PUBLIC VERSION
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MYLAN PHARMACEUTICALSINC. and AMNEAL
`PHARMACEUTICALSLLC,
`
`Petitioners
`Vv
`
`YEDA RESEARCH AND DEVELOPMENTCO. LTD.
`
`Patent Owner
`
`Case No. IPR2015-00643 (8,232,250 B2)
`Case No. IPR2015-00644 (8,399,413 B2)
`Case No. IPR2015-00830 (8,969,302 B2)'””
`
`DECLARATION OF PROF. JOEL W. HAY
`
`Case Nos. IPR2015-01976, IPR2015-01980 and IPR2015-01981 have been
`
`joined with these proceedings.
`
`2
`
`A word-for-word identical Declaration is being filed in each proceeding.
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`(PAPO/ Gor)?
`DEPOSITION
`EXHIBIT
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`MYLAN PHARMS.INC. EXHIBIT 1099 PAGE1
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`Biogen Exhibit 2212
`Mylanv. Biogen
`IPR 2018-01403
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`Page 1 of 128
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`Biogen Exhibit 2212
`Mylan v. Biogen
`IPR 2018-01403
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`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MYLAN PHARMACEUTICALSINC. and AMNEAL
`PHARMACEUTICALSLLC,
`
`Petitioners
`Vv
`
`YEDA RESEARCH AND DEVELOPMENTCO. LTD.
`
`Patent Owner
`
`Case No. IPR2015-00643 (8,232,250 B2)
`Case No. IPR2015-00644 (8,399,413 B2)
`Case No. IPR2015-00830 (8,969,302 B2)'””
`
`DECLARATION OF PROF. JOEL W. HAY
`
`Case Nos. IPR2015-01976, IPR2015-01980 and IPR2015-01981 have been
`
`joined with these proceedings.
`
`2
`
`A word-for-word identical Declaration is being filed in each proceeding.
`
`(PAPO/ Gor)?
`DEPOSITION
`EXHIBIT
`
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`=
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` Ee
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`3
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`MYLAN PHARMS.INC. EXHIBIT 1099 PAGE1
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`Page 1 of 128
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`Biogen Exhibit 2212
`Mylanv. Biogen
`IPR 2018-01403
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`Page 1 of 128
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`Biogen Exhibit 2212
`Mylan v. Biogen
`IPR 2018-01403
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`PUBLIC VERSION
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`TABLE OF CONTENTS
`
`[.
`
`II.
`
`INTRODUCTION.20. ccccccsecseesneeeensesseeeseeecsecsesseesseeersceseeseseeraesneseees 1
`
`BACKGROUND AND QUALIFICATIONS. oo. ccccceccesesseseeteeteeseensesenss 2
`
`UI.
`
`RELEVANT LEGAL CONCEPTS. .00..cccccccccssesesceseeseeseeseetseseeecsscssesereaees 8
`
`TV.
`
`SUMMARYOF OPINIONS. ........cceccesccsessesseteeseeseeseeseessesecseeseeseeseeseesesseeas 10
`
`V.
`
`OPINIONS AND THE REASONS AND BASES FOR MY
`OPINIONS. 000... eeeccecceseseereeseeneeaeeceeaeceeseesececseesesessesseseesessecaeeansaeeseateeseoaas 15
`
`A.—Dr. Grabowski Has Not Defined the Relevant Market.........0....00. 16
`
`1.
`
`Dr. Grabowski Makes No Attempt to Actually
`Define the Relevant Market and Excludes Key
`Drugs from His Analyses. .......cccccscssesseestesescseseserssesssseeseenss 16
`
`Dr. Grabowski Fails to Use Accurate and Reliable MS
`Drug Sales Data. .......ccccccccccccsesseessesssecsesesssessecssesssseessecesessssesesessvens 19
`
`Dr. Grabowski Failed to Account for Different Dosing
`PLOtOCOIS. oe eeeeeeesecessseseeseseseeseeseceeeracessusneseaeseseceseaseseesneseeeaeeeass 23
`
`Dr. Grabowski Has Not Demonstrated that Copaxoneis a
`Commercial SUCCESS... ccessesseseceeeseeecensssesessescesaeeneeeseeceeesaesaneetenes 28
`
`B.
`
`C.
`
`D.
`
`1.
