`DEFOREST MCDUFF, Ph.D.
`
`see that as being a pervasive issue.
`
`It looks
`
`specific to Adempas but none of the other
`
`products on this list.
`
`So while that may be
`
`true for Adempas,
`
`I don't view this to be an
`
`impactful issue.
`
`Q.
`
`Other than the separate
`
`indication, each drug does have slightly
`
`different functional class Symptoms that they
`
`are designed to treat, correct?
`
`MR. MATHAS: Object
`
`to the form.
`
`BY THE WITNESS:
`
`A.
`
`Some may be the same, but
`
`there are frequently slight differences. Yes,
`
`I agree.
`
`BY MR. DELAFIELD:
`
`Q.
`
`Are you aware that patients
`
`taking -- strike that.
`
`Are you familiar with
`
`Remodulin?
`
`A.
`
`Q.
`
`Yes.
`
`And Remodulin is taken via IV
`
`or subcutaneous, correct?
`
`A.
`
`Yes.
`
`
`
`Do you understand that
`Q.
`
`
`800-642-1099
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`DEFOREST MCDUFF, Ph.D.
`
`Remodulin is primarily reserved for patients
`
`with pulmonary hypertension that is an advanced
`
`stage of pulmonary hypertension?
`
`MR. MATHAS: Object
`
`to the form.
`
`BY THE WITNESS:
`
`A.
`
`I don't see that here in
`
`Attachment B-8.
`
`It appears to be approved for
`
`Classes II to IV symptoms.
`
`I don't recall
`
`whether it‘s reserved for advanced stage
`
`sitting here.
`
`BY MR. DELAFIELD:
`
`Q.
`
`Let me ask it another way.
`
`Can all patients with PAH use inhaled
`
`formulations?
`
`patient.
`
`A.
`
`Q.
`
`It probably depends on the
`
`Well,
`
`I am asking if a patient
`
`has pulmonary arterial hypertension, can they
`
`use Tyvaso to help alleviate their symptoms no
`
`matter what their symptoms are or how severe
`
`their pulmonary hypertension is?
`
`MR. MATHAS: Object
`
`to the form.
`
`BY THE WITNESS:
`
`
`
`They may be able to. There
`A.
`
`
`800-642-1099
`
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`Page 135
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`DEFOREST MCDUFF, Ph.D.
`
`may be varying effectiveness of certain
`
`medications on certain types of patients.
`
`Physicians evaluate that on a case-by-case
`
`basis. That's my understanding.
`
`BY MR. DELAFIELD:
`
`Q.
`
`Did you attempt to
`
`differentiate the different forms of the drugs
`
`in terms of when and how they are used with
`
`patients?
`
`A.
`
`I am aware of the different
`
`forms.
`
`You can see that in the Form column on
`
`Attachment B-8.
`
`So I am aware of those
`
`differences across products.
`
`Q.
`
`I guess I am trying to
`
`understand your basis for your opinion that all
`
`forms equally compete against Tyvaso for
`
`treatment of pulmonary arterial hypertension.
`
`I guess my question is if a
`
`patient can't use a specific form of therapy,
`
`it's not a choice to use one pulmonary
`
`hypertension therapy over another, correct?
`
`A.
`
`I am not sure I follow the
`
`question. Could you ask it again?
`
`
`
`So let's take, for example, a
`Q.
`
`
`800-642-1099
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`Page 136
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`DEFOREST MCDUFF, Ph.D.
`
`patient takes Orenitram which is an oral form
`
`of treprostinil. Are with me?
`
`A.
`
`Q.
`
`Okay.
`
`And that pill doesn‘t work at
`
`all for them, and then they take Tyvaso and it
`
`does work. Would you say that those two
`
`products still compete with respect to that
`
`patient specifically?
`
`A.
`
`Yes,
`
`I would.
