UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE NAMENDA DIRECT PURCHASER
ANTITRUST LITIGATION
Case No. 1:15-cv-07488-CM-RWL
THIS DOCUMENT RELATES TO: FILED UNDER SEAL
All Direct Purchaser Actions
FOREST’S REPLY TO PLAINTIFFS’ RESPONSES AND OBJECTIONS
TO DEFENDANTS’ STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
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TABLE OF CONTENTS
Page
i
TABLE OF ABBREVIATIONS.................................................................................................... iv
PRELIMINARY STATEMENT AND GENERAL OBJECTIONS ...............................................1
BACKGROUND .................................................................................................................4I.
A. Alzheimer’s Disease ................................................................................................4
B. The ’703 Patent ........................................................................................................5
C. Patent Term Extension...........................................................................................15
D. FDA Approval and Launch of Namenda IR..........................................................33
E. FDA Approval and Launch of Namenda XR ........................................................35
F. Forest’s Marketing of Namenda ............................................................................39
G. Pediatric Exclusivity ..............................................................................................44
H. Lexapro ..................................................................................................................47
I. Teflaro/Ceftaroline.................................................................................................47
GENERIC SETTLEMENTS: NO REVERSE PAYMENTS.............................................48II.
A. Terms of the Settlement Agreements with the Generic Defendants......................48
B. Forest’s Search for a Secondary Supplier of Ceftaroline.....................................110
C. The Ceftaroline Supply Agreement with Orchid .................................................119
D. The Orchid Settlement Agreement ......................................................................130
E. The Lexapro Agreement with Alphapharm .........................................................140
F. The Deficit Reduction Act of 2005 and the Issue of “Best Price” Liability........149
G. Projected Benefits of Forest Amending the Lexapro Agreement........................168
Forest’s Projected Savings from Shifting Manufacturing of the Lexapro i.
Authorized Generic to Mylan ..................................................................180
Forest’s Projected Earnings Under a Possible Lexapro Amendment with ii.
Mylan .......................................................................................................202
a. Impact of Amending the Fixed 40% Profit Share to a Graduate
Profit Share Scale.........................................................................205
b. Impact of Extending The Minimum Term Of The Original
Lexapro Agreement From One To Two Years ............................209
c. Impact of Shifting Manufacturing Costs to Mylan ......................221
H. The Lexapro Amendment with Mylan.................................................................223
I. Mylan’s Threatened Antitrust Suit.......................................................................231
J. The Mylan Settlement Agreement .......................................................................237
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GENERIC SETTLEMENTS: NO CAUSATION............................................................244III.
A. The Namenda IR Patent Litigation Against Fifteen Generic Defendants............244
B. The Namenda Patent Litigation Claim-Construction Ruling...............................246
C. Settlements and Dismissals..................................................................................253
D. The Mylan Litigation ...........................................................................................260
Infringement.............................................................................................260i.
Anticipation..............................................................................................268ii.
Obviousness .............................................................................................272iii.
Enablement ..............................................................................................277iv.
E. No Evidence of Any Generics Planning an “At-Risk” Launch ...........................282
F. No Evidence that Forest Considered Launching a Namenda IR Authorized
Generic in the 2010-2012 Timeframe..................................................................291
G. No Evidence an Earlier Entry Date Was Considered for Settlements .................294
H. There is No Evidence that Generics Could Have Entered in 2012......................296
GENERIC SETTLEMENTS: NO CONSPIRACY..........................................................313IV.
A. The Namenda IR Patent Settlements Contained Generic Entry Early
Acceleration Clauses............................................................................................313
B. Generic Entry Early Acceleration Clauses Provided the Same Protection that
Generics Manufacturer Were Entitled to Under Hatch-Waxman........................317
C. No Evidence of a Conspiracy with or Between Generic Defendants ..................319
D. Settlements were in Each Generic Defendant’s Individual Best Interest ............324
E. No Motive for Generic Defendants to Conspire ..................................................328
F. The Generic Entry Early Acceleration Clauses Ensured Substantial Generic
Entry.....................................................................................................................333
HARD SWITCH: NO ANTITRUST INJURY ................................................................336V.
A. The June 2013 Launch of Namenda XR..............................................................336
B. Favorable Formulary Placement for Namenda XR .............................................352
C. Namenda XR Priced at a Discount to Namenda IR.............................................367
D. Projected Conversion Rates .................................................................................372
E. Actual Conversion Rates......................................................................................395
F. The February 2014 Planned-Withdrawal Announcement ...................................416
G. The Continued-Availability Announcement in June 2014 ..................................421
H. The Standstill Agreement ....................................................................................424
I. The December 2014 Injunction ...........................................................................425
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J. The January 2015 Continued-Availability Announcement .................................434
K. Subsequent Announcements and the Settlement with the New York Attorney
General.................................................................................................................447
L. Entry of Generic Namenda IR in July and October of 2015................................450
M. No Way to Identify if Any Patients Switched Because of the February 2014
Announcement .....................................................................................................456
N. No Way to Know if Patients Switched to Namenda XR for Other Reasons,
Including Lower Price, Formulary Placement, or Product Convenience ............472
O. No Way to Know How Many People Switched Back to Generic Namenda IR
From Namenda XR..............................................................................................495
P. The Injunction Undid Any Purported Harm of the February 2014
Announcement .....................................................................................................512
Q. The January 2015 Continued-Availability Announcement Undid Any Purported
Harm of the February 2014 Announcement ........................................................521
R. The New York Attorney General Confirmed the Effect of the Announcement
was Undone By Forest’s Compliance with the Injunction ..................................527
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TABLE OF ABBREVIATIONS
ABBREVIATION DESCRIPTION
SJM at __ Forest’s Memorandum of Law in Support of its Motion
for Summary Judgment (Nov. 17, 2017)
DRPAF ¶ __ Forest’s Objections and Responses to Plaintiffs’
Affirmative Statement (Jan. 5, 2018)1
DRSUF ¶ __ Forest’s Reply to Plaintiffs’ Responses and Objections to
Forest’s Statement of Undisputed Facts (Jan. 5, 2018)2
RSJM at __ Forest’s Reply Memorandum of Law in Support of its
Motion for Summary Judgment (Jan. 5, 2018)
O’Shaughnessy Decl. I Ex. Corrected Declaration of Kristen O’Shaughnessy in
Support of Forest’s Motion for Summary Judgment (Dec.
6, 2017)
O’Shaughnessy Decl. II Ex. Declaration of Kristen O’Shaughnessy in support of
Forest’s Reply Memorandum of Law in Support of its
Motion for Summary Judgment (Jan. 5, 2018)
Opp. at __ Direct Purchaser Class Plaintiffs’ Memorandum in
Opposition to Defendant’s Motion for Summary Judgment
(Dec. 11, 2017)
MTD at __ Forest’s Memorandum of Law in Support of its Motion to
Dismiss (Dec. 22, 2015)
PASOF ¶ __ Direct Purchaser Class Plaintiffs’ Affirmative Statement
of Material Facts in Opposition to Forest’s Motion for
Summary Judgment (Dec. 11, 2017)
1 Forest’s Objections and Responses to Plaintiffs’ Affirmative Statement is inclusive of
Plaintiffs’ Affirmative Statement of Material Facts in Opposition to Forest’s Motion for
Summary Judgment (Dec. 11, 2017)
2 Forest’s Reply to Plaintiffs’ Responses and Objections to Forest’s Statement of Undisputed
Facts is inclusive of Plaintiffs’ Responses and Objections to Defendants’ Statement of
Undisputed Facts in Support of Defendants’ Motion for Summary Judgment (Dec. 11, 2017) and
Defendants’ Statement of Undisputed Facts in Support of Defendants’ Motion for Summary
Judgment (Nov. 17, 2017).
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PRELIMINARY STATEMENT AND GENERAL OBJECTIONS
Pursuant to Rule 56.1 of the Local Rules of the United States District Court for the
Southern District of New York, Forest hereby submits its Objections to Plaintiffs’ Responses and
Objections to Defendants’ Statement of Undisputed Facts in Support of Defendants’ Motion for
Summary Judgment, dated December 11, 2017 (“Plaintiffs’ Responses”). Forest’s Objections
noted below are made solely in the context of Forest’s pending motion for summary judgment,
and shall not be construed and are not intended to effect a waiver of any objections to the
admissibility or use of any evidence identified below at trial or in any other proceeding, or as a
concession that any purported evidence identified by Plaintiffs is material or admissible at trial
for any purpose.
Plaintiffs have admitted that the following statements of fact are undisputed: ¶¶ 1-7, 12,
28, 37, 42, 44-45, 47, 49, 53, 58-61, 64-68, 70-74, 78, 99, 146-149, 151-152, 155-157, 161, 163,
168, 173, 177, 181-183, 185, 189, 195-206, 218, 244, 256-257, 259, 262, 267, 274, 281-283,
285, 349, 351-352, 367, 370, 380, 385, 399, 409-410, 413-414, 423, 432,-433, 435, 437-
447, 476, and 477.
Forest objects that Plaintiffs’ Responses repeatedly fail to actually dispute an asserted
fact, but instead include lengthy arguments and citations to other evidence that is not responsive
to the asserted fact. By way of example, and not limitation, Plaintiffs’ response to ¶ 52 (“Forest
launched Namenda XR in June 2013”) contains over a full page of argument espousing
Plaintiffs’ theory of the case, the purported reason that Forest launched Namenda XR in June
2013, and the extraneous argument that invalidation of the patent for Namenda XR would have
permitted generic entry for Namenda IR under the Namenda IR patent litigation settlement
agreements. Remarkably, Plaintiffs then include this exact fact, verbatim, in their separate
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Affirmative Statement of Material Facts in Opposition to Forest’s Motion for Summary
Judgment (the “Affirmative Statement”), at ¶ 19. That Plaintiffs would engage in such advocacy
here in response to a fact that they do not even dispute confirms that Plaintiffs are going well
beyond what is permitted under Rule 56.1 in an apparent attempt to use these Responses and
their Affirmative Statement to evade the page limitations set by this Court for Plaintiffs’
opposition to Forest’s motion for summary judgment. These type of non-responsive statements
that simply discuss additional facts or arguments pervade Plaintiffs’ Responses.
As this Court has held, where a statement of fact “is not in dispute, then a Rule 56.1
statement is not the place to contextualize or dispute the relevance of the statement. The brief
is.” Funnekotter v. Agric. Dev. Bank of Zimb., No. 13 Civ. 1917 (CM), 2015 U.S. Dist. LEXIS
73221, at *24-25 (S.D.N.Y. June 3, 2015) (McMahon, J.). Thus, all of Plaintiffs’ argument (and
any evidence that Plaintiffs cite, when they bother to do so) with respect to these paragraphs
should be ignored, and such statements of fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2); Meredith Corp. v. SESAC, LLC, 1 F. Supp. 3d 180, 186 n.3 (S.D.N.Y. 2014) (“many of
plaintiffs’ responses consist of improper argument or recitations of different facts; where
plaintiffs have not cited an evidentiary basis to context a factually supported statement by
[defendant], the Court has taken that statement as established”). Statements of fact that Plaintiffs
fail to truly dispute should be deemed admitted.
Forest objects to many of the paragraphs in Plaintiffs’ Responses on evidentiary grounds,
including the grounds that certain paragraphs are argumentative and/or impermissible legal
conclusions. See Creighton v. City of New York, No. 12 Civ. 7454, 2017 U.S. Dist. LEXIS
21194, at *12 n.11 (S.D.N.Y. Feb 14, 2017) (citing Wojcik v. 42nd St. Dev. Project, Inc., 386 F.
Supp. 2d 422, 448 n.5 (S.D.N.Y. 2005)) (holding the district court properly refused to consider
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statements in DPPs’ 56.1 statement that were legal conclusions in the “guise of an undisputed
statement of fact”).
Forest objects to many of the paragraphs in Plaintiffs’ Responses because Plaintiffs deny
a fact, in whole or in part, without “citation to evidence which would be admissible, set forth as
required by Fed. R. Civ. P. 56(c).” Rule 56.1(d). Under Rule 56(e)(2) of the Federal Rules of
Civil Procedure, Forest respectfully requests that statements be deemed admitted where
Plaintiffs’ fail to cite admissible evidence to dispute the statements.
Forest objects to many of the paragraphs in Plaintiffs’ Responses to the extent they cite to
evidence that does not dispute the proposed fact sufficiently to create a triable issue. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986) (“The mere existence of a scintilla of
evidence in support of the plaintiff’s position will be insufficient; there must be evidence on
which the jury could find for the plaintiff.”). Forest respectfully requests that statements be
deemed admitted where evidence cited by Plaintiffs does not actually dispute the statement.
Forest objects to many of the paragraphs in Plaintiffs’ Responses that purport to dispute a
statement of fact solely on the basis of opinions by Plaintiffs’ purported experts that are
untethered to the evidence in the case, and therefore cannot create a genuine issue of fact
sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997)
(“[A]n expert’s report is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v.
British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony
without a factual foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256
(2d Cir. 2001); see also Brooke Grp. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 242
(1993) (“When an expert opinion is not supported by sufficient facts to validate it in the eyes of
the law, or when indisputable record facts contradict or otherwise render the opinion
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unreasonable, it cannot support a jury’s verdict.”). Statements of fact should be admitted where
the purported “dispute” as to the statement is premised only on speculative opinion testimony
offered by Plaintiffs’ putative experts.
Forest reproduces Plaintiffs’ Responses and Objections to Defendants’ Statements
verbatim (although Plaintiffs’ Preliminary Statement has been removed to avoid confusion), and
identifies Forest’s Objections to Plaintiffs’ Responses, if any, below the text of each statement of
fact.