`
`Copaxone 40mg/mL Sales Are Fully Accounted
`for by Price Discounting Relative to Copaxone
`2ZOmg/ML and Glatopa .......ccececcecsscssesseeseessessesseesseseeecseeeaneaes 28
`
`Dr. Grabowski Does Not Address Profitability or
`ROL, ec eccecesceccseeesecsecseeseeseeseeaeeeecaneaecseceensensseeseaseesesseassneseseanas 33
`
`Financial Analyst Reports Fail to Demonstrate
`Commercial Success of Copaxone 40mg/mL..00......:cc scene 35
`
`Teva’s Promotion of and Economic Incentives to
`Switch to Copaxone 40mg/mL Was an Important
`Driver Of Sales. .o.c.ccccccccccccccsccsecsecsecsecsecsecececccssesesesusauscassucetreess 37
`
`No Nexus Shown with Regard to Why Copaxone
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`40mg/mL Displaced other MS Drugsincluding
`Copaxone 20ME/ML. ce eecccsseseessessesssessasssssseerecenecessareareeees 42
`
`Patient and Physician ATU Surveys Do Not
`Establish Nexus... .csccecsccesesescesssessesesesseescsevecsessessvsesesrsscesens 43
`
`Teva’s Allegedly Limited Marketing and
`Promotion of Copaxone 40me/ML., .........cccceeceesecsetesteetencee A4
`
`6.
`
`7.
`
`VI. MISCELLANEOUB..........seceveneaeeesesaedueesceeseesecsesseeseessersseaecsateatsasestessenesaas 46
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`VII. EXHIBITS AND RESERVEDRIGHTS. .0...ccccccccsccsesccssesessestsscsscsceeeeeeees 46
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`Page 3 of 128
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`I.
`
`INTRODUCTION
`
`1.
`
`I, Professor Joel W. Hay, Ph.D., submit this Declaration on behalf of
`
`Mylan Pharmaceuticals Inc. and Amneal Pharmaceuticals LLC (Petitioners) in
`
`reply to the November 20, 2015 and November 25, 2015 Declaration of Henry G.
`
`Grabowski, Ph.D.
`
`(hereinafter “the Grabowski Declaration’)
`
`in the above-
`
`captioned case.
`
`I also respond to Dr. Grabowski’s testimony in his February 10,
`
`2016 deposition (hereinafter “the Grabowski Deposition”).
`
`2.
`
`{ understand that Dr. Grabowski submitted declarations in IPR2015-
`
`00643, IPR2015-00644, and IPR2015-00830 each labelled as Exhibit 2133.
`
`I also
`
`understand that each of the three Declarations submitted by Dr. Grabowski are
`
`substantively identical. Accordingly, I address each Declaration herein.
`
`3.
`
`A copy of my curriculum vitae 1s attached hereto as Exhibit A. A
`
`listing of legal cases where I havetestified at trial or by deposition since 2012 is
`
`attached hereto as Exhibit B. A list of materials relied upon is attached here to as
`
`Exhibit C.
`
`4.
`
`This Declaration discloses my opinions regarding, among other
`
`things, certain “secondary considerations” as they pertain to U.S. Patent Nos.
`
`8,232,250 (the “’250 patent”) (PR2015-00643), 8,399,413 (the “413 patent’)
`
`(IPR2015-00644), and 8,969,302 (the “302 patent”) (PR2015-00830).
`
`I refer to
`
`the pertinent patent below as the “patent at issue.”
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`5.
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`My opinion is that Dr. Grabowski has not established commercial
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`success of the Copaxone 40mg/mL formulation of glatiramer acetate or the patent
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`at issue.
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`It is also my opinion that none ofthe indicia of commercial successthat
`
`Dr. Grabowski discusses have any nexusto the claimsofthe patent at issue.
`
`6.
`
`I reserve the right to supplement this opinion as new or additional
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`information becomesavailable to me.
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`7.
`
`Iam being compensated for my testimony in the present case at my
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`standard rate of $900.00 per hour, plus any reasonable out-of-pocket expenses. No
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`payments to me are contingent upon the outcome ofthis or any other hearings or
`
`litigation or upon the nature of my opinions.
`
`II.
`
`BACKGROUND AND QUALIFICATIONS
`
`8.
`
`In 1974, I received my B.A. in Economics, summa cum laude, from
`
`Amherst College.
`
`I then went on to receive my M.A. in Economics in 1975 and
`
`my M.Ph. in Economics in 1976 from Yale University.
`| Ph.D. in Economics from Yale.
`
`In 1980, I received my
`
`9.
`I am a tenured Full Professor and Founding Chair of Pharmaceutical
`Economics and Policy in the School of Pharmacy, with joint appointments in the
`
`Department of Economics and at the Schaeffer Center for Health Policy and
`
`Economics at the University of Southern California (USC).