`
`I think that
`
`example illustrates the point which is that
`
`patients have different options across
`
`different forms, and some options may be more
`
`effective for certain patients in certain
`
`circumstances, and that's the market in which
`
`the products compete. There are multiple
`
`options, and what we examine in economic data
`
`is which products are more successful within
`
`that market.
`
`Q.
`
`But each indication of all the
`
`drugs listed in B—8 specify specifically what
`
`class of symptoms they are designed to treat,
`
`right?
`
`A.
`
`Yes, but indications don‘t
`
`
`
`need to be identical to be in the same relevant
`
`
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`Page 137
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`DEFOREST MCDUFF, Ph.D.
`
`market.
`
`Q.
`
`If you turn to Attachment 3-8,
`
`the first page 8 Adcirca.
`
`A.
`
`Q.
`
`Do you see that?
`
`Yes.
`
`And under Indication it says:
`
`"Adcirca is a phosphodiesterase 5
`
`(PDES)
`
`inhibitor indicated for the treatment of
`
`pulmonary arterial hypertension to improve
`
`exercise ability."
`
`A.
`
`Q.
`
`Do you see that?
`
`Yes.
`
`Did you account for any
`
`differences in Adcirca or any of these drugs in
`
`terms of the type of drug compared to Tyvaso?
`
`A.
`
`This is the same answer as
`
`before.
`
`I did indirectly because that
`
`manifests itself into the sales data.
`
`Different drugs have different active
`
`ingredients or classes of ingredients, and they
`
`have different level of effectiveness.
`
`As a
`
`result,
`
`that shows up in the economic data in
`
`sales, and that's what
`
`I have examined.
`
`
`
`Q.
`If you turn back to paragraph
`
`
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`Page 138
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`DEFOREST MCDUFF, Ph.D.
`
`11 in your declaration and the last sentence
`
`starting at page 5 states:
`
`"For the treatment
`
`of PAH,
`
`in particular approved pharmaceuticals
`
`target one of three major biochemical
`
`pathways," and then it lists three pathways.
`
`A.
`
`Q.
`
`those pathways?
`
`Do you see that?
`
`Yes.
`
`Do you understand each of
`
`A.
`
`Q.
`
`What do you mean by that?
`
`Well, can you explain to me
`
`what an endothelin receptor antagonist is?
`
`A.
`
`Well,
`
`I am an economist, not a
`
`clinician, but my understanding is that it
`
`targets the endothelin receptors.
`
`It's a class
`
`of drugs that has that particular mechanism of
`
`action.
`
`Q.
`
`And what's an endothelin
`
`receptor?
`
`A.
`
`I don't recall specifically
`
`sitting here.
`
`Q.
`
`And for this paragraph, you
`
`put footnote 3.
`
`
`
`Do you see that?
`
`
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`Page 139
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`DEFOREST MCDUFF, Ph.D.
`
`Yes.
`
`And you don't cite Dr. Donovan
`
`A.
`
`Q.
`
`for that paragraph, correct?
`
`A.
`
`Q.
`
`Correct.
`
`So in general do these three
`
`pathways treat pulmonary arterial hypertension
`
`in different ways?
`
`A.
`
`If you are asking for a
`
`clinical opinion,
`
`then that question is
`
`probably better for a clinical or technical
`
`expert. My understanding is that these are
`
`different mechanism of action -— different
`
`mechanisms of action that treat a similar set
`
`of symptoms.
`
`So patients have a similar set
`
`of symptoms, and there are different classes of
`
`products that have different mechanisms for
`
`improving those symptoms and treating the
`
`disease.
`
`So that's my understanding of how the
`
`different pathways work as an economist.
`
`Q.
`
`So for your economic analysis,
`
`you didn't differentiate between these three
`
`pathways in terms of what would and would not
`
`
`
`compete with Tyvaso, correct?
`
`
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`DEFOREST MCDUFF, Ph.D.
`
`A.
`
`I am aware of these
`
`Page 140
`
`differences.
`
`I
`
`took them into account by
`
`analyzing the sales data, but I did not define
`
`submarkets according to these distinctions.