BACKGROUNDI.
A. Alzheimer’s Disease
1. Alzheimer’s is a progressive, irreversible, and degenerative disease of the brain
for which there is no cure.
Defendants’ Evidence: Ex. 1, FRX-AT-01779611, October 19, 2014 Declaration of
Steven H. Ferris (“Ferris Decl.”), ¶ 11.
Plaintiffs’ Admissions: First Amended Class Action Complaint (Oct. 13, 2015) (“Am.
Compl.”), Case No.: 15-cv-7488, ECF No. 26, ¶ 91.
Response: Admitted.
2. All current therapies treat the symptoms of Alzheimer’s but do not reverse its
effects.
Defendants’ Evidence: Ex. 1, Ferris Decl. ¶ 13.
Plaintiffs’ Admissions: Am. Compl. ¶ 92.
Response: Admitted.
3. Alzheimer’s affects over five million Americans and is the sixth leading cause of
death in the United States.
Defendants’ Evidence: Ex. 1, Ferris Decl. ¶ 11.
Plaintiffs’ Admissions: Am. Compl. ¶ 91.
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Response: Admitted.
4. As the population continues to live longer, the number of Americans living with
Alzheimer’s is expected to triple by 2050.
Plaintiffs’ Admissions: Am Compl. ¶ 91.
Response: Admitted.
5. Early symptoms of Alzheimer’s include short-term memory loss, difficulty
performing familiar tasks, disorientation, trouble with language, and mood swings. Patients also
develop neuropsychiatric problems, including apathy, depression, agitation and delusions. As
the disease progresses, patients may be unable to walk or to recognize and communicate with
family members and friends.
Defendants’ Evidence: Ex. 1, Ferris Decl. ¶ 11.
Plaintiffs’ Admissions: Am. Compl. ¶ 91.
Response: Admitted.
6. As the disease worsens, patients are unable to function independently, becoming
increasingly dependent on caregivers.
Defendants’ Evidence: Ex. 1, Ferris Decl. ¶ 11.
Plaintiffs’ Admissions: Am. Compl. ¶ 91.
Response: Admitted.
7. In the final stages of the disease, patients require skilled nursing and intensive
support care.
Defendants’ Evidence: Ex. 1, Ferris Decl. ¶ 11.
Response: Admitted.
B. The ’703 Patent
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8. U.S. Patent No. 5,061,703 (“’703 Patent”) issued on October 29, 1991 and is
entitled “Adamantane Derivatives in the Prevention and Treatment of Cerebral Ischemia.”
Public Documents: Ex. 2, U.S. Patent No. 5,061,703.
Response: Admitted. ¶ 8, however, is not material for purposes of summary judgment
because this purported fact is not cited anywhere in Defendants’ Memorandum In Support of
their Motion for Summary Judgment (ECF No. 435).
9. Plaintiffs’ Admissions: Ex. 2, Sept. 15, 2017 Expert Report of George W.
Johnston (“Johnston Rep.”) ¶ 29.
Response: This paragraph was numbered in error; Defendants corrected that
typographical error in its Corrected Statement of Facts and then skipped paragraph 9.
10. When issued, claim 1 of the ’703 patent covered:
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Public Documents: Ex. 2, ’703 Patent.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 36.
Response: Admitted that original Claim 1 is accurately reproduced above. ¶ 10,
however, is not material for purposes of summary judgment because this purported fact is not
cited anywhere in Defendants’ Memorandum In Support of their Motion for Summary Judgment
(ECF No. 435).
11. The chemical formula in claim 1 covers memantine.
Public Documents: Ex. 2, ’703 Patent.
Response: Admitted, although it is ambiguous as to whether the statement refers to
original Claim 1 or reexamined Claim 1. The chemical formula in both claims, however,
encompasses memantine. ¶ 11 is not material for purposes of summary judgment because this
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purported fact is not cited anywhere in Defendants’ Memorandum In Support of their Motion for
Summary Judgment (ECF No. 435).
12. The ’703 patent was assigned to Merz + Co. GmbH & Co., which, in turn,
licensed the ’703 patent to Forest.
Public Documents: Ex. 2, ’703 Patent.
Defendants’ Evidence: Ex. 4, FRX-AT-01710620, Merz-Forest Supply and Cooperation
Agreement, dated June 28, 2000; Ex. 5, McKelvie Rep. ¶¶ 45, 51.
Plaintiffs’ Admissions: Am. Compl. ¶ 93; In re Namenda Direct Purchaser Antitrust
Litigation, Statement of Material Facts ISO DPPs’ Motion for SJ Count One (S.D.N.Y.
Feb. 16, 2017) (“DPPs’ Statement of Material Facts ISO Count One”), 15-cv-7488, ECF
No. 137, ¶ 3; In re Namenda Direct Purchaser Antitrust Litigation, Statement of Material
Facts ISO DPPs’ Motion for SJ Count Three (S.D.N.Y. Feb. 16, 2017) (“DPPs’
Statement of Material Facts ISO Count Three”), 15-cv-7488, ECF No. 141, ¶ 3.
Response: Admitted.
13. On August 18, 2004, Forest filed for reexamination request for the ’703 patent.
Public Documents: Ex. 7, Application No. 90/007,176, (“’703 Reexamination File
History”), available at https://portal.uspto.gov/pair/PublicPair
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 47.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 41.
Response: Denied. Plaintiffs object to this statement as inaccurate. The request for
reexamination identifies Merz Pharma GmbH & Co. (and not Forest) as “the person requesting
reexamination.” O’Shaughnessy Decl. Ex. 7 at 2, 4.
Forest’s Objection: Forest agrees that the fact should say Merz Pharma GmbH & Co.
filed for reexamination and not Forest, although this distinction is immaterial as the relevant
information is that reexamination of the ’703 patent was requested. It is thus undisputed that
“On August 18, 2004, Merz Pharma GmbH & Co. filed for reexamination request for the ‘703
patent.”
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14. With its application, Forest disclosed several articles for the U.S. Patent and
Trademark Office (“PTO”) to consider in deciding whether the claims were patentable,
including:
Japanese Patent Publication No. JP 58-4718
Rote Liste, 63-008 (1986)(“Rote Liste”)
Marcea et al., Therapiewoche, 38:3097-3100 (1988) (“Marcea”)
Ambrozi et al., Pharmacopsychiatry, 21:144-146 (1988) (“Ambrozi”)
Fleischhacker et al., Progress in Neuro-psychopharmacology and Biological
Psychiatry, 10:87-93 (1986) (“Fleischhacker”)
Forest stated in its reexamination application that those references raised a
substantial new question of patentability regarding 35 U.S.C. § 102 (anticipation)
and 35 U.S.C. § 103 (obviousness).
Public Documents: Ex. 7, ’703 Reexamination File History at 4-5, 11.
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 48.
Plaintiffs’ Admissions: See also, Ex. 3, Johnston Rep. ¶ 42.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
inaccurate and potentially misleading. Forest did not disclose any articles to the PTO; Forest did
not make any statements in the reexamination. For purposes of clarity, Merz did not disclose the
above-identified articles in connection with its originally-filed patent application; Merz disclosed
the above-identified articles in connection with its request for reexamination of the ’703 Patent.
O’Shaughnessy Decl. Ex. 7 at 4-5. Further, neither Forest nor Merz affirmatively stated in the
reexamination application that any reference actually raised a substantial new question of
patentability; instead, Merz merely raised the possibility that such a substantial new question of
patentability may exist: “A substantial new question of patentability may be deemed to exist
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under 35 U.S.C. § 102 or § 103 with respect to claims 1-3, 6, 8, and 10-13 of the ’703 patent....”
Id. at 11 (emphasis added); see also id. at 8 (“JP ’718 may raise a substantial new question of
patentability as to whether claim 1 is anticipated or obvious.”) (emphasis added).
Forest’s Objection: Forest agrees that the fact should say Merz Pharma GmbH & Co.
disclosed articles to the PTO and not Forest, although this distinction is immaterial as the
relevant information is that the articles were disclosed to the PTO. DPPs’ response does not
otherwise provide any evidentiary basis to contest the statement, but instead attempts to
“contextualize or dispute the relevance of the statement,” which is an improper use of a Rule
56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
15. The PTO opened reexamination proceedings and, on March 10, 2005, issued an
initial rejection of all the claims, finding them unpatentable, under 35 U.S.C. § 102 in view of
Rote Liste, Marcea, Ambrozi, and Fleischhacker.
Public Documents: Ex. 7, ’703 Reexamination File History at 65-67.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 42.
Response: Admitted that the PTO granted Merz’s Request for Reexamination and
that on March 10, 2005, the PTO rejected all original claims (except for Claims 4, 5, 7, and 9,
which were not asserted in the Namenda patent litigation) as unpatentable under 35 U.S.C. §
102(b) as being anticipated by each of Rote Liste, Marcea, Ambrozi, and Fleischhacker.
16. In response, Forest argued that its claims were patentable notwithstanding the
disclosure of the references the PTO cited.
Public Documents: Ex. 7, ’703 Reexamination File History at 78-90.
Response: Denied. The evidence cited by Defendants does not support the statement.
Merz and Forest did not argue that the original claims were patentable notwithstanding Rote
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Liste, Marcea, Ambrozi, and Fleischhacker. Instead, Merz only argued that the amended claims
(as amended at O’Shaughnessy Decl. Ex. 7 at 73-78) were patentable over the cited prior art.
See O’Shaughnessy Decl. Ex. 7 at 81-88 (“The Rote Liste does not disclose the administration of
memantine to a patient ‘diagnosed with Alzheimer’s disease,’ as required by amended claim 1”;
“Marcea does not disclose administering memantine to a patient ‘diagnosed with Alzheimer’s
disease,’ as required by amended claim 1”; “Ambrozi does not disclose administering memantine
to a patient ‘diagnosed with Alzheimer’s disease,’ as required by amended claim 1”; “Amended
claim 1 ... recite[s] oral administration of the claimed compounds. Fleischhacker discloses only
intravenous administration”) (emphases added).
Forest’s Objection: Forest agrees that in response to the finding referenced above in ¶
15, Forest/Merz argued that the amended claims were patentable notwithstanding Rote Liste,
Marcea, Ambrozi, and Fleischhacker. Thus, this fact is undisputed.
17. Forest amended its claims to further distinguish them from the information
disclosed in the references.
Public Documents: Ex. 7, ’703 Reexamination File History at 73-78.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶¶ 42, 45.
Response: Denied. The evidence cited by Defendant does not support the statement.
Merz and Forest did not argue that the original claims were patentable notwithstanding Rote
Liste, Marcea, Ambrozi, and Fleischhacker. Instead, Merz only argued that the amended claims
(as amended at O’Shaughnessy Decl. Ex. 7 at 73-78) were patentable over the cited prior art.
See O’Shaughnessy Decl. Ex. 7 at 81-88 (“The Rote Liste does not disclose the administration of
memantine to a patient ‘diagnosed with Alzheimer’s disease,’ as required by amended claim 1”;
“Marcea does not disclose administering memantine to a patient ‘diagnosed with Alzheimer’s
disease,’ as required by amended claim 1”; “Ambrozi does not disclose administering memantine
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to a patient ‘diagnosed with Alzheimer’s disease,’ as required by amended claim 1”; “Amended
claim 1 ... recite[s] oral administration of the claimed compounds. Fleischhacker discloses only
intravenous administration”) (emphases added).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
18. In response, the PTO withdrew the 35 U.S.C. § 102 anticipation rejection. The
PTO issued a reexamination certificate on November 7, 2006. The reexamination certificate list
Marcea, Ambrozi, Fleischhacker, Tempel, Memantine in organic brain syndrome: Can
disturbed social and self-care behaviors be improved?, Therapiewoche 39:946-952 (1989)
(“Tempel”), and Fünfgeld et al., Psychopharmacology, XVIth C.I.N.P. Congress, Munich,
27.23.08 (Aug. 15 18, 1988) (“Fünfgeld”) as references that the PTO considered during
reexamination.
Public Documents: Ex. 7, ’703 Reexamination File History at 118-19, 123-25
(Information Disclosure Statement submitted by Forest with examiner initials indicating
consideration of Fünfgeld and Tempel), 174 (“[T]he four cited references [Rote Liste,
Ambrozi, Marcea, and Fleischhacker] do not teach the oral administration of
[memantine] is effective or the prevention or treatment of cerebral ischemia in a patient
diagnosed with Alzheimer’s disease.”), 176-77 (listing as “References Cited” Fünfgeld,
Tempel, Marcea, Ambrozi, and Fleischhacker).
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 48.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 46.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
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inaccurate and potentially misleading. The PTO made a “Final Rejection” on August 9, 2005 in
which the Examiner noted that he was withdrawing the § 102 anticipation rejection because “the
prior art does not actually teach any of the adamantane derivatives to treat cerebral ischemia and
Alzheimer’s disease together.” O’Shaughnessy Decl. Ex. 7 at 119 (emphasis added). On
September 26, 2005, an interview was held with the Examiner in which Merz’s patent attorney
discussed “[t]he prior art in general.” O’Shaughnessy Decl. Ex. 7 at 131. Thereafter, a notice of
intent to issue ex parte reexamination certificate issued on September 27, 2005. Plaintiffs admit
that the reexamination certificate issued on November 7, 2006. Plaintiffs admit that Marcea,
Ambrozi, Fleischhacker, Tempel, and Fünfgeld are listed under “References Cited” on the face
of the reexamination certificate for the ’703 Patent.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize . . . the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
19. As amended, reexamined claim 1 of the ’703 patent reads:
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The italicized portions of the amended claims were added during reexamination.
