UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`
`NALOX-1 PHARMACEUTICALS, LLC,
`Petitioner,
`
`v.
`
`ADAPT PHARMA OPERATIONS LIMITED, and
`OPIANT PHARMACEUTICALS, INC.,
`Patent Owners.
`__________________
`
`Case IPR2019-00694
`U.S. Patent No. 9,629,965
`__________________
`
`DECLARATION OF ERIC KARAS
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 1
`
`
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`
`NALOX-1 PHARMACEUTICALS, LLC,
`Petitioner,
`
`v.
`
`ADAPT PHARMA OPERATIONS LIMITED, and
`OPIANT PHARMACEUTICALS, INC.,
`Patent Owners.
`__________________
`
`Case IPR2019-00694
`U.S. Patent No. 9,629,965
`__________________
`
`DECLARATION OF ERIC KARAS
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 1
`
`
`
`
`
`
`I.
`
`I, Eric Karas, declare as follows:
`
`OVERVIEW
`
`DECLARATION OF ERIC KARAS
`
`1.
`
`I am over the age of 18 and otherwise competent to make this
`
`declaration. This declaration is based on my personal knowledge and experience.
`
`I understand that this declaration is being submitted in support of the Response of
`
`Patent Owners Adapt Pharma Operations Limited and Opiant Pharmaceuticals,
`
`Inc., to petitions for inter partes review filed by Nalox-1 Pharmaceuticals, LLC
`
`challenging claims 1–29 of U.S. Patent No. 9,211,253, claims 1–45 of U.S. Patent
`
`No. 9,468,747, and claims 1–30 of U.S. Patent No. 9,629,965.
`
`II. BACKGROUND
`
`2.
`
`I am currently Vice President and General Manager of U.S.
`
`Commercial at Emergent BioSolutions, Inc. (“Emergent”), a pharmaceutical life
`
`sciences company. In that role, I am responsible for sales, marketing, and
`
`distribution of Narcan® Nasal Spray in the United States.
`
`3.
`
`Narcan® Nasal Spray was originally developed by Patent Owner
`
`Adapt Pharma Operations Limited and its affiliates (which I refer to herein
`
`collectively as “Adapt Pharma”). It is Adapt Pharma’s only commercial product.
`
`4.
`
`The FDA approved Narcan® Nasal Spray in November 2015, and
`
`Adapt Pharma began marketing Narcan® Nasal Spray in the United States in
`
`2
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 2
`
`
`
`
`February 2016. Adapt Pharma has marketed Narcan® Nasal Spray in the United
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`DECLARATION OF ERIC KARAS
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`States continuously since that time.
`
`5.
`
`I joined Adapt Pharma in December 2016 as Executive Director of
`
`Marketing. In that role, I was responsible for marketing Narcan® Nasal Spray to
`
`healthcare providers and patients. After approximately six to nine months, I was
`
`promoted to Vice President of Marketing. In that role, I remained responsible for
`
`marketing Narcan® Nasal Spray to healthcare providers and patients, but also
`
`assumed responsibility for working with third-party payors, such as insurance
`
`companies, to address coverage issues regarding Narcan® Nasal Spray.
`
`6.
`
`In 2018, Emergent acquired Adapt Pharma. After the acquisition,
`
`Emergent promoted me to my current role. For ease of reference in this
`
`declaration, I refer to Emergent and Adapt Pharma collectively as “Adapt.”
`
`7.
`
`I have an undergraduate degree in accounting from Rutgers
`
`University, a Master of Business Administration from Michigan State University,
`
`and 23 years’ experience in sales and marketing in the pharmaceutical industry.
`
`Over the course of my career, I have been involved in sales and marketing of
`
`approximately 50 pharmaceutical products.
`
`3
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 3
`
`
`
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`III. BACKGROUND ON NALOXONE AND NARCAN® NASAL SPRAY
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`DECLARATION OF ERIC KARAS
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`8.