`
`I
`
`don't view that as appropriate or consistent
`
`with the evidence I have seen.
`
`The evidence I
`
`have seen supports competition across these
`
`pathways.
`
`Q.
`
`And so you don't know how
`
`Tyvaso compares to other drugs that have the
`
`same biochemical pathway, correct?
`
`that.
`
`A.
`
`Q.
`
`I am not sure what you mean by
`
`You didn't do an analysis of
`
`the subgroups, correct?
`
`A.
`
`I did not create submarkets
`
`based on these pathways, nor do I think that's
`
`appropriate here.
`
`Q.
`
`And you didn't create
`
`submarkets based on drug form either, correct?
`
`A.
`
`Correct, nor do I agree that's
`
`appropriate.
`
`Q.
`
`And you didn't create
`
`
`
`submarkets based on the symptoms listed in the
`
`
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`Page 141
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`DEFOREST MCDUFF, Ph.D.
`
`indication, correct?
`
`A.
`
`Correct.
`
`I don't view that as
`
`appropriate in light of the evidence I
`
`reviewed.
`
`Q.
`
`You also did not consider in
`
`your analysis how long each of the products
`
`were on the market before reaching their peak
`
`sales, correct?
`
`A.
`
`Q.
`
`I don't agree with that.
`
`Well, let's turn to your
`
`Exhibit -- or Attachment B—5.
`
`A.
`
`Q.
`
`Okay.
`
`And this is a comparison to
`
`PAH drug revenues showing sales for peak years
`
`for each of the drugs; is that correct?
`
`A.
`
`Q.
`
`Yes.
`
`And in this attachment you
`
`don't specify when the drug was first launched,
`
`correct?
`
`A.
`
`Not in this attachment, but
`
`one can see it in Attachment B—4 on the
`
`previous page.
`
`Q.
`
`But in your conclusions
`
`
`
`regarding peak sales, you don't provide any
`
`
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`Page 142
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`DEFOREST MCDUFF, Ph.D.
`
`analysis of what effect, if any,
`
`the year the
`
`peak sales came about based on the year the
`
`drug was launched, right?
`
`A.
`
`I don't agree with that, and
`
`in particular I would point you to paragraph 24
`
`where I indicate what the impact of different
`
`drugs being on the market for different lengths
`
`of time has which is that we know Tyvaso has
`
`already achieved peak sales because its sales
`
`have already started declining from 2015 to
`
`2016 and then from 2016 to 2017 based on the
`
`most recent data reported by UTC. Whereas,
`
`other drugs are continuing to increase.
`
`They
`
`have not already hit peak sales.
`
`So this comparison will look
`
`even more favorable to the other drugs and less
`
`favorable to Tyvaso into the future.
`
`So that‘s
`
`the sense in which I am thinking about how long
`
`the drugs have been on the market and whether
`
`their sales will continue to increase.
`
`Q.
`
`So if a drug had a
`
`particularly good year and had extremely high
`
`peak sales one year and low sales before and
`
`
`
`after that, do you still think that peak annual
`
`
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`Page 143
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`DEFOREST MCDUFF, Ph.D.
`
`sales are a relevant factor to consider?
`
`A.
`
`That's not a typical situation
`
`that occurs in pharmaceuticals.
`
`Sales tend to
`
`be more similar from year to year or increasing
`
`or decreasing on a more regular basis.
`
`It's
`
`not frequently the case that sales vary wildly
`
`from one year to the next.
`
`Q.
`
`Well,
`
`I am asking
`
`hypothetically if a product has one really good
`
`year for whatever reason and before and after
`
`have low sales, doesn't that mean that peak
`
`sales for that year are not really indicative
`
`of commercial success?
`
`MR. MATHAS: Object to the form.
`
`BY THE WITNESS:
`
`A.
`
`That's a theoretical situation
`
`that could be true in some circumstances.