Public Documents: Ex. 7, ’703 Patent; Reexamination File.
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 67.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. Ex. G.
Response: Admitted that reexamined Claim 1 is accurately reproduced above. This
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statement however, is not material for purposes of summary judgment because this purported
fact is not cited anywhere in Defendants’ Memorandum In Support of their Motion for Summary
Judgment (ECF No. 435).
20. The ’703 patent was originally set to expire on April 11, 2010.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 9; DPPs’
Statement of Material Facts ISO Count Three ¶ 9.
Response: Admitted. This statement, however, is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
C. Patent Term Extension
21. On July 10, 1989, Merz filed an IND No. 33,392 for memantine hydrochloride
(“IND ‘392”).
Defendants’ Evidence: Ex. 182, Investigational New Drug Application (Jul. 10, 1989),
FRX-AT-02177815 at 7819-7999.
Response: Admitted. This statement, however, is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
22. IND ‘392 became effective on February 7, 1990 and remained active until
January 13, 1994, when Merz requested inactivation of IND ‘392.
Defendants’ Evidence: Ex. 183, Request for Inactivation of IND ‘392 (Jan. 13, 1994),
FRX-AT-04248226 at 8302-8303.
Response: Denied. Plaintiffs object to this statement as incomplete and misleading.
In its initial request for patent term extension for the ’703 Patent, filed on December 9, 2003,
Forest stated that IND ‘392 “became effective on October 9, 1997.” O’Shaughnessy Decl. Ex.
183 at FRX-AT-04248233, 35 (PTE Application). This October 9, 1997 effective date for IND
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‘392 caused Forest to represent to the Patent Office that the “testing phase” was 1,897 days long
and that there were zero days during that 1,897 day-long “testing phase” when the Applicant
failed to act with due diligence. Id. at FRX-AT-0428238-9. Years later, on May 16, 2007, the
FDA determined that the effective date for IND ‘392 was actually February 7, 1990. Ludwig Ex.
8 at 1-2, attached as Exhibit 289 to the Declaration of Dan Litvin (“Litvin Decl.”) (Axelrad
5/16/07 Letter). This caused the “testing phase” to expand by 2,802 days—from 1,897 days to
4,699 days. O’Shaughnessy Decl. Ex. 185 at FRX-AT-02399094 (Federal Register). Forest
never contested the FDA’s determination that the effective date for IND ‘392 was February 7,
1990. Litvin Decl. Ex. 365, Ludwig Ex. 9 at FRX-AT-03877514 (Axelrad 2/21/08 Letter) Litvin
Decl. Ex. 350, Waiver of Reconsideration of Notice of Final Determination at 1-2. Nor did
Forest amend or supplement its request for patent term extension for the ’703 Patent to address
the FDA’s determination of a February 7, 1990 effective date and resulting expanded testing
phase. Litvin Decl. Ex. 315, Rosen Dep. (Oct. 26, 2017) at 133:7-12, 134:17-135:2, 135:16-19.
This material failure to provide a complete patent term application and disclose material
information during the expanded testing phase (i.e., Forest never supplemented its application to
describe the applicant’s diligence or identify significant activities during the extra 2,802 days of
the expanded testing phase) serves as the basis for Mylan’s and Plaintiff’s patent term extension
invalidity theories. O’Shaughnessy Decl. Ex. 3 at 73-82 (Johnston 9/15/17 Report). Further, ¶
22 is not material for purposes of summary judgment because this purported fact is not cited
anywhere in Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF
No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
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should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
23. Merz then requested reactivation on September 5, 1997, and IND ‘392 was
reactivated shortly thereafter on October 9, 1997.
Defendants’ Evidence: Ex. 183, Request for Reactivation of IND ‘392 (Sep. 5, 1997),
FRX-AT-04248226 at 8305-8307.
Response: Admitted. This statement, however, is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
24. Throughout 1989-1997, Merz conducted clinical studies outside the United States.
Defendants’ Evidence: Ex. 184, Integrated Summary of Safety (Dec. 6, 2002) (“List of
Completed Studies”), FRX-AT-02300444 at 0524-0548.
Undisputed Record Evidence: Ex. 166, Pretrial Order, Exhibit 11 ¶¶ 271-277.
Response: Denied. Plaintiffs’ object to this statement as not material. Whether Merz
conducted foreign clinical studies from 1989 to 1997 is irrelevant to Mylan’s and Plaintiff’s
patent term extension invalidity theories. Per statute, “a determination that a patent is eligible for
extension may be made by the Director solely on the basis of the representations contained in the
application for the extension.” 35 U.S.C. § 156(e)(1) (emphasis added); Litvin Decl. Ex. 315,
Rosen Dep. (Oct. 26, 2017) at 73:23-74:16. None of Defendants’ supporting evidence (i.e.,
O’Shaughnessy Decl. Exs. 184 or 166) was included in Forest’s application for patent term
extension for the ’703 Patent. O’Shaughnessy Decl. Ex. 183 (PTE Application). As such, it is
immaterial. In addition, the mere existence of studies over a particular timeframe does not
establish that those studies were conducted “throughout” the timeframe. Further, ¶ 24 is not
material for purposes of summary judgment because this purported fact is not cited anywhere in
Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
This statement is also denied as utilizing evidence not included by either Forest or Mylan
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in the Pretrial Order in the Namenda patent litigation. In the Pretrial Order, Forest pointed to
only two clinical studies outside the United States as supporting its diligence: (1) Study No.
MRZ 90001-9104, a French study that took place between October 12, 1992 and July 18, 1994;
and (2) Study No. MRZ 90001-9403, a Latvian study that took place between November 1994
and July 1995. O’Shaughnessy Decl. Ex. 166 at MNAT_0000166-7 (Pretrial Order); Litvin
Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 122:1-20. By not including other foreign clinical
studies in the Pretrial Order (including the studies Forest now cites from O’Shaughnessy Decl.
Ex. 184 at FRX-AT-02300524-48), Forest waived its right to present them at trial or use them as
the basis for its summary judgment motion.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
25. Many studies were conducted overseas during the period when IND ‘392 was
inactive, from January 1994 to September, 1997.
Defendants’ Evidence: Ex. 184, List of Completed Studies, FRX-AT-02300444 at 0524-
0548.
Undisputed Record Evidence: Ex. 166, Pretrial Order, Exhibit 11 ¶¶ 271-277.
Response: Denied. Plaintiffs object to this statement as not material. Whether Merz
conducted foreign clinical studies from January 1994 to September 1997 is irrelevant to Mylan’s
and Plaintiff’s patent term extension invalidity theories. Per statute, “a determination that a
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patent is eligible for extension may be made by the Director solely on the basis of the
representations contained in the application for the extension.” 35 U.S.C. § 156(e)(1) (emphasis
added); Litvin Decl. Ex. 315, Rosen Dep. (Oct. 26, 2017) at 73:23-74:16. None of Forest’s
supporting evidence (i.e., O’Shaughnessy Decl. Exs. 184 or 166) was included in Forest’s
application for patent term extension for the ’703 Patent. O’Shaughnessy Decl. Ex. 183 (PTE
Application). As such, it is immaterial. Further, ¶ 25 is not material for purposes of summary
judgment because this purported fact is not cited anywhere in Defendants’ Memorandum In
Support of their Motion for Summary Judgment (ECF No. 435).
Plaintiff’s also object to this statement as utilizing evidence not included by either Forest
or Mylan in the Pretrial Order. In the Pretrial Order in the Forest-Mylan litigation, Forest pointed
to only two clinical studies outside the United States: (1) Study No. MRZ 90001-9104, a French
study that took place between October 12, 1992 and July 18, 1994; and (2) Study No. MRZ
90001-9403, a Latvian study that took place between November 1994 and July 1995.
O’Shaughnessy Decl. Ex. 166 at MNAT_0000166-7 (Pretrial Order); Litvin Decl. Ex. 319, Ryan
Dep. (Sept. 7, 2017) at 122:1-20. By not including other foreign clinical studies in the Pretrial
Order (including the studies Forest now cites from O’Shaughnessy Decl. Ex. 184 at FRX-AT-
02300524-48), Forest waived its right to present them at trial or use them as the basis for its
summary judgment motion.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
26. For example, MRZ 90001-9104 was conducted in France between October 1992
and July 1994, and MRZ 90001-9403 was conducted in Latvia from November 1994 to July
1995.
Defendants’ Evidence: Ex. 184, List of Completed Studies, at FRX-AT-02300525, 0528;
Ex. 166, Pretrial Order, Exhibit 11 ¶¶ 271-277.
Response: Denied and not material. Whether Merz conducted foreign clinical studies
in France between October 1992-July 1994 and in Latvia from November 1994-July 1995 is
irrelevant to Mylan’s and Plaintiff’s patent term extension invalidity theories. Per statute, “a
determination that a patent is eligible for extension may be made by the Director solely on the
basis of the representations contained in the application for the extension.” 35 U.S.C. §
156(e)(1) (emphasis added); Litvin Decl. Ex. 315, Rosen Dep. (Oct. 26, 2017) at 73:23-74:16.
Neither Study No. MRZ 90001-9104 nor Study No. MRZ 90001-9403 was included in Forest’s
application for patent term extension for the ’703 Patent. O’Shaughnessy Decl. Ex. 183 (PTE
Application). As such, it is immaterial. Further, ¶ 26 is not material for purposes of summary
judgment because this purported fact is not cited anywhere in Defendants’ Memorandum In
Support of their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
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P. 56(e)(2).
27. Forest conducted numerous other non-US studies, including MRZ 90001-9105,
conducted in France between June 1993 and June 1996, and MRZ 90001-9202, conducted in the
United Kingdom from February 1994 to October 1998.
Defendants’ Evidence: Ex. 184, List of Completed Studies, at FRX-AT-02300528, 0526.
Response: Denied and not material. Whether Merz conducted foreign clinical studies
in France between June 1993-June 1996 and in the United Kingdom from February 1994-
October 1998 is irrelevant to Mylan’s and Plaintiff’s patent term extension invalidity theories.
Per statute, “a determination that a patent is eligible for extension may be made by the
Director solely on the basis of the representations contained in the application for the
extension.” 35 U.S.C. § 156(e)(1) (emphasis added); Litvin Decl. Ex. 315, Rosen Dep. (Oct. 26,
2017) at 73:23-74:16. Neither Study No. MRZ 90001-9105 nor Study No. MRZ 90001-9202 was
included in Forest’s application for patent term extension for the ’703 Patent. O’Shaughnessy
Decl. Ex. 183 (PTE Application). As such, it is immaterial. Further, ¶ 27 is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
The statement is further denied as utilizing evidence not included by either Forest or
Mylan in the Pretrial Order. In the Pretrial Order in the Forest-Mylan litigation, Forest pointed to
only two clinical studies outside the United States: (1) Study No. MRZ 90001-9104, a French
study that took place between October 12, 1992 and July 18, 1994; and (2) Study No. MRZ
90001-9403, a Latvian study that took place between November 1994 and July 1995.
O’Shaughnessy Decl. Ex. 166 at MNAT_0000166-7 (Pretrial Order); Litvin Decl. Ex. 319, Ryan
Dep. (Sept. 7, 2017) at 122:1-20. By not including other foreign clinical studies in the Pretrial
Order (including the studies Forest now cites from O’Shaughnessy Decl. Ex. 184 at FRX-AT-
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02300524-48), Forest waived its right to present them at trial or use them as the basis for its
summary judgment motion.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
28. On December 9, 2003, Forest submitted a Request for Extension of Patent Term
under 35 U.S.C. § 156 for the ’703 patent (the “PTE Application”) to the PTO.
Defendants’ Evidence: Ex. 183, Request for Extension of Patent Term (Dec. 9, 2003),
FRX-AT-04248226.
Response: Admitted.
29. In the PTE Application, pursuant to 37 C.F.R. § 1.740(a)(12), Forest provided a
Statement as to the Length of Extension Claimed in accordance with 37 C.F.R. § 1.775.
Defendants’ Evidence: Ex. 183, Request for Extension of Patent Term (Dec. 9, 2003),
FRX-AT-04248226.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete. While true that the PTE Application includes a Statement as to the Length of
Extension Claimed in accordance with 37 C.F.R. § 1.775, Forest neglects to mention its
representation in that statement that the “testing phase” began on October 9, 1997 and ended on
December 19, 2002 (a total of 1,897 days). O’Shaughnessy Decl. Ex. 183 at FRX-AT-
04248238-40 (PTE Application). Forest also neglects to mention its representation in that
statement that there were exactly zero days during that 1,897 days “testing phase” during which
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the Applicant failed to act with due diligence. Id. Forest also neglects to mention that it never
amended or corrected its statement when the FDA subsequently expanded the “testing phase” by
2,802 days—from 1,897 days to 4,699 days. Further, ¶ 29 is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
30. In that statement, Forest listed the effective date of IND ‘392 as October 9, 1997
(the date on which FDA reactivated IND ‘392), and claimed an extension of 1,250 days
(approximately 3.5 years).
Defendants’ Evidence: Ex. 183, Request for Extension of Patent Term (Dec. 9, 2003),
FRX-AT-04248226 at 8238-8240.
Response: Admitted. This statement, however, is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
31. Forest included in its PTE Application a detailed chronology of IND ‘392 in the
Submission Log.