`
`I also served for 15
`
`years as the USC Project Coordinator for the Rand Evidence-Based Medicine
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`Practice Centers of Southern California funded by the U.S. Agency for Healthcare
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`Research and Quality.
`
`I am a Health Economics Research Scholar at the UCLA
`
`Center for Pediatric Vaccine Research.
`
`I am a founding member and founding
`
`Executive Board member of the American Society for Health Economics
`
`(ASHEcon) and a founding member and founding Executive Board memberofthe
`
`International Society of Pharmacoeconomics and Outcomes Research (ISPOR).
`10.
`From 1978 to 1980, I was an Assistant Research Professor at USC.
`
`Then from 1980 to 1984,
`
`I was an Assistant Professor in the Department of
`
`Behavioral Sciences and Community Health, and the Department of Economics at
`the University of Connecticut.
`I was also a Senior Policy Analyst with Project
`
`Hope from 1983 to 1985. Then from 1985 to 1992, I was a Senior Research
`
`Fellow at the HooverInstitution at Stanford University. In 1992, I was recruited to
`
`USC to found the Department of Pharmaceutical Economics and Policy.
`
`I have
`
`been a tenured USC faculty membersincethen.
`
`1i.
`
`[have authored or coauthored over 500 scientific abstracts, reports,
`
`and presentations, including 180+ peer-reviewedscientific articles in the fields of
`
`pharmaceutical markets, pharmaceutical economics, health economics, outcomes
`
`research, disease management, statistics, econometrics, epidemiology, and health
`
`care in journals including: American Journal of Cardiology, American Journal of
`
`Health-Systems Pharmacy; American Journal ofManaged Care; American Journal
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`of Public Health; Archives of Neurology; Cancer; CNS Drugs; Haemophilia;
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`Health Care Financing Review; Health Economics; Health Policy, JAMA; Journal
`
`of AIDS; Journal of the American Geriatrics Society; Journal of Business &
`
`Economic Statistics; Journal of Clinical Gastroenterology, Journal of Health
`
`Economics; Journal of Health Politics, Policy and Law; Journal of Human
`
`Resources; Journal of Managed Care and Specialty Pharmacy, Journal of the
`
`Royal Statistical Association, Medical Care; Pediatrics, and Value in Health.
`
`12.
`
`In addition to the hundreds of pharmacoeconomic studies that I have
`
`conducted,
`
`I have published numerous peer-reviewed scientific articles and
`
`abstracts on the cost effectiveness and the economic value of drugs, screening
`
`programs, and prevention programs.
`
`I recently co-authored a peer-reviewed
`
`scientific article on the economic value of newer medications in the treatment of
`
`Multiple Sclerosis (MS) and I have given formal presentations on this topic at
`
`3
`.
`.
`recent scientific conferences:
`
`3
`
`Ex. 1100, Xinke Zhang, Joel W. Hay & Xiaoli Niu, Cost Effectiveness of
`
`Fingolimod, Teriflunomide, Dimethyl Fumarate and Intramuscular Interferon-B1,
`
`in Relapsing-Remitting Multiple Sclerosis, 29 CNS Drugs 71 (2015); Ex. 1101,
`
`Xinke Zhang, MS & Joel W. Hay, PhD, Cost-effectiveness of Fingolimod,
`
`Teriflunomide, Dimethyl Fumarate and Intramuscular Interferon Beta-la in
`
`Relapsing-remitting Multiple Sclerosis, Poster, Monday Morning, PND20, ISPOR
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`13.
`
`In April 2015,
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`I was one of three invited outside experts who
`
`presented to the Directors and Staff of the Office of Medical Policy (Dr. Jonathan
`
`Jarow) and the Center for Drug Evaluation and Research (Dr. Robert Temple) at
`
`the U.S. Food and Drug Administration (FDA) on the regulation of economics
`
`claims for pharmaceutical products.
`
`[ also contributed on this topic as an invited
`
`speaker to the Academy of Managed Care Pharmacy Partnership Forum, FDAMA
`
`114: Improving the Exchange of Pharmacoeconomic Data in March 2016.
`
`14.
`
`J have served as a consultant to the U.S. Centers for Medicare and
`
`Medicaid Services, U.S. Agency for Healthcare Research and Quality, U.S. Centers
`
`for Disease Control and Prevention, U.S. Public Health Service, U.S. Food and
`
`Drug Administration (FDA), U.S. Environmental Protection Agency, Revenue
`
`Canada, Department of Justice Canada, Government of Hungary, Hong Kong
`
`Centre for Economic Research, Hong Kong Medical Executives Association,
`
`World Bank, California AIDS Commission, California Medi-Cal Drug Advisory
`
`19th Annual International Conference, May 2014, Montreal, Quebec, Canada; Ex.