`
`Adapt sells cartons of Narcan® Nasal Spray in the United States and
`
`Canada. Each carton of Narcan® Nasal Spray contains two devices. Each device
`
`contains a 4 mg dose of naloxone.
`
`9.
`
`Adapt sells Narcan® Nasal Spray in packs of two devices for several
`
`reasons. For example, the second device serves as a backup in the rare instance
`
`that one of the devices is damaged or defective. Also, the second device serves as
`
`a backup if a caregiver fails to administer correctly the first device, for example, by
`
`attempting to “prime” it. Third, the second device provides a backup dose of
`
`naloxone for “re-dosing” a patient who does respond adequately to the first dose.
`
`10. After the FDA approved Narcan® Nasal Spray with a 4 mg dose in
`
`November 2015, Adapt submitted to the FDA a new drug application for a version
`
`of Narcan® Nasal Spray with a 2 mg dose. Adapt went forward with submitting
`
`the 2 mg product to the FDA for approval in March 2016 because Adapt had
`
`received feedback, including from healthcare providers, pharmacists, addiction
`
`specialists, and opioid-use disorder advocates, expressing concern that a 4 mg
`
`intranasal dose may be too high for many patients. These people were concerned
`
`that Adapt’s 4 mg product could cause unnecessary opioid withdrawal symptoms
`
`and other dangerous side effects.
`
`4
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 4
`
`
`
`
`
`11.
`
` Although Adapt’s 2 mg product was approved by the FDA in
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`DECLARATION OF ERIC KARAS
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`January 2017, Adapt ultimately decided not to market the 2 mg version because of
`
`the low incidence of reported adverse events experienced by patients treated with
`
`the 4 mg version of the product. Adapt’s pharmacovigilance team drew this
`
`conclusion from its review of adverse event reports regarding the product.
`
`Accordingly, Adapt has never marketed the 2 mg version of the Narcan® Nasal
`
`Spray. The only version of Narcan® Nasal Spray that Adapt has marketed
`
`contains 4 mg naloxone per device.
`
`12. Adapt sells Narcan® Nasal Spray in two distinct market segments:
`
`The “retail” market segment and the “public interest” market segment. The retail
`
`market segment refers to sales of Narcan® Nasal Spray to patients through retail
`
`pharmacies. The public interest market segment refers to sales of Narcan® Nasal
`
`Spray to “public interest” organizations, such as government departments (e.g.,
`
`federal and state departments of health), first responders (e.g., police officers,
`
`firefighters, and emergency medical services personnel), prisons, hospitals,
`
`addiction treatment centers, and various community-based organizations.
`
`13. There are three types of naloxone products that compete with
`
`Narcan® Nasal Spray in the markets I have just described: traditional injectable
`
`naloxone, the Mucosal Atomizer Device improvised naloxone kit (“MAD kit”),
`
`and the Evzio® auto-injector.
`
`5
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 5
`
`
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`DECLARATION OF ERIC KARAS
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`
`
`14. Traditional injectable naloxone has been available in the United States
`
`since the early 1970s. It is administered by injecting naloxone into a patient using
`
`a syringe with an exposed needle. This form of naloxone is typically supplied
`
`either in a glass vial or in a pre-filled syringe.
`
`15. The MAD kit consists of a pre-filled syringe containing a naloxone
`
`pharmaceutical composition designed for “traditional” injection (typically 2 mg/2
`
`mL), together with a Mucosal Atomization Device (“MAD”). To administer the
`
`MAD kit, a caregiver attaches the MAD to the end of the syringe, then sprays the
`
`pharmaceutical composition into the patient’s nose. Although this combination
`
`device is not FDA-approved, its components have been available in the
`
`marketplace for over a decade.
`
`16. Evzio® is an auto-injector. It is a device with a retractable needle,
`
`somewhat similar to an EpiPen®, that a caregiver can use to inject a dose of
`
`naloxone intramuscularly into a patient’s thigh. It launched in the United States in
`
`2014, more than a year before Narcan® Nasal Spray became commercially
`
`available.