Defendants’ Evidence: Ex. 183, Request for Extension of Patent Term (Dec. 9, 2003),
FRX-AT-04248226 at 8309-58.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
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incomplete and misleading. While the PTE Application included a “chronology of regulatory
review” that Forest represented to contain a description of the “significant activities undertaking
by the marketing applicant during the applicable regulatory review period with respect to the
approved product and the significant dates applicable to such activities,” that chronology was
neither “detailed” nor complete as it related to the expanded testing phase time period from
February 7, 1990 to October 9, 1997. O’Shaughnessy Decl. Ex. 183 at FRX-AT-04248234-5,
FRX-AT-04248308-57 (PTE Application). In fact, Forest’s chronology identifies only 8 entries
as “significant activities” for the portion of the expanded testing phase occurring between
February 7, 1990 and October 9, 1997. Id. at FRX-AT-04248309-341. None of those 8 entries
identifies any clinical studies. Id. Nor do those 8 entries demonstrate continuous diligence from
February 7, 1990 to October 9, 1997. Id.; Litvin Decl. Ex. 315, Rosen Dep. (Oct. 26, 2017) at
123:13-124:7. To the contrary, the PTE Application states that “[a]fter the re-activated IND
became effective [on October 9, 1997], Merz promptly began its investigation of
NAMENDATM” (O’Shaughnessy Decl. Ex. 183, FRX-AT-04248226 at 8235) (emphasis
added), indicating that Merz had not been conducting such studies in furtherance of the Namenda
NDA prior to October 9, 1997. Further, this statement is not material for purposes of summary
judgment because this purported fact is not cited anywhere in Defendants’ Memorandum In
Support of their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. DPPs do not dispute that Forest included a chronology
describing events for the IND ‘392 in the Submission Log. Accordingly, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
32. The Submission Log included information about Merz’s submissions under IND
‘392, including the date of each submission, a description of the significance of each submission,
and a citation to the “Hard Copy #” of each submission (correlating to the information in the
FDA’s files). Among the Submission Log entries were:
July 10, 1989: “Initial IND Submission...”
April 29, 1991: “Annual Report (As per annual report, no US studies have begun
yet)”
January 20, 1993: “ ... IND was placed on clinical hold via phone on 3/4-
Sept.-1992 ...”
September 13, 1993: “ ... (As of Sept. 13, 1993, no studies were conducted during
past year)”
September 13, 1994: “ ... Request for inactivation of IND”
August 29, 1997: “Reactivation of IND ...”
Defendants’ Evidence: Ex. 183, Request for Extension of Patent Term (Dec. 9, 2003),
FRX-AT-04248226 at 8309-58.
Plaintiffs Admissions: Ex. 3, Johnston Rep. ¶¶ 48-49.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. While the PTE Application included a Submission Log with column
headings including “Agency #, “Hard Copy #,” “Product Name,” “Description,” “Date,” and
“Company,” that Submission Log did not indicate the “significance of each submission” and it
was not complete regarding at least the expanded testing phase time period from February 7,
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1990 to October 9, 1997. O’Shaughnessy Decl. Ex. 183 at FRX-AT-04248234-5, FRX-AT-
04248308-57 (PTE Application). In fact, Forest’s chronology identifies only 8 entries as
“significant activities” for the portion of the expanded testing phase occurring between February
7, 1990 and October 9, 1997. Id. at FRX-AT-04248309-341. None of those 8 entries identifies
any clinical studies. Id. Nor do those 8 entries demonstrate continuous diligence from February
7, 1990 to October 9, 1997. Id.; Litvin Decl. Ex. 315, Rosen Dep. (Oct. 26, 2017) at 123:13-
124:7. To the contrary, the PTE Application states that “[a]fter the re-activated IND became
effective [on October 9, 1997], Merz promptly began its investigation of NAMENDATM”
(O’Shaughnessy Decl. Ex. 183, FRX-AT-04248226 at 8235) (emphasis added), indicating that
Merz had not been conducting such studies in furtherance of the Namenda NDA prior to October
9, 1997. Further, ¶ 32 is not material for purposes of summary judgment because this purported
fact is not cited anywhere in Defendants’ Memorandum In Support of their Motion for Summary
Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
33. On June 5, 2007, FDA published an entry in the Federal Register entitled
“Determination of Regulatory Review Period for Purposes of Patent Extension: NAMENDA.”
Undisputed Record Evidence: Ex. 185, Federal Register Entry (Jun. 5, 2007), FRX-AT-
02399093.
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Response: Admitted. ¶ 33, however, is not material for purposes of summary
judgment because this purported fact is not cited anywhere in Defendants’ Memorandum In
Support of their Motion for Summary Judgment (ECF No. 435).
34. FDA noted that “[t]he applicant claims October 9, 1997, as the date the [IND]
became effective. However, FDA records indicate that the original IND effective date was
February 7, 1990, which was the date the original IND was removed from clinical hold.” FDA
determined that the applicable regulatory review period for Namenda was 5,001 days: 4,699
days in the testing phase and 302 days in the approval phase.
Undisputed Record Evidence: Ex. 185, Federal Register Entry (Jun. 5, 2007), FRX-AT-
02399093 at 9094.
Response: Admitted. This statement, however, is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
35. According to Mylan, once the FDA decided that Forest’s regulatory review period
began on February 7, 1990, rather than October 9, 1997, Forest’s statement in its application that
there were zero days during which Forest did not exercise “due diligence” was incorrect. Rather,
Mylan claimed, the number of days during which Forest was not diligent was 2801, i.e., between
February 7, 1990 (original IND filing) and October 9, 1997 (IND reactivation). Mylan argued
that violated 35 U.S.C. § 156, invalidating the ’703 patent’s PTE, by not explaining this to the
FDA.
Undisputed Record Evidence: Ex. 166, Pretrial Order, Exhibit 12, ¶¶ 218-19, 232, 289.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. While Mylan made many statements regarding patent term extension
in the Pretrial Order, Forest has mischaracterized the gestalt of Mylan’s arguments. In the
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Pretrial Order, Mylan argued inter alia that “Forest did not file an amended or supplemented its
Request for Extension of Patent Term to address the FDA’s determination regarding the correct
effective date of IND No. 33,392” and “Forest did not file an amended or supplemented Request
for Extension of Patent Term to address the number of days of the period of the testing phase
during which the Applicant failed to act with due diligence 37 C.F.R. § 1.775(d)(1)(ii) in view of
FDA’s determination regarding the correct effective date of IND No. 33,392.” O’Shaughnessy
Decl. Ex. 166 at MNAT_0000284 (¶¶225-226) (Pretrial Order). Mylan argued that this failure to
provide a complete application and disclose all material information was a “material failure to
comply with the requirements of 35 U.S.C. § 156.” Id. at MNAT_0000285 (¶234); see also id.
At MNAT_0000281 (¶199) (“The ’703 patent was potentially eligible for, at most, 1,250 day
(3.4 year) term extension, yet the PTO granted the maximum 5 year term extension due to
Plaintiffs’ material failure to provide correct representations regarding information required by
35 U.S.C. § 156. Plaintiffs’ material failure is the result of bad faith, gross negligence or
reckless indifference as to whether its representations to PTO were true or false.”). Thus, it was
not merely that Forest’s statement on “due diligence” was incorrect but also that there was a
“material failure” to comply with the statute. Further, ¶ 35 is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
36. Mylan alleged in its pretrial order sections that neither Forest nor any other party
petitioned the FDA to determine whether Forest exercised due diligence.
Undisputed Record Evidence: Ex. 166, Pretrial Order, Exhibit 12, ¶¶ 227-28.
Response: Admitted in part, denied in part. Mylan alleged in its pretrial order
sections that neither Forest nor any other party petitioned the FDA to determine whether Merz
exercised due diligence. See O’Shaughnessy Decl. Ex. 166 at MNAT_0000284-5 (¶¶227-228)
(Pretrial Order).
Forest’s Objection: Forest agrees that the fact should say neither Forest nor any other
party petitioned the FDA to determine whether Merz (not Forest) exercised due diligence,
although this distinction is immaterial. It is thus undisputed that “Mylan alleged in its pretrial
order sections that neither Forest nor any other party petitioned the FDA to determine whether
Merz exercised due diligence.”
37. On March 3, 2009, the PTO issued a Notice of Final Determination for the PTE
Application.
Undisputed Record Evidence: Ex. 186, FRX-AT-04547818 (“Notice of Final
Determination”).
Response: Admitted.
38. The PTO subtracted 630 days from the 4,699 days of the testing phase,
representing the portion of the regulatory review period that occurred prior to the issuance of the
’703 patent on October 29, 1991. Applying the formula, “Period of Extension = 1/2 (Testing
Phase) + Approval Phase,” the PTO calculated that the period of extension for the ’703 patent
was 2,336 days (6.4 years).
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Undisputed Record Evidence: Ex. 186, Notice of Final Determination.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. While Plaintiffs do not dispute Forest’s or the PTO’s math, Plaintiffs
submit that, had Forest not materially failed to comply with the requirements of 35 U.S.C. § 156
and submitted a patent term extension application that was complete and disclosed all material
information, the PTO would likely have arrived at a different result.
Forest’s Objection: DPPs’ suggestion that “the PTO would likely have arrived at a
different result” is speculation that cannot defeat a summary judgment motion. Woodman v.
WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is well established that conclusory
statements, conjecture, or speculation are inadequate to defeat a motion for summary
judgment.”) (internal quotation marks omitted). In any event, DPPs’ response consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
39. Because this number exceeds five years (1,825 days), the PTE was then limited to
the maximum amount of PTE under 35 U.S.C. § 156(g)(6)(A): five years.
Undisputed Record Evidence: Ex. 186, Notice of Final Determination.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. While Plaintiffs do not dispute Forest’s or the PTO’s math, Plaintiffs
submit that, had Forest not materially failed to comply with the requirements of 35 U.S.C. § 156
and submitted a patent term extension application that was complete and disclosed all material
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information, the PTO would likely have arrived at a different result.
Forest’s Objection: DPPs’ suggestion that “the PTO would likely have arrived at a
different result” is speculation that cannot defeat a summary judgment motion. Woodman v.
WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is well established that conclusory
statements, conjecture, or speculation are inadequate to defeat a motion for summary
judgment.”) (internal quotation marks omitted). In any event, DPPs’ response consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
40. Accordingly, the PTO granted a five year PTE for the ’703 patent.
Undisputed Record Evidence: Ex. 186, Notice of Final Determination at FRX-AT-
04547818-7819.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. While Plaintiffs do not dispute that the PTO granted a five year PTE
for the ’703 Patent, Plaintiffs submit that, had Forest not materially failed to comply with the
requirements of 35 U.S.C. § 156 and submitted a patent term extension application that was
complete and disclosed all material information, the PTO would likely have arrived at a different
result.
Forest’s Objection: DPPs’ suggestion that “the PTO would likely have arrived at a
different result” is speculation that cannot defeat a summary judgment motion. Woodman v.
WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is well established that conclusory
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statements, conjecture, or speculation are inadequate to defeat a motion for summary
judgment.”) (internal quotation marks omitted). In any event, DPPs’ response consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
41. On March 18, 2009, the PTO issued a Certificate Extending Patent Term Under
35 U.S.C. § 156 for the ’703 patent, extending the term of the ’703 patent from April 11, 2010 to
April 11, 2015.
Undisputed Record Evidence: Ex. 187, FRX-AT-03879201.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One at 3, ¶ 10;
DPPs’ Statement of Material Facts ISO Count Three at 3, ¶ 12.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. While Plaintiffs do not dispute that the PTO extended the term of the
’703 Patent by five years (from April 11, 2010 to April 11, 2015), Plaintiffs submit that, had
Forest not materially failed to comply with the requirements of 35 U.S.C. § 156 and submitted a
patent term extension application that was complete and disclosed all material information, the
PTO would likely have arrived at a different result.
Forest’s Objection: DPPs’ suggestion that “the PTO would likely have arrived at a
different result” is speculation that cannot defeat a summary judgment motion. Woodman v.
WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is well established that conclusory
statements, conjecture, or speculation are inadequate to defeat a motion for summary
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judgment.”) (internal quotation marks omitted). In any event, DPPs’ response consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
D. FDA Approval and Launch of Namenda IR
42. Memantine, “an N-methyl D-aspartate (NMDA) antagonist, is prescribed to treat
moderate to severe Alzheimer’s disease.”
Public Document: National Institute of Health, How is Alzheimer’s Disease Treated?, 1
(May 18, 2017), https://www.nia.nih.gov/health/how-alzheimers-disease-treated.
Undisputed Record Evidence: Ex. 6, FRX-AT-01747338, Opinion, New York v. Actavis,
Plc and Forest Laboratories, LLC, 14-Civ-7473 (S.D.N.Y. Dec. 1, 2014) (“Unredacted
Sweet Op.”) ¶ 8.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶¶ 1-2; DPPs’
Statement of Material Facts ISO Count Three ¶¶ 1-2.
Response: Admitted.
43. Since 2000, Forest has expended hundreds of millions of dollars researching and
developing Namenda.
Defendants’ Evidence: Ex. 374, FRX-AT-01750551, Saunders Hr’g (Nov. 11, 2014)
280:14-20 (“[r]oughly $2 billion [on royalties] ... [and] between the franchise of IR, XR
and the fixed-dose combination and the pediatric study, ... roughly around $500 million
of R&D.”).