`
`1102, Xinke Zhang, MS & Joel W. Hay, PhD, Cost-effectiveness of Fingolimod,
`
`Teriflunomide, Dimethyl Fumarate and Intramuscular Interferon Beta-la in
`
`Relapsing-remitting Multiple Sclerosis, American Society for Health Economics
`
`5th Biennial Conference, June 2014, Los Angeles, CA.
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`Board, County of San Diego Medically Indigent Adult Program, and County of
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`Sacramento Homeless Program.
`
`15.
`
`I have also written numerous health-related op-eds published in
`
`papers such as Los Angeles Times, New York Times, Newsday, Sacramento Bee,
`
`San Diego Union, San Francisco Chronicle, and Wall Street Journal.
`
`I have been
`
`interviewed numerous times on television and radio regarding health-related and
`
`drug-related policy issues,
`
`including media networks such as American Public
`
`Media, Australian Broadcasting Corporation, BBC, PBS, CBS, ABC, NBC, NPR,
`
`Fox News, C-SPAN,Al Jazeera and Air America.
`
`16.
`
`I have served as a member of the Expert Advisory Panel on Drug
`
`Utilization Review, United States Pharmacopeial Convention; an Executive
`
`Committee member for the federally sponsored Southern California Evidence-
`
`Based Medicine Practice Center; and a member of the JAMA Web Site HIV/AIDS
`
`Editorial Review Panel.
`
`I also just completed a third consecutive two-year term as
`
`a Study Section member for the Extramural Grants Review Program for the
`
`Agency for Healthcare Research and Quality of the U.S. Department of Health and
`
`Human Services.
`
`17,
`
`From 2004 to 2010, I was a founding member of the Health Policy
`
`Scientific Council of the International Society for Pharmacoeconomics and
`
`Outcomes Research (SPOR). From 2006 to 2010, I was founding Co-Chair of
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`ISPOR’s Drug Cost Task Force.
`
`In 2010, this Task Force published six peer-
`
`reviewed guideline papers on pharmaceutical costing methodology in the journal
`
`Value in Health, all of which I edited and co-authored.
`
`18.
`
`I served as the Founding Editor-in-Chief of Value in Health, the peer-
`
`reviewed scientific journal of ISPOR, from its 1998 inception until 2003.
`
`In its
`
`first scientific citation impact factor, Value in Health was ranked number one in
`
`two categories for the year 2004 by the ISI Journal Citation Reports® (JCR) with
`
`an impact factor of 3.657. Value in Health \ed all other journals listed in both the
`
`Health Care Sciences and Services category of the JCR Science Edition and in the
`Health Policy & Services category of the JCR Social Sciences Edition. These
`
`categories include all journals relating to health economics and pharmaceutical
`
`economics.
`
`19.
`
`I have provided sworn testimony and expert opinions in numerous
`
`legal cases and arbitration hearings on issues
`
`relating to pharmaceuticals,
`
`pharmaceutical markets and prescription medications.
`In particular,
`I have
`provided expert opinions on the commercial success for pharmaceutical products
`
`in numerous legal cases (see, e.g., Exhibit B).
`
`In various separate cases I have
`
`testified both for plaintiffs and for defendants in these and other legal matters.
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`II. RELEVANT LEGAL CONCEPTS
`
`20.
`
`understand that Patent Owner’ has the burden to show the existence
`
`of secondary considerations of non-obviousness.
`
`21.
`
`J understand that commercial success of a product is a “secondary
`
`consideration” that the PTO and the courts may consider in their determination of
`
`the validity of a patent.
`
`[I understand that a showing of commercial success can
`
`provide potential evidence that the invention disclosed in a patent was non-obvious
`
`at the time that the application for the patent was filed.
`
`22.
`
`Ihave been advised that commercial success is a legal construct that
`
`has been established through case law.
`
`I understand that the courts and the PTO
`
`consider a number of factors in determining whether a product is a “commercial
`
`success,” including, but not limited to: (1) sales; (2) profits; (3) total prescriptions;
`
`4
`
`I understand that Yeda Research & Development Co., Ltd.
`
`is the patent
`
`ownerof the patent at issue and that Teva Pharmaceuticals Industries Ltd. is the
`
`exclusive licensee of this patent. Teva Mandatory Notices, IPR2015-00643, Paper
`
`No. 6; IPR2015-00644, Paper No. 6;
`
`IPR2015-00830, Paper No. 5.