`
`A. Retail Market Segment For Narcan® Nasal Spray
`
`17. Narcan® Nasal Spray currently has an over 95 percent market share
`
`for naloxone products in the United States in the retail market segment. I know
`
`this because in the course of its business, Adapt regularly calculates Narcan®
`
`6
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 6
`
`
`
`
`Nasal Spray’s market share in the retail market segment. In order to perform this
`
`DECLARATION OF ERIC KARAS
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`calculation, Adapt uses data it obtains from third-party data aggregators, such as
`
`Bloomberg’s Symphony Health.
`
`18. Pharmaceutical companies operating in the retail market segment
`
`typically do not sell their products directly to patients or other end-users. Rather,
`
`they sell their products to wholesalers, such as McKesson Corp. or Cardinal
`
`Health, Inc. The wholesalers then re-sell the products to retail pharmacies such as
`
`CVS and Walgreens, and the retail pharmacies then re-sell the products to patients
`
`and other end-users. The process I have just described is how all naloxone
`
`products, including Narcan® Nasal Spray, are sold and distributed in the retail
`
`market segment.
`
`19. When Adapt sells Narcan® Nasal Spray to a wholesaler, it charges
`
`what is known as a “wholesale acquisition cost” (“WAC”). The WAC of Narcan®
`
`Nasal Spray is $125 for one carton. Narcan® Nasal Spray’s WAC has been $125
`
`since the product launched in February 2016. Adapt selected the $125 WAC in
`
`order to make Narcan® Nasal Spray affordable to consumers and to ensure that
`
`anyone can obtain it for a reasonable price. In my experience, most
`
`pharmaceutical companies increase the WACs of their products on an annual basis.
`
`The fact that Adapt has chosen not to increase the WAC of Narcan® Nasal Spray
`
`reflects Adapt’s commitment to keeping the product affordable for consumers.
`
`7
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 7
`
`
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`DECLARATION OF ERIC KARAS
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`
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`20. As part of my work at Adapt, I monitor the prices of products that
`
`compete with Narcan® Nasal Spray. These prices are widely available through
`
`public sources. In contrast to the WAC for Narcan® Nasal Spray, the typical
`
`WAC for two doses of traditional injection naloxone is between $5 and $10. The
`
`typical WAC for a MAD kit is approximately $70 for two doses, which includes
`
`the individual WAC prices of all of the components that comprise the kit. With
`
`respect to Evzio®, the WAC price for Evzio® has changed since the product’s
`
`launch in 2014. In July 2014, the WAC for a carton of Evzio® (containing two
`
`auto-injectors) was $575. However, in November 2015, the same month that the
`
`FDA approved Narcan® Nasal Spray, Evzio®’s manufacturer, Kaléo, responded
`
`by increasing Evzio®’s WAC price to $750, and then subsequently increased the
`
`WAC price to $3,750 in February 2016, and then $4,100 in January 2017, where it
`
`remains today. In December 2018, Kaléo announced that an authorized generic
`
`version of the product would become available in mid-2019, at a price of $178 for
`
`a carton of two auto-injectors.
`
`21.
`
`In my experience, a pharmaceutical product’s WAC does not reflect
`
`the actual out-of-pocket cost that a patient pays for that product. Among other
`
`things, most patients have insurance coverage that pays at least some of the cost.
`
`Patients covered by insurance typically only pay a small part of the cost of the
`
`product, often in the form of an out-of-pocket “co-pay.”
`
`8
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 8
`
`
`
`DECLARATION OF ERIC KARAS
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`
`
`22. Approximately 98 percent of insured lives in the United States have
`
`insurance coverage for Narcan® Nasal Spray. The average insurance co-pay for
`
`Narcan® Nasal Spray is $17, and 80 percent of the prescriptions filled for
`
`Narcan® Nasal Spray have a co-pay of less than $20. In addition, two of the top
`
`five insurance providers—Aetna and Anthem—have reduced the co-pay for
`
`Narcan® Nasal Spray to $0.