Response: Denied because the evidence Defendants cite does not support their
contention. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56 “places
the initial burden on the moving party to identify ‘those portions of the ‘pleadings, depositions,
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answers to interrogatories, and admissions on file, together with affidavits, if any, which it
believes demonstrate the absence of a genuine issue of material fact.”) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986)). Defendants characterize royalty expense to the inventor as
“researching and developing Namenda,” a drug that was already researched and developed at the
time of the royalty expense. Further denied to the extent the cited testimony characterizes tests to
obtain regulatory approvals as “research[ing] and develop[ment]”; and to the extent that the
answer incorporated “fixed-dose combination and [the] pediatric study,” since the question being
responded to was “ ... how about the expensive clinical trials that Forest has shouldered for the
IR tablets and XR capsules.”
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Despite
DPPs’ argument that Forest has characterized royalty expenses to the inventor as “researching
and developing Namenda,” Forest does not conflate the $2 billion spent on royalties with its
research and development expenditure. Instead, ¶ 43 states that Forest spent hundreds of
millions of dollars on research and development, which Mr. Saunders clearly states in his
testimony. Furthermore, Plaintiffs have offered no support for the proposition that clinical trials
and other tests performed to obtain regulatory approval or pediatric studies should not be
considered research and development. As such this fact should be deemed admitted.
44. In December 2002, Forest submitted New Drug Application (“NDA”) No. 21-487
to the FDA, seeking approval to market memantine hydrochloride tablets (5mg and 10mg) –
branded as Namenda – for the treatment of Alzheimer’s.
Defendants’ Evidence: Ex. 8, FRX-AT-02660062; Ex. 9, FRX-AT-01784879.
Plaintiffs’ Admissions: Am. Compl. ¶ 94.
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Response: Admitted.
45. On October 16, 2003, the FDA approved Forest’s NDA for twice-daily Namenda
immediate release (“IR”) tablets for use in patients with moderate and severe Alzheimer’s
disease.
Undisputed Record Evidence: Ex. 9, FRX-AT-01784879.
Plaintiffs’ Admissions: Am. Compl. ¶ 96.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. ¶ 38.
Response: Admitted.
46. Immediate release drugs “release the active ingredient within a small period of
time, typically less than 30-minutes.”
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 6.
Response: Denied to the extent Defendants intend to portray extended release
Namenda (XR) as clinically superior to immediate release Namenda (IR). Otherwise admitted.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
47. In January 2004, Forest commercially launched Namenda IR tablets in the United
States.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. ¶ 38.
Defendants’ Evidence: Ex. 10, FRX-AT-01775144.
Plaintiffs’ Admissions: Am. Compl. ¶ 97.
Response: Admitted.
E. FDA Approval and Launch of Namenda XR
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48. Between 2006 and 2014, Forest invested approximately $175 million in R&D for
an improved version of Namenda—a once-daily extended release capsule, Namenda XR.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. ¶ 45.
Defendants’ Evidence: Ex. 11, Declaration of William J. Meury (Oct. 21, 2014), ¶ 8,
FRX-AT-01771984.
Response: Denied to the extent Defendants intend to portray extended release
Namenda (XR) as clinically superior to immediate release Namenda (IR). Otherwise admitted.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
49. Forest submitted NDA No. 22-525 for Namenda XR on September 14, 2009,
seeking approval to market extended release memantine hydrochloride tablets (7mg, 14mg,
21mg, and 28mg) – branded as Namenda XR – for the treatment of Alzheimer’s.
Defendants’ Evidence: Ex. 12, FRX-AT-00526564; Ex. 13, FRX-AT-03642483.
Response: Admitted.
50. Extended release drugs “release the active ingredient at a sustained and controlled
release rate over a period of time. Typically extended release tablets and capsules release their
ingredient with time periods of 8 hours, 12 hours, 16 hours, and 24 hours.”
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 6.
Response: Denied to the extent Defendants intend to portray extended release
Namenda (XR) as clinically superior to immediate release Namenda (IR). Otherwise admitted.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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51. The FDA approved once-daily Namenda XR on June 21, 2010 for use in patients
with moderate to severe Alzheimer’s disease.
Defendants’ Evidence: Ex. 13, FRX-AT-03642483.
Plaintiffs’ Admissions: Am. Compl. ¶ 146.
Response: Denied to the extent Defendants misleadingly cite only a portion of the
referenced paragraph of Plaintiffs’ First Amended Complaint, which reads “[o]n or about June
21, 2010, the FDA approved Forest’s NDA for Namenda XR, but Forest chose not to
immediately launch the supposedly improved formulation.” Am. Compl. ¶ 146. Denied to the
extent Defendants intend to portray extended release Namenda (XR) as clinically superior to
immediate release Namenda (IR). Otherwise admitted.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Furthermore, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
52. Forest launched Namenda XR in June 2013.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 14.
Defendants’ Evidence: Ex. 14, FRX-AT-01909674.
Response: Denied to the extent Defendants misleadingly cite only a portion of the
referenced paragraph of Plaintiffs’ Statement of Material Facts ISO Count One ¶ 14, which reads
“Forest launched Namenda XR in June 2013. As explained in detail below, Namenda XR is not,
under state generic drug substitution laws, considered to be substitutable for Namenda IR. Thus,
pharmacists cannot provide a patient with a prescription for Namenda XR, lower cost generic
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Namenda IR.” (Internal citation omitted). Otherwise, Plaintiffs admit that, pursuant to its switch
plans devised as early as 2007, Forest waited until June 2013 to launch Namenda XR. See Litvin
Decl. Ex. 330, FRX-AT-01730148, Solomon NYAG (Oct. 22, 2014) Dep. at 56:22-57:15 (“Q.
When did Forest first consider discontinuing Namenda IR? A.... what I would say is that when
we were beginning to plan for the launch of the product, of the extended release product, one of
the questions that we began to consider was whether we might remove the immediate release
tablet ... “); Litvin Decl. Ex. 367 FRX-AT-04610859 at 1063 (Business Plan dated April, 2007
stating that “The core strategy upon launch is to convert the majority of Namenda prescriptions
to MR”); Litvin Decl. Ex. 211, FRX-AT-04614356 at 4357, 2/21/2008 Forest Laboratories
Interoffice Memorandum (early 2008 memorandum referencing a conversion strategy from
Namenda IR to Namenda XR). Defendants did so to minimize the risk that the ‘703 patent would
be invalidated or found non-infringed in prospective ANDA litigation over Namenda XR, which,
like Namenda IR, was covered by the ‘703 patent. In a self-evaluation, Forest’s VP of Business
Development, David Solomon wrote:
Another interesting example where I needed to bring disparate
perspectives together has been around the timing of the launch of the
Namenda XR. It is clear from a commercial perspective that the
sooner we launch, the better — so we have the longest possible
runway to convert business to the XR before the immediate release
goes generic. However, there are significant IP considerations that
must be taken into account. First, our settlements in the original
Namenda litigation were for the immediate release version only, and
we would not want, through the launch of the XR, to give the generics
another opportunity to attack the base patent and, if effective, open the
door for early generics of the base Namenda product. And, second,
based on our patent portfolio, we have to evaluate how long we expect
to have exclusivity around the XR product — to be sure that we do not
use up that whole period of exclusivity too soon, as the lion’s share of
value derives from our ability to preserve branded business after the
immediate release goes generic. Ultimately, I was able to bring the
sides together on this and reach consensus around a launch in mid-
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2013, approximately 18 months before immediate release generics
enter the market.
Litvin Decl. Ex. 366, FRX-AT-01684785-93 at 790.
Had an ANDA challenger for Namenda XR successfully challenged the Namenda XR
patent prior to the launch date agreed upon for Namenda IR with ANDA filers for that drug, the
contingent launch provisions in the Namenda IR settlement agreements would have authorized
those ANDA filers to launch their generic versions of Namenda IR. O’Shaughnessy Decl. Ex.
121, Elhauge Report at ¶ 8.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Indeed, as stated in Forest’s General Objections, DPPs have
asserted this identical fact in the Affirmative Statement, ¶ 19. Accordingly, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
F. Forest’s Marketing of Namenda
53. In the last 20 years, FDA has only approved five drugs for Alzheimer’s disease—
the most recent one in 2003.
Public Document: FDA, FDA Facilities Research on Earlier Stages of Alzheimer’s
Disease, 2 (Sep. 13, 2016),
https://www.fda.gov/ForConsumers/ConsumerUpdates/ucm519875.htm.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7, 2017) Dep. 156:5-157:10 (“[T]here
has not been a new chemical entity approved for the treatment of Alzheimer’s disease
since memantine in 2003. 14 years, going on 15 years since a new product has been
approved.”).
Response: Admitted.
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54. Pharmaceutical innovation is “both expensive and venturesome.”
Defendants’ Evidence: Ex. 15, FRX-AT-01750103, October 21, 2014 Declaration of
Mick Kolassa ¶ 81 (“Pharmaceutical innovation is the product of the brand-name,
research-based pharmaceutical industry.”).
Response: Denied to the extent Defendants claim to engage in pharmaceutical
innovation. See Litvin Decl. Ex. 368, Saunders Dep. (Oct. 25, 2014) at 360:4-8 (“Most drugs on
the market were not developed by the pharmaceutical company or discovered by the
pharmaceutical company that sells them,”); id. at 363:21-24 (“So Actavis is not going to engage
in discovery research with USEEO? A. It would be highly unlikely; I never say never.”). See
also Litvin Decl. Ex. 369, Saunders Hr’g Tr. (Nov. 11, 2014) at 246:12-247:6:
Q. Mr. Saunders, discovery research is the basic science around looking
for molecules and biologics and other medicines that would have activity
against a targeted disease, is that right?
A. I think that’s a general fair description of discovery research.
Q. And is it fair to say that while you are CEO of Actavis, Actavis is not
going to engage in discovery research?
A. We do not engage in discovery research.
Q. Would you agree that you are fine with any other company doing
discovery research, but you are not going to engage in discovery research?
A. No. I think that big pharmaceutical companies have an incredibly
lousy track record at doing discovery research, and the best source of
discovery research are academics and venture -- start-up companies.
Q. You are fine with every other company doing it; you are just not
going to do it?
A. I don’t like to invest in companies that waste a lot of money on
discovery research without results, but yes.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation
of different purported facts, but no evidentiary basis to contest the statement. Accordingly,
the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
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56(e)(2).
55. The average cost of developing a new drug is about $1.3 billion, in part because
so many drugs fail.
Defendants’ Evidence: Ex. 322, FRX-AT-01751647, Cremieux (NYAG) Hr’g Tr. 833:3-
834:13; Ex. 15, Kolassa (Oct. 21, 2014) Decl. ¶ 81 (“The investment necessary for [a]
return [on pharmaceutical innovation] is estimated to be from $800 million to over $1
billion.”).
Response: Denied to the extent Defendants claim that it cost the amounts indicated to
develop Namenda XR, particularly since Defendants do not engage in discovery research. See
Response to ¶ 54. None of the cited sources state a cost to develop Namenda XR. Also denied to
the extent Defendants replaced the words “this return is estimated to be” with “[a] return [on
pharmaceutical innovation] is estimated to be.” “[T]his return” is in reference to, generally, the
amount of profits necessary to “pay back the money invested in the original 15,000 compounds”
“that are studied by research-based firms.” Forest is not a research based firm. See Response to ¶
54. Moreover, as a number of researchers have noted, such estimates of drug “development”
costs often: (1) include “opportunity costs” based on hypothetical returns on alternate
investments for research and development (“R&D”) expenditures; (2) fail to recognize that much
of the initial research for new chemical entities is performed by the National Institutes of Health
or universities; and (3) ignore R&D-related tax credits received by pharmaceutical firms. See
Litvin Decl. Ex. 364, Marcia Angell, THE TRUTH ABOUT DRUG COMPANIES 44-65 (2004); Litvin
Decl. Ex. 362, Donald W. Light & Rebecca Warburton, Demythologizing the High Costs of
Pharmaceutical Research, BIOSOCIETIES, Mar. 2011, at 34-50.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
Case 1:15-cv-07488-CM-RWL Document 618 Filed 01/22/19 Page 46 of 536
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73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2)
56. This is “particularly true” for Alzheimer’s disease treatments, where the
development failure rate is approximately 99.6%.
Defendants’ Evidence: Ex. 322, Cremieux (NYAG) Hr’g Tr. 833:3-834:13; Ex. 15,
Kolassa (Oct. 21, 2014) Decl. ¶ 81 (“[F]or every 15,000 new compounds that are studied
by research-based firms, only three will prove to be safe and effective enough to gain
FDA approval.”); Ex. 325, Snyder Dep. 62:17-63:10 (“[T]here’s a 99 percent failure rate
in clinical trials for Alzheimer’s disease products.”).
Response: Denied to the extent Defendants claim that it cost the amounts indicated to
develop Namenda XR, particularly since Defendants do not engage in discovery research. See
Response to ¶¶ 54-55. None of the cited sources states a cost to develop Namenda XR. The
Cremieux testimony states that there is a high failure rate “in the area of the treatment of
Alzheimer’s symptoms” but it does not identify a cost for drug development. The cited portion of
the Kolassa Declaration does not pertain specifically to Alzheimer’s drugs and does not purport
to identify development costs for Alzheimer’s drugs or Namenda XR. The Snyder testimony
does not pertain to the costs of drug development. Therefore, the evidence Defendants cite does
not support their contention. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002)
(Rule 56 “places the initial burden on the moving party to identify ‘those portions of the
‘pleadings, depositions, answers to interrogatories, and admissions on file, together with
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
57. Merz owns ’703 patent for the application and use of Memantine.
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Defendants’ Evidence: Ex. 4, FRX-AT-01710620.