`
`I also
`
`understand that Teva Pharmaceuticals USA, Inc. is the holder of the New Drug
`
`Application for Copaxone, a drug for which the patents at issue are listed in the
`
`FDA’s Orange Book and that Teva Neuroscience, Inc. markets and sells Copaxone
`
`in the United States. Jd.
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`(4) market share in prescriptions and dollar shares; (5) rate and growth in market
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`share; (6) displacement of existing products in the market; and (7) the standing or
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`“rank” of the product in the market.
`
`J also understand that sales figures alone are
`
`not evidence of commercial success—rather, sales must be considered in light of
`
`the relevant market and the product’s return on investment.’
`
`I further understand
`
`that courts have found that one cannot merely rely on total sales alone to establish
`
`“commercial success.” These factors are consistent with my experience and
`
`understanding in evaluating the success of pharmaceutical products, but are by no
`
`means exhaustive.
`
`23.
`
`J understand further that in order for the commercial success of the
`
`product incorporating the patented technology to be relevant for the purpose of
`evaluating non-obviousness,
`there must be a demonstrable nexus between the
`
`claimed invention and the product’s commercial success.
`
`I understand this to mean
`
`that Patent Owners must show that any alleged commercial success is driven by
`
`and attributable to a patented feature as opposed to some other characteristic of the
`
`product or method of selling.
`
`I further understand that where commercial success
`
`°
`
`If one sold a billion hamburgers at $5 each, but gave each customer a $6
`
`rebate coupon, sales would be great, but profits and retumm on investment would be
`
`terrible.
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`can be attributed to characteristics of the invention that were already disclosed in
`
`the prior art, nonobviousnessis not shown.
`
`IV.
`
`SUMMARY OF OPINIONS
`
`24.
`
`Dr. Grabowski has not defined or adequately measured the relevant
`
`market for Copaxone 40mg/mL, which is crucial for an analysis of commercial
`
`success. A product’s commercial success can only be evaluated in the context of
`
`its relevant market. Dr. Grabowski has left key MS drugs out of his analysis, such
`
`as Tysabri, Novantrone, H.P. Acthar Gel and Prednisolone. Dr. Grabowski admits
`
`that “the majority of Tysabri prescriptions are not reported to IMS.” Ex. 2133 4 32
`
`n.14; see also Ex. 2113. Underreported data is also a problem for other MS drugs,
`
`such as Lemtrada andother injectables, including Copaxone 40mg/mL. The IMS°
`
`data that Dr. Grabowski used for his market analysis of MS drugs are known to be
`
`incomplete by billions of dollars and are thus unreliable. Dr. Grabowski relied
`
`primarily and extensively on IMS data,’ which do notcapture all sales of all MS
`
`6
`
`IMS Health is a third party company that compiles regular reports on sales
`
`and prescriptions of pharmaceutical products through surveys of pharmacies,
`
`physicians and insurance companies.
`
`3
`
`I understand the raw IMS data reviewed by Dr. Grabowski was not filed
`
`with the Board andis not of record in these proceedings.
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`drugs; many MSinjectable drugsare either not captured, or are poorly captured, by
`
`IMS.
`
`25.
`
`Regardless of the market considered, Dr. Grabowski also failed to
`
`establish commercial success of Copaxone 40mg/mL. Dr. Grabowski’s analysis of
`
`market sales and prescriptions is flawed even ignoring the incompleteness ofhis
`
`relied-upon IMS data.
`
`It is well known that IMS-reported branded drug sales data
`
`are based on publishedlist prices (Wholesale Acquisition Costs (WAC), Average
`
`Wholesale Prices (AWP)) and fail to capture price discounts, rebates, coupons and
`
`other (often confidential) price reductions that manufacturers use to generate sales,
`
`and are thus unreliable for calculating revenue sales and market shares. Such
`
`confidential rebates and discounts are knownto be as large as 61% for well-known
`
`branded medications such as Nexium,® and, based on my experience, may be even
`
`larger for other medications. This is highly relevant as it has been reported that
`
`Teva aggressively converted patients from Copaxone 20mg/mL to Copaxone
`
`8
`
`Ex. 1103, Matthew Herper, Inside The Secret World of Drug Company
`
`Rebates, Forbes Pharma & Healthcare, at 2-4 (May 10, 2012), available at
`
`http://onforb.es/l yu08HG.
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`AQmg/mL and secured preferred payer coverage during the time it was facing loss
`
`of patent protection for Copaxone 20 mg/mL.”