`
`23.
`
`In contrast, an insured patient’s co-pay for the Evzio® auto-injector is
`
`approximately $350 to $400, on average. However, Kaléo, the manufacturer of
`
`Evzio®, has instituted a program by which it pays co-pays for patients with
`
`commercial insurance on the patients’ behalf. Thus, commercially insured patients
`
`do not have to pay any out-of-pocket costs to obtain Evzio®—i.e., their co-pay is
`
`effectively $0. Kaléo also has instituted a program whereby it gives Evzio® away
`
`for free to any patient whose insurance will not cover the product, or who does not
`
`have insurance coverage. Thus, these patients also do not have to pay any out-of-
`
`pocket costs to obtain Evzio®—again, the cost of Evzio® from these patients’
`
`perspective is effectively $0.
`
`24. Adapt does not have discount programs for Narcan® Nasal Spray
`
`comparable to Kaléo’s. Thus, from the perspective of most patients, Evzio® is
`
`actually cheaper than Narcan® Nasal Spray.
`
`9
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 9
`
`
`
`DECLARATION OF ERIC KARAS
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`
`
`B.
`
`Public Interest Market Segment For Narcan® Nasal Spray
`
`25. Adapt estimates that Narcan® Nasal Spray has an approximately 75
`
`percent market share in the public interest market segment in the United States for
`
`naloxone products.
`
`26. Calculating Narcan® Nasal Spray’s public interest market share is
`
`more difficult for the public interest market segment than it is for the retail market
`
`segment. Unlike in the retail market segment, there is no reliable or
`
`comprehensive third-party source of data to track sales of naloxone products to
`
`public interest purchasers. One reason for this is that public interest purchasers
`
`typically obtain the products directly from a manufacturer or through specialty
`
`distributors, who do not regularly report sales figures to third-party data
`
`aggregators like Bloomberg’s Symphony Health. As a result, Adapt’s estimate of
`
`its public interest segment market share is somewhat less precise than its estimate
`
`of its retail segment market share.
`
`27. Adapt bases its estimate of its public interest segment market share on
`
`a number of sources of information. For example, Adapt looks at sales figures that
`
`Amphastar, the manufacturer of the pre-filled 2 mg/2 mL naloxone syringe used in
`
`the MAD kit, has publicly reported. Adapt also bases its estimate on knowledge it
`
`has derived during the course of selling Narcan® Nasal Spray. For example,
`
`conversations with stakeholders in the public interest supply chain have led Adapt
`
`10
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 10
`
`
`
`
`to conclude that Narcan® Nasal Spray accounts for 100 percent of public interest
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`DECLARATION OF ERIC KARAS
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`sales several states, including California, New York, and Texas, and accounts for
`
`the majority of public interest sales in other states considered to be large markets,
`
`such as Massachusetts (where it accounts for approximately 90 percent of public
`
`interest naloxone sales), Florida (same), Ohio, Pennsylvania, and Maryland.
`
`Further, Adapt’s own internal sales figures reflect that overall sales of Narcan®
`
`Nasal Spray in the public interest segment have been comparable to or higher than
`
`sales in the retail segment. For example, in 2019, sales of Narcan® Nasal Spray in
`
`the public interest segment accounted for approximately 60% percent of the
`
`product’s overall sales.
`
`28. The public interest market segment differs from the retail segment in
`
`several ways. Unlike retail purchasers, public interest purchasers do not have
`
`insurance that will pay a portion of the cost of a pharmaceutical product. As a
`
`result, public interest purchasers typically bear the full cost of purchasing Narcan®
`
`Nasal Spray, making them more price-sensitive than retail segment purchasers.