Response: Admitted in part and denied in part. Plaintiffs do not dispute that Merz
owns the ’703 patent, but Plaintiffs dispute the characterization of the ’703 patent as “for the
application and use of Memantine.” The claims of the ’703 patent define the scope of the
claimed subject matter.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. DPPs identify no
evidence to suggest that the ‘703 patent is not “for the application and use of Memantine.”
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
58. In June 2000, Forest obtained an exclusive license to U.S. Patent No. 5,061,703
(the ‘703 patent held by Germany’s Merz Pharma GmbH & Co. KGaA).
Defendants’ Evidence: Ex. 4, FRX-AT-01710620; Ex. 17, FRX-AT-01746478.
Undisputed Record Evidence: Ex. 17, Amended Complaint, The People of the State of
New York v. Actavis, Plc and Forest Laboratories, LLC, 14-Civ-7473 (S.D.N.Y. Sep. 14,
2014), ¶ 53.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 3; DPPs’
Statement of Material Facts ISO Count Three ¶ 3.
Response: Admitted.
59. As part of that agreement, Forest obtained exclusive rights to market a memantine
hydrochloride product in the United States under Merz’s ‘703 patent.
Defendants’ Evidence: Ex. 4, FRX-AT-01710620.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 4; DPPs’
Statement of Material Facts ISO Count Three ¶ 4.
Response: Admitted.
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60. Forest markets the prescription pharmaceutical memantine hydrochloride in the
United States as Namenda®, Namenda XR®, and Namzaric®, a fixed-dose combination of
memantine hydrochloride extended-release and donepezil hydrochloride.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. ¶ 2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One ¶ 1; DPPs’
Statement of Material Facts ISO Count Three ¶ 1.
Public Document: https://www.accessdata.fda.gov/drugsatfda_docs/label/2014/206439
lbl.pdf
Response: Admitted.
G. Pediatric Exclusivity
61. On July 7, 2011 Forest submitted a Proposed Pediatric Study Request (“PPSR”)
to the FDA, to initiate FDA’s review and issuance of a Written Request to conduct studies to
support the safety and efficacy of memantine HCl in pediatric patients with autism.
Defendants’ Evidence: Ex.18, FRX-AT-03605359.
Response: Admitted.
62. Forest submitted the PPSR to “obtain [FDA’s] agreement that there is an unmet
medical need, and that memantine would be an appropriate product to develop and evaluate for
the safe and effective treatment in children with autism ...”
Defendants’ Evidence: Ex. 326, Bray Dep. 100:1-17; Ex. 19, FRX-AT-03606011 at
6012 (“There are currently no medications specifically approved in the U.S. for the
treatment of any of the core domains of autism.”).
Response: Admitted that the Deposition of June Bray contains the above quotation.
The statement is denied, however, as irrelevant to the extent it purports to provide Forest’s
motivation for seeking pediatric exclusivity. See Litvin Decl. Ex. 259, Bray Dep. (Aug. 18,
2017) at 113:20-25 (the six-month pediatric exclusivity period is an incentive).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
63. At the time of the PPSR, memantine had been used off-label for the treatment of
children with autism.
Defendants’ Evidence: Ex. 326, Bray Dep. 101:10-102:17; Ex. 19, FRX-AT-03606011
at 6012.
Response: For purposes of the current Motion, this statement is admitted; however,
strict proof thereof will be demanded in further proceedings and trial. Plaintiffs further object
that this statement is irrelevant.
64. On January 25, 2012 FDA provided a Pediatric Written Request (“PWR”) to
investigate the potential use of memantine for the treatment of the core social impairment
symptoms in subjects with autism or autism spectrum disorder.
Undisputed Record Evidence: Ex. 19, FRX-AT-03606011.
Response: Admitted.
65. On May 16, 2012 Forest notified FDA of its agreement to conduct the studies
requested within the PWR and its plan to initiate the studies by the end of June 2012.
Defendants’ Evidence: Ex. 20, FRX-AT-03641863.
Response: Admitted.
66. Forest spent approximately $70 million dollars on clinical trials for the study of
memantine in children.
Defendants’ Evidence: Ex. 61, FRX-AT-01731336, at -1340-41 (“By 2009, Forest began
evaluating whether memantine could be approved for the treatment of pediatric austim.
Forest conducted a series of clinical studies for this indication at a total cost of nearly $70
million.”); Ex. 354, Saunders (NYAG) Dep. 318:4-23 (“Q: Do you have any
understanding of what is being conveyed here in the presentation to Merz? A. Yes, I
think what we’re trying to explain to Merz is that, you know, we made significant
investments in R&D around Namenda XR in the fixed dose combination, including
clinical studies. We did a pediatric study . . . in autism, which was I kind of remember
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about $70 million or thereabouts, very expensive ...”).
Response: For purposes of the current Motion, this statement is admitted; Plaintiffs
reserve the right to contest this fact in any other proceedings in this case. Plaintiffs further object
that this statement is irrelevant.
67. FDA provided a Revised Written Request on May 29, 2013.
Response: Admitted.
68. FDA granted Forest Pediatric Exclusivity on June 16, 2014.
Undisputed Record Evidence: Ex. 21, FRX-AT-03642881.
Response: Admitted.
69. The six-month pediatric exclusivity period ran from the expiration of the term of
the ‘703 patent on April 11, 2015 to October 11, 2015.
Undisputed Record Evidence: Memorandum Decision and Order Granting in Part and
Denying in Part Plaintiffs Motion for Collateral Estoppel and Partial Summary Judgment
on Count One; Denying Plaintiffs’ and Defendants’ Motions for Partial Summary
Judgment on Count Five, In re Namenda Direct Purchaser Antitrust Litig., (S.D.N.Y.
May 23, 2017), 15-cv-7488, ECF No. 252, at *11.
Plaintiffs’ Admissions: Am. Compl. ¶¶ 100-101.
Response: Plaintiffs do not dispute that the pediatric exclusivity period associated
with the ‘703 patent ran from April 11, 2015 to October 11, 2015. The statement is denied,
however, as irrelevant to the extent it implies that pediatric exclusivity would have prevented
Amneal, Dr. Reddy’s, Lupin, Mylan, and Sun from obtaining FDA final approval for generic
Namenda IR before the ’703 patent expired. All five of these generic companies obtained FDA
final approval by April 10, 2015. Thus the pediatric exclusivity period was not an independent
regulatory barrier preventing any of these five generic companies from launching before or after
the date the patent expired.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
H. Lexapro
70. In September of 2002, Forest launched Lexapro, a serotonin reuptake inhibitor
(SRRI) used for the treatment of major depression and generalized anxiety disorder.
Public Sources: Form 10-K filed May 29, 2009 at 9, available at https://www.sec.gov
/Archives/edgar/data/38074/000003807409000029/forest10k2009.htm.
Response: Admitted.
71. Escitalopram oxalate (“escitalopram”) is the active pharmaceutical ingredient in
Lexapro.
Public sources:
https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/021323 s047lbl.pdf
Response: Admitted.
72. Lexapro was developed by Forest and H. Lundbeck A/S (or Lundbeck), a Danish
pharmaceutical firm which licensed the exclusive United States marketing rights to escitalopram
to Forest.
Public sources: Form 10-K filed May 29, 2009 at 10, available at https://www.sec.gov/
Archives/edgar/data/38074/000003807409000029/forest10k2009.htm.
Response: Admitted.
I. Teflaro/Ceftaroline
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73. Teflaro is a cephalosporin antibacterial indicated for the treatment of acute
bacterial skin and skin structure infections and community-acquired bacterial pneumonia.
Public Sources:
https://www.accessdata.fda.gov/drugsatfda_docs/label/2011/200327s001 lbl.pdf
Response: Admitted.
74. Ceftaroline fosamil (“ceftaroline”) is the active pharmaceutical ingredient in
Teflaro.
Public Sources:
https://www.accessdata.fda.gov/drugsatfda_docs/label/2011/200327s001lbl.pdf;
https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/200327Orig1s000ChemR.pd
Response: Admitted.
GENERIC SETTLEMENTS: NO REVERSE PAYMENTSII.
A. Terms of the Settlement Agreements with the Generic Defendants
75. On January 10, 2008, Forest filed a patent infringement lawsuit for infringement
of the ’703 patent against Cobalt Laboratories Inc. (“Cobalt”), Lupin Pharmaceuticals, Inc. and
Lupin Ltd. (collectively “Lupin”), Orchid Pharmaceuticals Inc. and Orchid Chemicals &
Pharmaceuticals Ltd (collectively “Orchid”), Teva Pharmaceuticals USA, Inc. (“Teva”),
Upsher-Smith Laboratories, Inc. (“Upsher Smith”), and Wockhardt USA Inc. and Wockhardt
Ltd. (collectively, “Wockhardt”) after those generic companies submitted ANDAs for proposed
generic versions of Namenda® that contained Paragraph IV certifications against Forest’s ‘703
patent.
Public Document: Complaint, Forest Labs., Inc. et al. v. Cobalt Labs. Inc., et al., 08-cv-
021, D.I. 1 (D. Del.).
Response: Admitted that the above-listed generic companies are listed in Forest’s
complaint, Forest Labs., Inc. et al. v. Cobalt Labs. Inc., et al., 08-cv-021 (D. Del.) ECF No. 1,
which was filed on January 10, 2008, and that the complaint alleges that the above-listed generic
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companies submitted ANDAs for proposed generic memantine products that contained
Paragraph IV certifications as to the ‘703 patent. O’Shaughnessy Decl. Ex. 134.
Forest’s Objection: DPPs have admitted the relevant portions of the statement of fact,
have not expressly denied the fact, and have not cited any evidence sufficient to deny the fact.
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
76. On January 25, 2008, Forest filed a patent infringement lawsuit for infringement
of the ’703 patent against, inter alia, Dr. Reddy’s Laboratories Inc. and Dr. Reddy’s Laboratories
Limited (collectively “Dr. Reddy’s”), Amneal Pharmaceuticals (“Amneal”), Mylan
Pharmaceuticals Inc. (“Mylan”), Sun Pharmaceutical Industries, Inc. (“Sun”) (together with the
generic defendants in the 08-00021 case, the “Generics”) after those generic companies
submitted ANDAs for proposed generic versions of Namenda® that contained Paragraph IV
certifications against Forest’s ’703 patent.
Public Document: Complaint, Forest Labs., Inc., et al., v. Dr. Reddy’s Labs., Inc., et al.,
08-cv-052, D.I. 1 (D. Del.); see id, D.I. 91, Order of Consolidation (these two cases were
eventually consolidated).
Response: Admitted in part, denied in part. Plaintiffs do not dispute that Dr. Reddy’s,
Mylan, and Sun are listed in Forest’s complaint, Forest Labs., Inc., et al., v. Dr. Reddy’s Labs.,
Inc., et al., 08-cv-052, (D. Del.) ECF No. 1, which was filed on January 25, 2008, and that the
complaint alleges that these generic companies submitted ANDAs for proposed generic
memantine products that contained Paragraph IV certifications as to the ‘703 patent. Denied that
Amneal is mentioned in the complaint. O’Shaughnessy Decl. Ex. 135.
Forest’s Objection: Interpharm is listed in Forest’s complaint, Forest Labs., Inc., et al.,
v. Dr. Reddy’s Labs., Inc., et al., 08-cv-052, D.I. 1 (D. Del.). Amneal acquired Interpharm
between 2008 and 2009. January 5, 2018 Decl. of Kristen O’Shaughnessy in Further Support of
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Forest’s Mot. for Summ. J. (“O’Shaughnessy Decl. II”) Ex. 376, Gupta (Amneal) Dep. 14:10-15.
Thus, Amneal was the effective party that Forest filed its lawsuit against. Accordingly, this
statement is undisputed.
77. By submitting Paragraph IV certifications, the Generics requested FDA approval
to market their generic product prior to the expiry of the ’703 patent on April 11, 2015.
Public Document: 21 U.S.C. § 355(j)(2)(A)(vii)(IV).
Response: This statement is improperly stated as a legal conclusion. To the extent a
response is required, this statement is denied in part. The “evidence” (i.e., the statute) cited by
Defendants does not support the statement. Plaintiffs further disagree that the proper expiration
date of the ’703 Patent was on April 11, 2015. However, at the time the Paragraph IV
certifications were submitted, the PTE had not yet been granted; accordingly, at the time the
Paragraph IV certifications were submitted the expiry of the ‘703 patent was not April 11, 2015.
Forest’s Objection: DPPs’ response consists of argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement, and therefore this fact should
be treated as established. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs do
not contest that the grant of the PTE extended the expiry of the ‘703 patent to April 11, 2015, or
that by filing Paragraph IV certifications, the Generics requested FDA approval to market their
generic product prior to expiry of the ‘703 patent. Accordingly, this fact is undisputed.
78. On July 2, 2009, Magistrate Judge Stark issued a Report & Recommendation
Regarding Claim Construction.
Public Documents: Ex. 139, ‘703 Patent Litigation, Dkt. No. 373.
Response: Admitted.
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79. Judge Stark “largely sided with Plaintiffs” [i.e, Forest], adopting Forest’s
positions on 9 of the 13 disputed issues, and rejecting the generics’ proposals on the remaining 4
in favor of his own constructions.
Public Documents: See generally Ex. 139, ‘703 Patent Litigation, Dkt. No. 373.