`
`26.
`Dr. Grabowski’s analysis also focuses on raw prescription data, using
`an aggregation of “Total Prescriptions” that ignores MS drug dosing differences.
`
`MS drugs have a variety of dosing protocols, ranging from one injection every
`
`three months to two pills per day, as well as different dosing strengths.
`
`Ignoring
`
`this disparity in prescription data presents a flawed analysis of commercial success.
`
`27. A key determinant of commercial success is whether the alleged
`
`commercial embodiment of the patent at
`
`issue, here Copaxone 40mg/mL,
`
`generated a reasonable return on investment
`
`(ROT). Dr. Grabowski failed to
`
`provide any analysis of Copaxone 40mg/mL’s cumulative profitability and ROI.
`
`He failed to consider the R&D costs of Copaxone 40mg/mL,
`
`including post-
`
`approval studies, any licensing royalties, and marketing and promotion costs,
`
`among other costs.
`
`°
`
`Ex. 1104 at 3-5, Thomas Reinke, MS Drug Going Generic Without Making
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`Waves, MANAGED CARE (June 2015), http://bit.ly/IKcyXdE(last visited Dec. 31,
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`2015); see also Ex. 1105, Carly Helfand, Why is Novartis’ Copaxone copy
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`lagging? It's all about coverage, analyst explains, Fierce Pharma at 1—2 (Sept. 11,
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`2015) available at http://bit.ly/lia8BNM.
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`28.
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`Dr. Grabowski also failed to demonstrate a nexus between the alleged
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`commercial success for Copaxone 40mg/mL and the claimsof the patent at issue.
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`I
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`understand that Petitioners’ experts, Dr. Green and Dr. Peroutka, have opined that
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`the claims of the patent at issue are obvious in view of and/or disclosed in the prior
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`art. Therefore, Dr. Grabowski’s evidence of alleged commercial successis tied not
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`to the claims of the patent at issue, but rather aspects of the claims disclosed in the
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`priorart.
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`29.
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`But most damaging to any nexus argument
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`that Dr. Grabowski
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`appears to make is that Teva launched Copaxone 40mg/mLat a price that was
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`lower than the price for Copaxone 20mg/mL. While fewer injections present an
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`obvious benefit to patients, Teva’s sales of Copaxone 40mg/mL were driven by
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`lowerprices and higher discounts, rebates, and favorable co-pay benefits. Offering
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`Copaxone 40mg/mL as the lowest cost glatiramer acetate formulation certainly
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`drives sales, but price discounting has no nexusto the claims of the patentat issue.
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`Dr. Grabowski did not show that Copaxone 40 mg/mL displaced MS products
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`other than the more expensive glatiramer acetate alternatives. And the evidence
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`shows that the oral MS products continued to displace Copaxone after the launch
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`of Copaxone 40mg/mL. Dr. Grabowski failed to break out the component of
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`demand for Copaxone 40mg/mL that relates to the fact that
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`it was the only
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`Copaxone product that Teva was heavily promoting, marketing and providing
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`generous rebates on, as opposed to the component of demand that relates to its
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`thrice-weekly dosing.
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`30.
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`Dr. Grabowski did not consider other possible causes of Copaxone
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`40mg/mL’s sales other than its thrice-weekly administration. Certainly a large
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`component of Copaxone 40mg/mL’s sales are driven by the fact that manypatients
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`wantedto take glatiramer acetate, the active ingredient in both Copaxone 20mg/mL
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`and 40mg/mL.
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`Indeed, the first item listed on Teva’s advertising for Copaxone
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`40mg/mL is the history of safety and efficacy of glatiramer acetate.'° In fact, as
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`Dr. Grabowski’s Exhibits show, Copaxone 40mg/mL — the less expensive
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`product — largely cannibalized existing sales of Copaxone 20mg/mL. See, e.g., Ex.
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`2112. Sales of Copaxone 40mg/mL due to patients and physicians comfort level
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`and experience with glatiramer acetate have no nexusto the claims ofthe patentat
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`issue.
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`31.
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`Furthermore, Dr. Grabowski did not consider whether Copaxone
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`40mg/mL’s sales are due to relative price changes for other MS drugs, formulary
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`changes, safety warnings or dispensingrestrictions on Lemtrada, Tysabri or other
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`MSdrugs that had nothing to do with Copaxone 40mg/mL’s characteristics. Dr.
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`Grabowski cites items in the Copaxone 40mg/mL marketing campaign that he
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`10 Ex.