`
`Public interest purchasers also include medically trained individuals, such as EMS
`
`providers, who are equipped to administer naloxone via injection.
`
`29. Adapt charges public interest purchasers $75 for a carton of Narcan®
`
`Nasal Spray—a 40 percent discount on its WAC. The price Adapt charges public
`
`interest purchasers has not changed since it launched Narcan® Nasal Spray in
`
`11
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 11
`
`
`
`
`February 2016. As in the retail segment, Adapt selected the $75 public interest
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`DECLARATION OF ERIC KARAS
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`price in order to make the product affordable to public interest purchasers. Indeed,
`
`the price Adapt charges public interest purchasers for Narcan® Nasal Spray is
`
`roughly comparable to the price of MAD kits containing generic naloxone. The
`
`fact that Adapt selected this price and has not increased it over time reflects
`
`Adapt’s commitment to ensuring widespread access to Narcan® Nasal Spray in the
`
`public interest market segment.
`
`30. With regard to competitors of Narcan® Nasal Spray, traditional
`
`injectable naloxone and the MAD kit are available to public interest purchasers at
`
`the same prices that they are available to retail purchasers, i.e., $5–10 for two
`
`doses of traditional injectable naloxone and approximately $70 for two doses of the
`
`MAD kit. Evzio®, however, is available at a reduced price to public interest
`
`purchasers. Evzio®’s public interest price was previously $350, and as of 2019 is
`
`now $178.
`
`31. Adapt estimates that traditional injectable naloxone and the MAD kit
`
`comprise approximately 25 percent of sales of naloxone products in the public
`
`interest market segment. These products are the largest competitors to Narcan®
`
`Nasal Spray in the public interest market segment. Adapt estimates that Evzio®’s
`
`market share in the public interest space is less than 1 percent, based on its
`
`12
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 12
`
`
`
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`experience selling Narcan® Nasal Spray in the public interest market and its
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`DECLARATION OF ERIC KARAS
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`communications with public interest purchasers around the United States.
`
`IV. ADVERTISING AND PROMOTION OF NARCAN® NASAL SPRAY
`
`A. Adapt’s Advertising And Promotional Expenditures
`
`32. Adapt has a relatively small advertising and promotion budget for
`
`Narcan® Nasal Spray. It has budgeted $5.2 million on advertising and promotion
`
`of Narcan® Nasal Spray this year (i.e., 2019). That budget has typically increased
`
`about 5 percent per year since launch.
`
`33. Compared to the many other pharmaceutical products I have worked
`
`on during my career, Adapt’s advertising and promotion budget for Narcan® Nasal
`
`Spray is among the lowest I have seen. In my experience, it is very common for
`
`pharmaceutical products to have annual advertising and promotion budgets in
`
`excess of $10 million. I have worked on pharmaceutical products with advertising
`
`and promotion budgets in excess of $40 million.
`
`34.
`
`In addition, Adapt spends approximately 30 percent of its annual
`
`advertising and promotion budget on non-branded promotion. Non-branded
`
`promotion means the advertising or promotional materials do not refer to Narcan®
`
`Nasal Spray or promote the product specifically. For example, one type of non-
`
`branded promotion involves materials that educate people about the risks of
`
`13
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 13
`
`
`
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`opioids and the importance of having any form of naloxone available in case of
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`DECLARATION OF ERIC KARAS
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`opioid overdose.
`
`B. Adapt’s Marketing And Promotional Efforts
`
`35. When it comes to marketing Narcan® Nasal Spray, Adapt relies
`
`principally on non-personal promotion, which involves distributing information by
`
`mail or email. Adapt also has a website that patients and healthcare providers can
`
`access to learn more about Narcan® Nasal Spray. The purpose of these marketing
`
`efforts is primarily to raise awareness about the importance of emergency
`
`treatment, the risks of prescription opioids, and to educate the public about the
`
`attributes of Narcan® Nasal Spray.