Defendants’ Documents: Ex. 5, McKelvie Rep. ¶ 56.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
immaterial and improperly characterizing the district court’s ruling. Whether or not Judge Stark
agreed with one party’s “positions” over other parties’ “positions” is immaterial because any
such agreement with a particular party does not establish that the claim construction(s) impacted
any substantive issue in a meaningful way. To the extent that a response is required, this
statement is disputed in part. Assuming that each lettered subsection A-M of the Report and
Recommendation is viewed as a “claim construction issue[],” Plaintiffs admit that Judge Stark
agreed with Forest on 9 out of 13 of those issues. Plaintiffs deny that Judge Stark rejected the
generics’ proposals on the remaining 4 issues. Judge Stark agreed with the generics on a number
of issues. For example, he agreed with generics’ view that Alzheimer’s disease “would be found
to contain plaques and tangles.” O’Shaughnessy Decl. Ex. 139 at 23. To the extent that this
statement misleadingly suggests that Judge Stark only disagreed with the generics, Judge Stark
also noted disagreement with Forest, see, e.g., O’Shaughnessy Decl. Ex. 139 at 17 and n. 6, and
noted at least once that “[he did] not agree with either side.” O’Shaughnessy Decl. Ex. 139 at 28.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp.
3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Case 1:15-cv-07488-CM-RWL Document 618 Filed 01/22/19 Page 56 of 536
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Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
Forest does not “improperly characterize” Magistrate Judge Stark’s report and
recommendation, but instead quotes directly from it: “Just as I have largely sided with Plaintiffs
above, and for the same reasons, I do so here as well.” December 6, 2017 Corrected Decl. of
Kristen O’Shaughnessy in Support of Forest’s Mot. for Summ. J. (“O’Shaughnessy Decl. I”) Ex.
139, ‘703 Patent Litigation, Dkt. No. 373 at 21. Additionally, Judge Stark did reject the
Generics’ proposals on the remaining four issues, as he did not adopt their proposed claim
constructions wholesale. Instead, Judge Stark adopted portions of both Forest’s and the
Generics’ proposed constructions and used those constructions to come up with his own, or came
up with his own constructions entirely. See id. at 17-18 (”The Defendants’ proposed
constructions, however, are no more persuasive.”), 22-24, 24-25 (rejecting Defendants’ “plaques
and tangles” language in construing “patient diagnosed with Alzheimer’s disease”), 27-28 (“I do
not agree with either side.”); see also O’Shaughnessy Decl. I Ex. 5, McKelvie Rep. ¶ 57.
80. Following Judge Stark’s R&R and Judge Sleet’s memorandum and order, Forest
and the Generics entered into Settlement Agreements.
Defendants’ Evidence: Ex. 22, FRX-AT-00000218, Amneal Settlement Agreement,
dated September 1st, 2009; Ex. 23, FRX-AT-00000274, Apotex Settlement Agreement,
dated September 8th, 2009; Ex. 24, FRX-AT-00000148, Upsher-Smith Settlement
Agreement, dated September 8th, 2009; Ex. 25, FRX-AT-00000076, Wockhardt
Settlement Agreement, dated September 10th, 2009; Ex. 26, FRX-AT-00000112, Sun
Settlement Agreement, dated October 9th, 2009; Ex. 27, FRX-AT-00000038, Cobalt
Settlement Agreement, dated October 15th, 2009; Ex. 28, FRX-AT-00000184, Teva
Settlement Agreement, dated November 3rd, 2009; Ex. 29, FRX-AT-00000001, Dr.
Reddy’s Settlement Agreement, dated November 13th, 2009; Ex. 30, FRX-AT-
00000309, Torrent Settlement Agreement, dated December 7th, 2009; Ex. 31, FRX-AT-
00000340, Lupin Settlement Agreement, dated December 11th, 2009; Ex. 32, FRX-AT-
00000380, Orchid Settlement Agreement, dated March 23rd, 2010; Ex. 33, FRX-AT-
00000428, Mylan Settlement Agreement, dated July 21st, 2010.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
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incomplete and misleading. Plaintiffs admit that some Settlement Agreements have dates that fall
after Judge Stark’s R&R, which is dated July 2, 2009. Some of the parties, however, were
dismissed before Judge Stark’s R&R, including: O’Shaughnessy Decl. Ex. 143, the Barr
dismissal (May 8, 2008); Litvin Decl. Ex. 370, the Kendle dismissal (Feb. 28, 2008);
O’Shaughnessy Corrected Decl. Ex. 145, the Ranbaxy consent judgment (April 10, 2008); and
O’Shaughnessy Decl. Ex. 145, the Synthon dismissal (May 16, 2008). Plaintiffs further deny that
all Settlement Agreements have dates that fall after Judge Sleet’s memorandum and order, which
is dated September 21, 2009. Some of the Settlement Agreements have dates that are before
Judge Sleet’s memorandum and order, including: Upsher-Smith (Sept. 8, 2009), O’Shaughnessy
Decl. Ex. 24; Wockhardt (Sept. 10, 2009), O’Shaughnessy Decl. Ex. 25; Amneal (Sept. 1, 2009),
O’Shaughnessy Decl. Ex. 22; and Apotex (Sept. 8, 2009), O’Shaughnessy Decl. Ex. 23. Further,
¶ 80 is not material for purposes of summary judgment because this purported fact is not cited
anywhere in Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF
No. 435). Further denied to the extent that the statement implies a causal connection between
Judge Sleet’s order and any settlement. Further denied to the extent that no generic agreed to
acknowledge that the patent was valid and infringed.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. The four documents cited before Judge Stark’s R&R are not
Settlement Agreements. See O’Shaughnessy Decl. I Ex. 143 (the Barr dismissal);
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O’Shaughnessy Decl. I Ex. 144 (the Ranbaxy Consent Judgment and Order); O’Shaughnessy
Decl. I Ex. 145 (the Synthon dismissal); Litvin Decl. Ex. 370 (the Kendle dismissal). Forest
agrees that the Upsher-Smith, Wockhardt, Amneal and Apotex settlement agreements were
entered after Judge Stark’s R&R. DPPs do not dispute that the remaining Settlement
Agreements were entered after Judge Sleet’s memorandum and order.
Accordingly, the following revised fact accounting for this distinction is undisputed:
“Following Judge Stark’s R&R and/or Judge Sleet’s memorandum and order, Forest and the
Generics entered into Settlement Agreements, with four Generics (Upsher-Smith, Wockhardt,
Amneal and Apotex) settling after Judge Stark’s R&R was issued and before Judge Sleet’s
memorandum and order was issued, and the remainder settling thereafter.”
81. As described in more detail below, for each of the Generics, the licenses
agreements contained specific clauses that allowed the Generics to enter even earlier in the event
that other generic manufacturers entered the market with a generic memantine product (“Generic
Entry Early Acceleration Clauses”).
Defendant’s documents: Id.
Response: Denied. This statement is misleading to the extent that it incorrectly
implies that the generics could not have launched their generic memantine products earlier than
any agreed upon “Launch Date” provided in the Settlement and License Agreements with Forest.
For example, they could have continued to challenge the ‘703 patent in litigation and succeeded,
or launched their ANDA product at risk after a district court victory. See O’Shaughnessy Decl.
Ex. 121, Elhauge Report at ¶ 8. It is further denied to the extent the statement purports to
incorporate any facts not disclosed.
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Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Moreover, the specific example cited by DPPs is not inconsistent
with the statement of fact, as both the statement and the specific example confirm that the
Generic Entry Early Acceleration Clauses permit earlier entry in the event that another
manufacturer enters earlier. Additionally, DPPs have abandoned at-risk launch as a but-for
world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an alternative
settlement agreement between Forest and Mylan; and (2) Mylan prevailing in the patent
litigation.). Additionally, DPPs have abandoned at-risk launch as a but-for world in their briefs.
See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an alternative settlement agreement
between Forest and Mylan; and (2) Mylan prevailing in the patent litigation.). Thus, the example
DPPs cite is not a basis to deny the statement, but rather confirmation that even DPPs believe the
fact is undisputed. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
Amneal
82. Forest’s settlement with Amneal allows Amneal to launch a generic memantine
hydrochloride product the later of “3 calendar months prior to the expiration of the ’703 patent,
including any extensions and/or pediatric exclusivity” or “the date that Amneal obtains final
approval from the FDA.”
Defendants’ Evidence: Ex. 22, Amneal Settlement Agreement, Exhibit B (License
Agreement), at §§ 1.14, 2.1, 3.2.
Response: Denied. This statement is misleading to the extent it implies that absent
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the agreement with Forest, Amneal could not have launched its generic memantine products
earlier than any agreed upon “Launch Date” provided in Amneal’s Settlement and License
Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
83. Amneal was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 22, Amneal Settlement Agreement, Exhibit B (License
Agreement), at §§ 1.14, 2.1, 3.2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three ¶ 30.
Response: Denied to the extent it implies that absent the agreement with Forest,
Amneal could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Amneal’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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84. Under license agreement Amneal represented that “its attorney fees and costs to
date in the Action have exceeded $150,000,” and Forest agreed to pay Amneal $150,000 to
defray a portion of the paid attorney fees and costs and to reflect a portion of the saved attorney
fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 22, Amneal Settlement Agreement, Exhibit B (License
Agreement), at § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs....”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Amneal’s
expended litigation costs. Defendants provide no evidence that Forest made any attempt to
determine Amneal’s expended litigation costs prior to agreeing to pay $150,000 in litigation
costs. Amneal produced a litigation report for the period between 1/1/2008 and 10/31/2009 for
the Namenda matter totaling $446,060.51. See Litvin Decl. Ex. 371, Gupta (Amneal) Dep., Ex.
1. However, there is no evidence as to when this report was created or that it was ever provided
to Forest during settlement negotiations with Amneal.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
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Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
85. Amneal’s litigation costs were $450,000.
Undisputed Record Evidence: Ex. 327, Gupta (Amneal) Dep. 112:21-113:22.
Response: Denied to the extent it implies Forest was aware of Amneal’s expended
litigation costs when sending its first draft settlement agreement providing for $150,000 in
litigation costs, for the reasons stated in Response to ¶ 84.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
86. Amneal’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Amneal to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 22, Amneal Settlement Agreement, Exhibit B (License
Agreement), at §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest,
Amneal could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Amneal’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81
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Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
87. Amneal negotiated the terms of Generic Entry Early Acceleration Clauses in its
license agreement with Forest.
Third Party Testimony: Ex. 327, Gupta (Amneal) Dep. 118:11-119:12 (“Q: This
settlement agreement that we’re looking at here, this is the result of back and forth
negotiations between Forest and Ameal, right? A: Yes.”).
Response: Denied to the extent it implies Amneal and Forest engaged in back and
forth negotiation related to the inclusion of generic entry early acceleration clauses. Forest knew
that generics routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep.
(Sept. 7, 2017) at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ...
that is something that the generics insist on, and that’s consistent across the board”). Forest
drafted the initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252,
Agovino Dep. (Sept. 12, 2017) at 55:4-21. Forest’s initial Amneal draft settlement agreement
contained early entry acceleration clauses. See Litvin Decl. Ex. 372, KE00000238-269 at 258-
259. Forest knew that “the generic companies wouldn’t have settled without those provisions.”
Litvin Decl. Ex. 252, Agovino Dep. 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
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P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed, at a minimum, that this
particular generic manufacturer’s license agreement with Forest contained Generic Entry Early
Acceleration Clauses, such clauses are routinely requested by generics, and the generic
companies would not have settled the patent litigation without Generic Entry Early Acceleration
Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Apotex
88. Forest’s settlement with Apotex allows Apotex to launch a generic memantine
hydrochloride product the later of “3 calendar months prior to the expiration of the ’703 patent,
including any extensions and/or pediatric exclusivity” or “the date that Apotex obtains final
approval from the FDA.”
Defendants’ Evidence: Ex. 23, Apotex Settlement Agreement, Exhibit B (License
Agreement), at §§ 1.14, 2.1, 3.2.
Response: Denied. Apotex’s Settlement and License Agreement license launch date
was “the later of: (a) expiration of the ‘703 Patent, including any extensions and/or pediatric
exclusivity, whether granted before, on or after the Execution Date; or (b) the date that Apotex
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obtains final approval from the FDA of the Apotex ANDA, unless accelerated as described
therein.” See Litvin Decl. Ex. 373, FRX-AT-00000274-308 at 292 (License Agreement §1.14
“Launch Date”). Further denied to the extent it implies that Apotex could not have launched its
generic memantine products earlier than any agreed upon “Launch Date” provided in Apotex’s
Settlement and License Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: The original statement incorrectly contended that Apotex was given
three months early entry. However, Forest and DPPs agree, and therefore it is undisputed that,
Forest’s settlement with Apotex allowed Apotex to launch a generic memantine hydrochloride
product “the later of: (a) expiration of the ‘703 Patent, including any extensions and/or pediatric
exclusivity, whether granted before, on or after the Execution Date; or (b) the date that Apotex
obtains final approval from the FDA of the Apotex ANDA, unless accelerated.”
Forest hereby incorporates its objection to DPPs’ response to ¶ 81. DPPs’ further
response to this fact consists of improper argument about the purported implications of this fact,
or an attempt to “contextualize” the fact, but cites no evidentiary basis to contest the fact.
Accordingly, the fact should be deemed as admitted. SESAC, 1 F. Supp. 3d at 186 n.3;
Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25; Fed. R. Civ. P. 56(e)(2).
89. Apotex was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 23, Apotex Settlement Agreement, Exhibit B (License
Agreement), at §§ 1.14, 2.1, 3.2.
Response: Denied. Apotex’s Settlement and License Agreement did not license
Apotex to begin marketing until “the later of: (a) expiration of the ‘703 Patent, including any
extensions and/or pediatric exclusivity, whether granted before, on or after the Execution Date;
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or (b) the date that Apotex obtains final approval from the FDA of the Apotex ANDA, unless
accelerated as described therein.” See Litvin Decl. Ex. 373, FRX-AT-00000274-308 at 292
(License Agreement §1.14 “Launch Date”). Further denied to the extent it implies Apotex could
not have launched its generic memantine products earlier than any agreed upon “Launch Date”
provided in the Settlement and License Agreement with Forest, for the reasons stated in
Response to ¶ 81.