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`1106,
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`3-Times-A-Week
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`Copaxone®
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`40
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`MG,
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`TEVA,
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`https://www.copaxone.com/about-copaxone/copaxone-40-mg.
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`Page 17 of 128
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`alleges to be relevant to the patent at issue (without explicitly showing nexus)
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`while completely failing to consider a large variety of other factors in the MS
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`pharmaceutical market that are far more relevant to Copaxone 40mg/mL’s raw
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`sales figures than Dr. Grabowski’s incomplete and unreliable IMS Health sales and
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`market share analysis.
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`VY.
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`OPINIONS AND THE REASONS AND BASES FOR MY OPINIONS
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`32.
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`In my opinion, Dr. Grabowski has not demonstrated commercial
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`success. Moreover, his alleged indicia of commercial success have no nexusto the
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`claims of the patent at issue.
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`33.
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`As detailed below, Dr. Grabowski’s analysis falls short because he
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`failed to consider which products are in the relevant market (see infra at Jf 34-38),
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`omitted important MS drugs from his analysis (see infra at J] 34-38), failed to
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`consider the aggressive price discounting strategy for Copaxone 40mg/mL (see
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`infra at J§] 53-59, 69-72), misinterpreted the limited IMS data provided to him by
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`Patent Owner (see infra at {J 39-43), and ignored differences in dosing protocols
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`and usages for different MS drugs ((see infra at {{] 44-31). Dr. Grabowski also
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`failed to consider the R&D costs for Copaxone 40mg/mL (see infra at {| 27, 62),
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`failed to address Teva’s ROI for Copaxone 40mg/mL (see infra at F§ 60-62), failed
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`to reliably consider MS drug promotional spending (see infra at J 66-72), and
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`failed to show that other crucial factors lacking any nexus to the patent at issue
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`S.
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`INC
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`If 1
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`HIB
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`099
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`PA
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`were not key to sales of Copaxone 40mg/mL, such as price discounts, price
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`rebates, patient coupons and payment assistance programs, FDA approval,
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`formulary changes for other MS drugs, MS drug safety concerns, the properties of
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`glatiramer acetate, or other market characteristics and/or characteristics of the
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`Copaxone 40mg/mL product or method ofselling that have no nexus to the patent
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`at issue (see infra at Fj 73-79).
`
`A.
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`DR. GRABOWSKI HAs NoT DEFINED THE RELEVANT MARKET
`
`1.
`
`Dr. Grabowski Makes No Attempt to Actually Define the
`Relevant Market and Excludes Key Drugs
`from His
`Analyses.
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`34.
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`Sales figures alone are not evidence of commercial success—rather,
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`sales must be considered in light of the relevant market. Dr. Grabowski’s opinion
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`is flawed because he sets forth no specific market definition, and neither lists nor
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`fully includes all of the likely competitors within that defined market. Further, Dr.
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`Grabowski admits that he simply accepted the limited IMS data that he was
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`provided by counsel. Ex. 2148 (Grabowski Dep.) at 35:20-36:6, 48:4~8, 51-7-24.
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`Thus, it is my opinion that Dr. Grabowski’s opinion is based on a highly flawed
`
`measure of sales for an incomplete list of MS drugs provided by IMS.
`
`35.
`
`Dr. Grabowskt’s analysis of monthly “Multiple Sclerosis Drugs: Share
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`of Total Prescriptions” does not include key MS drugs such as Tysabri. See Ex.
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`2113. Tysabri generates morethan $1 billion in sales amnually.'! Leaving out such
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`a key drug biases the context of Dr. Grabowski’s analysis. Because of the
`
`incompleteness of the analyzed data, Dr. Grabowski’s sales and prescription
`
`figures have no proper context in which to evaluate commercial success.
`
`36.
`
`Dr. Grabowski suggests that Copaxone 40mg/mL competes against all
`
`MS drugs, yet he failed to provide any sales data on Ampyra,'? Tysabri,
`
`Lemtrada, '? Novantrone, Prednisolone, or H.P. Acthar Gel and any relevant
`
`"
`
`According to Biogen, “TYSABRI® revenues were $1.9 billion compared to
`
`$2.0 billion in 2014. These results consisted of $1.1 billion in U.S. sales and $783
`
`million in sales outside the U.S. compared to $1.0 billion and $934 million,
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`respectively,
`
`in 2014.” Ex. 1107 at J, Press Release, Biogen, Biogen 2015
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`Revenues
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`Increase 11% to $10.8 Billion (Jan. 27, 2016),
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`available at
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`http://bit.ly/lLOXTI1x.
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`Ampyra is indicated on its label for improving walking in MSpatients. Ex.