`
`36. Adapt’s non-personal promotion does not include any television
`
`advertising. In 2018, Adapt tested one 60-second television commercial in 10
`
`major metropolitan markets in the United States. The commercial played in those
`
`markets for about 12 weeks. At the end of the test, we looked at what sort of
`
`increase, if any, had occurred in prescriptions of Narcan® Nasal Spray in those
`
`markets. Although we saw a limited increase in prescriptions in those markets, we
`
`concluded that the increase did not justify a continued investment in television
`
`advertising. Adapt does not engage in any television advertising today.
`
`37.
`
`In addition, Adapt does not have a traditional pharmaceutical sales
`
`force. By traditional sales force, I mean a group of sales representatives whose
`
`14
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 14
`
`
`
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`primary responsibilities include “calling on” physicians and pharmacists in the
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`DECLARATION OF ERIC KARAS
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`retail market segment to educate them about Narcan® Nasal Spray and to
`
`encourage them to prescribe the product. In my experience, most pharmaceutical
`
`companies employ these types of sales representatives to help market their
`
`pharmaceutical products.
`
`38.
`
`In my first year at Adapt, we tested out having a traditional sales
`
`force. We employed six sales representatives in major metropolitan areas around
`
`the United States. This “pilot program” lasted several months. At the end of the
`
`pilot program, we looked at what sort of increase, if any, had occurred in
`
`prescriptions of Narcan® Nasal Spray in those metropolitan areas. Although we
`
`saw a limited increase in prescriptions in those areas, we concluded that the
`
`increase did not justify a continued investment in traditional sales representatives.
`
`Accordingly, we ended the pilot program. Adapt has not employed any traditional
`
`sales representatives in the retail market segment since that time.
`
`39. Until recently and unlike Adapt, Evzio®’s manufacturer, Kaléo,
`
`employed a traditional sales force for 3 years to market Evzio® in the retail market
`
`segment. Kaléo’s sales force comprised approximately 45 to 50 sales
`
`representatives that called on physicians and pharmacists. Notwithstanding
`
`Kaléo’s employment of a traditional sales force, Narcan® Nasal Spray managed to
`
`15
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 15
`
`
`
`
`achieve an over 95 percent market share in the retail market segment. Not
`
`DECLARATION OF ERIC KARAS
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`surprisingly, Kaléo disbanded its traditional sales force in the middle of 2019.
`
`40.
`
`In the public interest market segment, Adapt employs 12 “field
`
`directors.” These field directors do not perform a traditional sales function like the
`
`retail sales representatives that I described above. For example, they do not meet
`
`with physicians or pharmacists. Rather, their role is limited to meeting with
`
`potential and current public interest purchasers to provide education on the opioid
`
`crisis and naloxone, to educate them about Narcan® Nasal Spray specifically, and
`
`to assist them in procuring naloxone products.
`
`41.
`
`It is important for Adapt to employ field directors in the public
`
`interest market segment because, unlike prescribers in the retail market segment,
`
`public interest purchasers often have little, if any, experience obtaining
`
`prescription pharmaceutical products. Many public interest purchasers, such as
`
`police departments, simply do not have any need for, and do not purchase,
`
`prescription pharmaceutical products on a regular basis. In many cases public
`
`interest purchasers are not aware of the unique regulatory landscape applicable to
`
`naloxone products, how to go about accessing public funding that can be used to
`
`purchase naloxone, or how to distribute a prescription pharmaceutical product to
`
`vulnerable populations. Adapt’s field directors provide this vital information,
`
`education, and assistance to public interest purchasers.
`
`16
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 16
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`DECLARATION OF ERIC KARAS
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`42. One of the functions that field directors serve is to educate public
`
`interest purchasers on how to set up distribution programs funded by state and
`
`federal grants to combat the opioid crisis. Federal grants are administered by the
`
`Substance Abuse and Mental Health Services Administration (“SAMHSA”).