`
`It‘s
`
`not true generally in pharmaceuticals, and it's
`
`not true based on the evidence I have reviewed
`
`here in this case.
`
`I have reviewed sales
`
`across all years, and peak sales are the good
`
`summary statistic for comparing across products
`
`based on that analysis.
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`A Veritext Company
`
`ww.veritext.com
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`David Feidman Worldwide
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`Page1430f297
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`Page 144
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`DEFOREST MCDUFF, Ph.D.
`
`BY MR. DELAFIELD:
`
`Q.
`
`For your peak sale analysis,
`
`did you -- strike that.
`
`Your declaration does not
`
`disclose any analysis for peak sales of the
`
`various drugs in relation to factors that may
`
`affect that year's sales that are unique to the
`
`drug, correct?
`
`MR. MATHAS: Object
`
`to the form.
`
`BY THE WITNESS:
`
`A.
`
`I am not sure what you have in
`
`mind. Could you explain?
`
`BY MR. DELAFIELD:
`
`Q.
`
`So, for example, if a brand
`
`drug comes on the market and for some reason
`
`the very next year a generic comes on the
`
`market,
`
`their peak sales might be the first
`
`year.
`
`Apologies.
`
`Is that a fair assessment?
`
`A.
`
`That doesn't tend to happen
`
`but it could.
`
`Q.
`
`So external factors such as
`
`
`
`the launch of a generic can affect sales for
`
`
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`Page 144 of 297
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`Page 145
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`DEFOREST MCDUFF, Ph.D.
`
`any given year, correct?
`
`A.
`
`They can.
`
`Sales can decline
`
`after generics come on the market. That's
`
`frequently what happens.
`
`Q.
`
`And, similarly, if a drug
`
`comes on the market with the same indication
`
`and is followed quickly by another drug with
`
`the exact same indication,
`
`their peak sale year
`
`may be different just based on the fact of the
`
`timing of the competition, correct?
`
`A.
`
`It could be. That's how
`
`competition works.
`
`Q.
`
`So peak annual sales could be
`
`the result of external factors such as other
`
`drugs coming on or off the market or other
`
`drugs becoming genericized, correct?
`
`A.
`
`Well, you described them as
`
`external factors, but they are relevant
`
`factors.
`
`They are relevant factors for
`
`competition, and it's the set of factors —— the
`
`set of competitive factors that determines how
`
`well a products does.
`
`So it's relevant to the
`
`analysis.
`
`
`
`But for commercial success,
`Q.
`
`
`800-642-1099
`
`A Veritext Company
`
`ww.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1450f297
`
`
`
`DEFOREST MCDUFF, Ph.D.
`
`there must be a nexus to the patented elements,
`
`Page 146
`
`correct?
`
`a nexus .
`
`A.
`
`Q.
`
`Generally, yes,
`
`there must be
`
`And so if sales are really
`
`good or really bad based on factors that are
`
`not related to the patent,
`
`then they would be
`
`external factors, correct?
`
`A.
`
`You don't frequently hear that
`
`term, but I see what you are saying. That's
`
`not the way it's typically described.
`
`Q.
`
`If you could turn to paragraph
`
`33 of your declaration.
`
`A.
`
`Q.
`
`I'm there.
`
`And the second sentence says:
`
`"For example, Tyvaso's designation as an orphan
`
`drug (reserved for products with low commercial
`
`opportunity and/or fewer than 200,000 U.S.
`
`patients) indicates limited economic
`
`opportunity."
`
`A.
`
`Q.
`
`Do you see that?
`
`Yes.
`
`So you understand Tyvaso is an
`
`
`
`orphan drug, right?
`
`
`800-642-1099
`
`A Veritext Company
`
`ww.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1460f297
`
`11
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`Page 147
`
`DEFOREST MCDUFF, Ph.D.
`
`Yes.
`
`And there are fewer than
`
`A.
`
`Q.
`
`200,
`
`000 U.S. patients, correct, according to
`
`your definition here?
`
`A.