`"2
`1139 at 1, Ampyra Prescribing Information. Dr. Grabowski failed to justify his
`
`exclusion of this and other MS drugs from his market definition.
`
`8
`
`Alemtuzumab (Lemtrada) was approved for RRMS in November 2014, but
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`Lemtrada is the same as alemtuzumab (Campath), which was available prior to
`
`November 2014 in the U.S. as a cancer drug, and was used off-label for RRMS
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`prior to that point. See, e.g., Ex. 1108, Multiple Sclerosis Trust, A to Z of MS
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`generics or alternative brands for these products, products with billions of dollars
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`of combined sales. Ex. 2133 (Grabowski Decl.) §] 20-32. Other times, Dr.
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`Grabowski suggests that the relevant market is comprised solely of Copaxone
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`40mg/mL and the other two glatiramer acetate drugs: Copaxone 20mg/mL and
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`Glatopa. See, e.g., Ex. 2121 (showing “net prescriptions flow” for only Copaxone
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`40mg/mL, Copaxone 20mg/mL and Glatopa); Ex. 2133 (Grabowski Decl.)
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`{4 33-39.
`37. Without any meaningfil explanation, Dr. Grabowski writes in his
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`Declaration that “Tysabri® is subject to a restricted distribution program so the
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`majority of Tysabri® prescriptions and are not reported to IMS.”"* That IMS does
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`
`
`Alemtuzumab (Lemtrada), http://bit.ly/1YnIfHQ (accessed June 2, 2015); Ex.
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`1109, Randy Osborne, Buzz Around Campath Proof-of-Concepttrial in MS, 27(1)
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`NATURE BIOTECHNOLOGY 6 (2009); Ex. 1110,
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`Jeffrey A. Cohen,
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`ef al.,
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`Alemtuzumab versus interferon beta la as first-line treatment for patients with
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`relapsing-remitting multiple sclerosis: a randomized controlled phase 3 trial, 380
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`LANCET 1819 (2012).
`
`4
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`Ex. 2133 932. n.14. One reason that IMS does not capture Tysabriis that for
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`safety reasonsit is distributed through a specialty pharmacy to manage its FDA-
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`mandated Risk Evaluation and Mitigation Strategies (REMS) program.
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`IMS does
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`an incomplete job of capturing drugs distributed through specialty pharmacies.
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`Page 21 of 128
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`not capture (or incompletely captures) sales data for Tysabri and other MS drugsis
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`no reason for Dr. Grabowski to draw faulty market inferences from IMS data on
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`which he chose to focus.
`
`38.
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`Because he failed to define the market, omitted entirely important
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`products, and relied on data known to be incomplete, Dr. Grabowski’s analysis is
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`invalid: it excludes Tysabri, which he admits is a direct competitor of Copaxone 40
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`mg/mL with annual U.S. sales in 2015 of $1 billion, and the IMS data understates
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`sales of many other MS drugs, particularly injectables. No meaningful conclusions
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`can be drawn from an analysis of such incomplete data.
`
`B.
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`Dr. GRABOWSKI FAILS TO USE ACCURATE AND RELIABLE MS DruG
`SALES DATA.
`
`39.
`
`As noted above, Dr. Grabowski
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`failed to provide sales data on
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`Tysabri, Novantrone, Lemtrada, Prednisolone, H.P. Acthar Gel, or generic and
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`alternative brand versions of any of these drugs,all likely competitors to Copaxone
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`Because Lemtrada also requires a REMSprogram,it is also likely missing from
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`the IMSdata for this reason. Novantrone, generic mitoxantrone, H.P. Acthar Gel,
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`' Prednisolone and other MS drugs are likely listed in other IMS therapeutic
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`categories because they have other treatment
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`indications besides MS and/or
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`specialty pharmacy distribution. Again, however, Dr. Grabowski did not provide
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`an explanation for his exclusion of these drugs from his relevant market analysis.
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`40mg/mL. This problem is further compoundedby the fact that many of the MS
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`drugs that he considers are injectables,
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`increasingly distributed by specialty
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`pharmacies and/or dispensed in physician offices.
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`Such sales are often not
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`captured in IMS audits.
`
`I am aware of this fact because IMS employees
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`themselves have told me about this data problem in detail. Moreover, IMS admits
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`this problem in its own drug utilization reports where it states that “estimated
`
`spending for recently launched [MS products] are understood to be under-reported
`by IMS.”
`|
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`40.
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`That IMS substantially underreports the use of drugs distributed by
`
`specialty pharmacies (as well as physician offi
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