`
`SAMHSA grants can be used for a variety of purposes, including treatment of
`
`opioid use disorder; infrastructure; education; awareness campaigns about the
`
`dangers of heroin, addiction, and opioid prescription misuse; and, when
`
`appropriate, the purchase of naloxone products. Public interest purchasers can use
`
`SAMHSA grant funds to purchase any naloxone product, not just Narcan® Nasal
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`Spray.
`
`C. Adapt’s Marketing Messages
`
`43. Adapt invests in educating consumers, pharmacists, physicians, and
`
`other medical personnel about the formulation, dose, device, and ease-of-use of
`
`Narcan® Nasal Spray. In support of these efforts, Adapt uses a variety of
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`promotional materials such as pamphlets, brochures, flyers, magazine and other
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`media advertisements, e-mail and social media campaigns, internet websites and
`
`ads, and micro-targeted media. Adapt’s marketing efforts include materials and
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`campaigns that are relevant to all audiences, as well as materials targeted at
`
`specific groups, such as members of the medical community or public interest
`
`purchasers.
`
`17
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 17
`
`
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`DECLARATION OF ERIC KARAS
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`
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`44. Adapt has over 200 marketing pieces that it uses to communicate
`
`different messages about Narcan® Nasal Spray, depending on the audience. Some
`
`of the core messages that these materials typically convey are that Narcan® Nasal
`
`Spray is indicated for the treatment of opioid overdose; that the product is easy-to-
`
`use and needle-free; that the product contains a 4 mg dose of naloxone in a
`
`concentrated 0.1 mL nasal formulation; and that the device does not require any
`
`specialized training.
`
`45. These features are an important part of Adapt’s overall messaging
`
`strategy for Narcan® Nasal Spray, because the product is commonly used in
`
`stressful emergency situations where these features are paramount. For example,
`
`ease-of-use is very important in an emergency setting. Narcan® Nasal Spray’s
`
`highly concentrated formulation is also an advantage which allows for a low
`
`volume of the drug to be administered, thereby reducing the chance that some of
`
`the spray will drain out of the nose.
`
`46. Adapt identified these and other “core” marketing messages about
`
`Narcan® Nasal Spray by engaging in market research to determine what marketing
`
`messages consumers find most important or informative. I estimate that Adapt has
`
`conducted 15 to 20 market research studies for this purpose, and that these studies
`
`surveyed the views of at least 5,000 physicians, pharmacists, consumers, and
`
`patients, among others.
`
`18
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 18
`
`
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`DECLARATION OF ERIC KARAS
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`
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`47. The following exhibits are representative branded marketing materials
`
`that Adapt has created over the years for Narcan® Nasal Spray. I consider them to
`
`be a fair representation of the types of branded marketing materials that Adapt has
`
`used, and continues to use, to market Narcan® Nasal Spray. Adapt’s branded
`
`marketing materials routinely highlight these Narcan® Nasal Spray core messages.
`
`48. Exhibit 2116 (“Adapt Website”) is true and correct copy of an image
`
`that Adapt used on its website shortly after Narcan® Nasal Spray launched in
`
`February 2016. The website is a general-purpose website that is targeted at
`
`potential end-purchasers in both the retail and public interest market segments, as
`
`well as prescribers. The image informed visitors that Narcan® Nasal Spray is
`
`indicated “FOR EMERGENCY TREATMENT OF OPIOID OVERDOSE”; that it
`
`is “NOW FDA-APPROVED”; that it contains a “4 mg nasal dose in [a] single
`
`spray”; that it is “[r]eady to use”; and that it is “[n]eedle free.”