`
`Well, orphan drug status can
`
`be granted based on a low commercial
`
`opportunity or fewer than 200,000 patients.
`
`I
`
`don't recall which prong was met for Tyvaso,
`
`and I don't recall whether the current count of
`
`PAH treatment is less than 200,000.
`
`I would
`
`have to go back and check.
`
`Q.
`
`Do you know how many people in
`
`the U.S. approximately have pulmonary
`
`hypertension?
`
`A.
`
`I believe it‘s in the hundreds
`
`of thousands, but I would have to go back and
`
`look to confirm.
`
`Q.
`
`So it could be fewer than
`
`200,
`
`000, correct?
`
`A.
`
`It could be, and I believe it
`
`was
`
`at one point in time.
`
`Q.
`
`Orphan drug status is specific
`
`to number of patients because the FDA requires
`
`
`
`less to get their approval simply because
`
`
`800-642-1099
`
`A Veritext Company
`
`ww.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1470f297
`
`11
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`25
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`
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`(AMI-l
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`mm
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`10
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`Page 148
`
`DEFOREST MCDUFF, Ph.D.
`
`there's not enough people for clinical trials.
`
`Have you heard that? Are you
`
`familiar with that concept?
`
`A.
`
`I don't believe that's the
`
`primary economic rationale for granting orphan
`
`drug status.
`
`I believe it has to do with
`
`limited commercial opportunity and wanting to
`
`provide incentives for development where there
`
`otherwise would not be.
`
`Q.
`
`But to your knowledge,
`
`the FDA
`
`designates whether or not a drug is an orphan
`
`drug, correct?
`
`A.
`
`Q.
`
`Yes,
`
`I believe so.
`
`And the FDA doesn't care about
`
`commercial opportunity.
`
`Just whether or not
`
`there's enough patients to qualify for the
`
`required clinical testing, right?
`
`MR. MATHAS: Object to the form.
`
`BY THE WITNESS:
`
`A.
`
`That may be one factor that
`
`they consider. Again,
`
`there are two prongs
`
`under which a drug can qualify for orphan drug
`
`status:
`
`The number of patients and also a lack
`
`
`
`of commercial opportunity.
`
`
`800-642-1099
`
`A Veritext Company
`
`ww.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1480f297
`
`
`
`Page 149
`
`DEFOREST MCDUFF, Ph.D.
`
`BY MR. DELAFIELD:
`
`Q.
`
`But it's your opinion that at
`
`most patients with pulmonary hypertension are
`
`in the hundreds of thousands, correct?
`
`A.
`
`As I indicated earlier,
`
`that's
`
`my best recollection, but to be sure,
`
`I would
`
`have to go back and confirm.
`
`I don't recall
`
`the specific figure sitting here.
`
`Q.
`
`There's approximately 325
`
`million people in the U.S.
`
`A.
`
`Q.
`
`Do you agree with that?
`
`More or less.
`
`So even if the full 200,000
`
`patients had pulmonary hypertension,
`
`that would
`
`be far less than 1 percent of the U.S.
`
`population, correct?
`
`A.
`
`Q.
`
`Yes.
`
`Now, if you turn to paragraph
`
`23,
`
`you say:
`
`"First, Tyvaso's annual sales
`
`ranging from $152 million to $470 million are
`
`not exceptional or even above average in the
`
`context of pharmaceutical product sales."
`
`Do you see that?
`
`
`
`Yes.
`A.
`
`
`800-642-1099
`
`A Veritext Company
`
`www.veritext.com
`
`David Feidman Worldwide
`
`UNITED THERAPEUTICS, EX. 2035
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01622
`
`Page1490f297
`
`11
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`Page 150
`
`DEFOREST MCDUFF, Ph.D.
`
`Q.
`
`And then you go on to analyze
`
`the first —- strike that.
`
`You go on to analyze the top
`
`two decile percentages for drugs, correct?
`
`A.
`
`Q.
`
`As w
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