`
`49. Exhibit 2114 (“Adapt Fact Sheet”) is a true and correct copy of a “fact
`
`sheet” that Adapt’s corporate communications team provided to the media,
`
`including journalists, for educational purposes. The fact sheet provides
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`information on the opioid overdose epidemic, how Narcan® Nasal Spray works,
`
`who should have Narcan® Nasal Spray, and important safety information about the
`
`product. Among other things, it states that Narcan® Nasal Spray is an “FDA-
`
`Approved Nasal Naloxone to Treat Opioid Overdose”; that it “rapidly delivers a 4
`
`19
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 19
`
`
`
`
`mg dose of naloxone in a single concentrated 0.l ml nasal spray from a compact,
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`DECLARATION OF ERIC KARAS
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`ready-to-use device”; and that it is a “needle-free naloxone treatment” that “can be
`
`readily administered when an opioid overdose occurs and does not require
`
`assembly or specialized training.”
`
`50. Exhibit 2115 (“Adapt Flier”) is a true and correct copy of a flier that
`
`Adapt has provided to customers in the public interest segment. Among other
`
`things, the flier highlights key product attributes and provides a company
`
`telephone number to call to order the product directly from Adapt. The flier states
`
`that Narcan® Nasal Spray is “[t]he FIRST and ONLY FDA-Approved intranasal
`
`naloxone for emergency treatment of opioid overdose”; that it contains a
`
`“[p]refilled 4 mg unit dose”; that there is “[n]o assembly needed”; that it has “[n]o
`
`needles”; and that there is “[n]o special training required.”
`
`51. Exhibit 2113 (“Adapt Brochure”) is a true and correct copy of a
`
`brochure that Adapt’s field directors provide to purchasers and other individuals in
`
`the public interest segment. Among other things, the brochure highlights that
`
`Narcan® Nasal Spray has the “POWER TO HELP REVERSE AN OPIOID
`
`OVERDOSE”; that it contains a “[c]oncentrated 4 mg dose”; that it is “[n]eedle-
`
`free; no assembly required”; and that it “[r]equires no specialized training.”
`
`20
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 20
`
`
`
`
`
`52. These marketing materials reflect Adapt’s overall public relations
`
`objective of increasing awareness and understanding of the unique benefits of
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`DECLARATION OF ERIC KARAS
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`Narcan® Nasal Spray, including its 4 mg dose of naloxone and method of delivery.
`
`V. NARCAN® BRAND NAME
`
`53. Adapt licensed the brand name “Narcan®” from Endo
`
`Pharmaceuticals in May 2015. Endo began using that brand name in the early
`
`1970s, when it launched the first naloxone product in the United States. That
`
`product was an injection product, not a nasal spray.
`
`54. Before Adapt licensed the brand name Narcan®, Endo had only used
`
`that brand name to refer to its injection naloxone product. Adapt licensed the
`
`brand name Narcan® because some medical professionals were familiar with the
`
`brand name and understood it to refer to an injection naloxone product. Adapt’s
`
`market research indicates that at the time Adapt licensed the brand name, it was not
`
`widely recognized by non-medical professionals.
`
`55.
`
` Adapt pays a small annual royalty to Endo, primarily for use of the
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`Narcan® brand name. That royalty comprises 2 percent of net sales of Narcan®
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`Nasal Spray.
`
`VI. ADAPT’S PUBLIC INTEREST ADVOCACY EFFORTS
`
`56. Adapt also engages in certain types of public interest advocacy
`
`relating to the opioid crisis and access to naloxone. Specifically, Adapt advocates
`
`21
`
`Opiant Exhibit 2204
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 21
`
`
`
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`for greater access to naloxone products by promoting “co-prescribing legislation”
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`DECLARATION OF ERIC KARAS
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`and the entry of “standing orders.”
`
`A. Co-Prescribing Legislation
`
`57.
`
`“Co-prescribing legislation” is a statute or regulation that requires a
`
`medical professional who is prescribing an opioid simultaneously to prescribe, or
`
`at least to offer to prescribe, naloxone. When I joined Adapt in 2016, no states had
`
`implemented co-prescribing legislation. Today, nine states have implemented it.
`
`The co-prescribing legislation t
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