Forest’s Objection: The original statement incorrectly contended that Apotex was given
three months early entry. However, Forest and DPPs agree, and therefore it is undisputed that,
Forest’s settlement with Apotex allowed Apotex to launch a generic memantine hydrochloride
product “the later of: (a) expiration of the ‘703 Patent, including any extensions and/or pediatric
exclusivity, whether granted before, on or after the Execution Date; or (b) the date that Apotex
obtains final approval from the FDA of the Apotex ANDA, unless accelerated.” DPPs also agree
that “the pediatric exclusivity period associated with the ‘703 patent ran from April 11, 2015 to
October 11, 2015.” DRSUF to ¶ 69. Accordingly, it is undisputed that Apotex was eligible to
begin marketing (per the settlement agreement, without accounting for any required FDA
approval) a generic memantine hydrochloride product by October 11, 2015.
Forest hereby incorporates its objection to DPPs’ response to ¶ 81. DPPs’ further
response to this fact consists of improper argument about the purported implications of this fact,
or an attempt to “contextualize” the fact, but cites no evidentiary basis to contest the fact.
Accordingly, the fact should be deemed as admitted. SESAC, 1 F. Supp. 3d at 186 n.3;
Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25; Fed. R. Civ. P. 56(e)(2).
90. Apotex’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Apotex to launch its memantine product even earlier if (i) Forest entered into an
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agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 23, Apotex Settlement Agreement, Exhibit B (License
Agreement), at §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies Apotex could not have launched its generic
memantine products earlier than any agreed upon “Launch Date” provided in the Settlement and
License Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
91. Apotex negotiated the terms of the Generic Entry Early Acceleration Clauses in
its license agreement with Forest.
Undisputed Record Evidence: Ex. 34, KE00000169 (“As discussed, Forest and Merz are
unwilling to pay Apotex a non-first-file, any attorney fees.”); Ex. 35, KE00000135 (“As
you can see from changes we are only trying to maintain the same position we would
have been in if we had not filed.”).
Response: Denied to the extent it implies Apotex and Forest engaged in back and
forth negotiation regarding the generic early acceleration clauses. Forest knew that generics
routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017)
at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is
something that the generics insist on, and that’s consistent across the board”). Forest drafted the
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initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s initial draft settlement agreement to Apotex contained the
early acceleration clauses. See Litvin Decl. Ex. 374, KE00000302-333 at 322-323. Forest knew
that “the generic companies wouldn’t have settled without those provisions.” Litvin Decl. Ex.
252, Agovino Dep. 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed that, this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
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undisputed.
Cobalt
92. Forest’s settlement with Cobalt allows Cobalt to launch a generic memantine
hydrochloride product the later of “3 calendar months prior to the expiration of the ’703 patent,
including any extensions and/or pediatric exclusivity” or “the date that Cobalt obtains final
approval from the FDA.”
Defendants’ Evidence: Ex. 27, Cobalt Settlement Agreement, Exhibit B (License
Agreement), at §§ 1.15, 2.1, 3.2.
Response: Denied to the extent it implies that under certain circumstances, Cobalt
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date” provided in the Settlement and License Agreement with Forest, for the reasons stated in
Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
93. Cobalt was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 27, Cobalt Settlement Agreement, at Ex. B (License
Agreement) §§1.15, 2.1, 2.2, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Cobalt could not have launched its generic memantine products earlier than any agreed upon
“Launch Date,” for the reasons stated in Response to ¶ 81.
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Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
94. Under the license agreement Cobalt represented that “its attorney fees and costs to
date in the Action have exceeded $1,500,000,” and Forest agreed to pay Cobalt $1,500,000 to
defray a portion of the paid attorney fees and costs and to reflect a portion of the saved attorney
fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 27, Cobalt Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Cobalt’s
expended litigation costs. Denied as misleading to the extent Defendants intend to use this
purported fact to support an inference about its own avoided litigation costs which are the only
litigation costs that are relevant under Actavis. Defendants provide no evidence Forest made any
attempt to determine Cobalt’s expended litigation costs prior to agreeing to provide $1.5M in
litigation costs
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
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evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
95. Cobalt’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Cobalt to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 27, Cobalt Settlement Agreement, at Ex. B (License
Agreement) §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest,
Cobalt could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Cobalt’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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Dr. Reddy’s
96. Forest’s settlement with Dr. Reddy’s allows Dr. Reddy’s to launch a generic
memantine hydrochloride product the later of “3 calendar months prior to the expiration of the
’703 patent, including any extensions and/or pediatric exclusivity” or “the date that DRL obtains
final approval from the FDA.”
Defendants’ Evidence: Ex. 29, Dr. Reddy’s Settlement Agreement, at Ex. B (License
Agreement) §§ 1.16, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest, Dr.
Reddy’s could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Dr. Reddy’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
97. Dr. Reddy’s was eligible to begin marketing (per the settlement agreement,
without accounting for any required FDA approval) a generic memantine hydrochloride product
by July 11, 2015.
Defendants’ Evidence: Ex. 29, Dr. Reddy’s Settlement Agreement, at Ex. B (License
Agreement) §§ 1.16, 2.1, 3.2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts in Supp. of Mot. for Partial
Sum. J. on Count Three, Dkt. 147 ¶ 44.
Response: Denied to the extent it implies that absent the agreement with Forest, Dr.
Reddy’s could not have launched its generic memantine products earlier than any agreed upon
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“Launch Date” provided in Dr. Reddy’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
98. Under the license agreement Dr. Reddy “shall provide Plaintiffs with an
accounting of DRL’s expended legal fees and costs associated with the Action,” and Forest
would pay Dr. Reddy’s an amount up to a maximum total reimbursement of $1,000,000 to defray
a portion of the paid attorney fees and costs.
Defendants’ Evidence: Ex. 29, Dr. Reddy’s Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Dr. Reddy’s
expended litigation costs. Denied to the extent Defendants intend to use this purported fact to
support an inference about its own avoided litigation costs which are the only litigation costs that
are relevant under Actavis. Forest drafted its initial draft settlement agreement with Dr. Reddy’s.
See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 194:23-195:12; Litvin Decl. Ex. 252,
Agovino Dep. (Sept. 12, 2017) at 55:4-21. Forest sent Dr. Reddy’s a revised draft settlement
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agreement which “provide[d] additional value for your company” with “significant concessions”
including “$1,000,000 to compensate DRL for its legal fees and costs.” See Litvin Decl. Ex. 378,
Ryan Dep., Ex. 29, KE00000568-635 at 568. Dr. Reddy’s specifically rejected Forest’s initial
draft stating Dr. Reddy’s has expended over $1M in litigation costs, stating “I have not said that
and I will not take more than we have actually spent.” See Litvin Decl. Ex. 375, McCormick (Dr.
Reddy’s) Dep., Ex. 11, FRX-AT-03628446-482 at 446; Litvin Decl. Ex. 379, FRX-AT-
04318149-150 (email regarding Revised DRL settlement agreement). Dr. Reddy’s provided
Forest with invoices from its outside counsel to demonstrate its actual expended litigation costs.
Denied to the extent Defendants intend to use this purported fact to support an inference about its
own avoided litigation costs which are the only litigation costs that are relevant under Actavis.
See Litvin Decl. Ex. 376, McCormick (Dr. Reddy’s) Dep., Ex. 13, FRX-04231043-046.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
99. DRL’s litigation costs totaled $849,732.34.
Defendants’ Evidence: Ex. 36, FRX-AT-04231043; Ex. 37, FRX-AT-04229715, at -
9716; Ex. 38, FRX-AT-03634534.
Undisputed Record Evidence: Ex. 328, McCormick (Dr. Reddy’s) Dep. 107:15-119:16.
Response: Admitted.
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100. Dr. Reddy’s license agreement contained Generic Entry Early Acceleration
Clauses that allowed Dr. Reddy’s to launch its memantine product even earlier if (i) Forest
entered into an agreement with another generic company; (ii) another generic company obtained
a final court decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another
generic company launches “at risk.”
Defendants’ Evidence: Ex. 29, Dr. Reddy’s Settlement Agreement, at Ex B (License
Agreement) §§ 4.3, 4.4, 4.5
Response: Denied to the extent it implies Dr. Reddy’s could not have launched its
generic memantine products earlier than any agreed upon “Launch Date” provided in the
Settlement and License Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
101. Dr. Reddy’s negotiated the terms of the Generic Entry Early Acceleration Clauses
in its license agreement with Forest.
Defendants’ Evidence: Ex. 39, FRX-AT-03628446 (“Attached is a revised agreement
that we believe addresses the concerns you raised during our discussion.”).
Undisputed Record Evidence: Ex. 328, McCormick (Dr. Reddy’s) Dep. 157:4-24.
Response: Denied to the extent it implies DRL and Forest engaged in back and forth
negotiation regarding the generic early acceleration clauses. Forest knew that generics routinely
request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at
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202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is something
that the generics insist on, and that’s consistent across the board”). Forest drafted the initial
settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep. (Sept. 12,
2017) at 55:4-21. Forest’s initial draft settlement agreement to DRL contained the early
acceleration clauses. See Litvin Decl. Ex. 380, FRX-AT-04316862-895 at 883-884. Forest knew
that “the generic companies wouldn’t have settled without those provisions.” Litvin Decl. Ex.
252, Agovino Dep. 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed that, this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
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any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Lupin
102. Forest’s settlement with Lupin allows Lupin to launch a generic memantine
hydrochloride product the later of “3 calendar months prior to the expiration of the ’703 patent,
including any extensions and/or pediatric exclusivity” or “the date that Lupin obtains final
approval from the FDA.”
Defendants’ Evidence: Ex. 31, Lupin Settlement Agreement, at Ex. B (License
Agreement) §§ 1.12, 2.1, 3.2.
Response: Denied to the extent it implies Lupin could not have launched its generic
memantine products earlier than any agreed upon “Launch Date” provided in Lupin’s Settlement
and License Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
103. Lupin was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 31, Lupin Settlement Agreement, at Ex. B (License
Agreement) §§ 1.12, 2.1, 3.2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three ¶ 58.
Response: Denied to the extent it implies that absent the agreement with Forest,
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Lupin could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Lupin’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
104. Under the license agreement Lupin represented that “its attorney fees and costs to
date and related internal costs of support and assistance in the Action has exceeded $1,000,000,”
and Forest agreed to pay Lupin $1,000,000 to defray a portion of the paid attorney fees and costs
and to reflect a portion of the saved attorney fees and costs that Forest would not have to incur in
the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 31, Lupin Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Lupin’s
expended litigation costs in the litigation. Defendants provide no evidence that Forest made any
attempt to determine Lupin’s expended litigation costs prior to proposing $500,000 in litigation
costs. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 194:23-195:12; Litvin Decl. Ex.
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252, Agovino Dep. (Sept. 12, 2017) at 55:4-21; Litvin Decl. Ex. 381, KE00000203-233 at 203,
223 (August 11, 2009 email noting “[a]s you will see, Forest and Merz have made a significant
concession and offered $500,000 in attorney fees”).
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
105. Lupin’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Lupin to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 31, Lupin Settlement Agreement, at Ex. B (License
Agreement) §§ 4.4, 4.5, 4.6.
Response: Denied to the extent it implies Lupin could not have launched its generic
memantine products earlier than any agreed upon “Launch Date” provided in the Settlement and
License Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
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relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
106. Lupin negotiated the terms of the Generic Entry Early Acceleration Clauses in its
license agreement with Forest.
Defendants’ Evidence: Ex. 40, FRX-AT-04319774, at -9778 (“We agree with all of your
proposed revisions to the settlement agreement.”).
Response: Denied to the extent it implies that Forest and Lupin engaged in back and
forth negotiation regarding the generic early acceleration clauses. Forest knew that generics
routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017)
at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is
something that the generics insist on, and that’s consistent across the board”). Forest drafted the
initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s initial Lupin draft settlement agreement contained early
acceleration clauses. See Litvin Decl. Ex. 382, FRX-AT-04315180-193 at 180, 185-186 (draft
settlement agreement). Forest knew that “the generic companies wouldn’t have settled without
those provisions.” Litvin Decl. Ex. 252, Agovino Dep. at 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
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To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed that, this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Mylan
107. Forest’s settlement with Mylan allows Mylan to launch a generic memantine
hydrochloride product the later of “three (3) calendar months prior to the expiration of the ’703
patent, including any extensions and/or pediatric exclusivity” or “the date that Mylan obtains
final approval from the FDA.”
Defendants’ Evidence: Ex. 33, Mylan Settlement Agreement, at Ex. B (License
Agreement) §§ 1.13, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Mylan could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Mylan’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
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DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
108. Mylan was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 33, Mylan Settlement Agreement, at Ex. B (License
Agreement) §§ 1.13, 2.1, 3.2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three ¶ 72.
Response: Denied to the extent it implies that absent the agreement with Forest,
Mylan could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Mylan’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
109. Under the license agreement Mylan represented that “its attorney fees and costs to
date in the Action have exceeded $2,000,000,” and Forest agreed to pay Mylan $2,000,000 to
defray a portion of the paid attorney fees and costs and to reflect a portion of the saved attorney
fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 33, Mylan Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
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Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Mylan’s
expended litigation costs. Denied to the extent Defendants intend to use this purported fact to
support an inference about its own avoided litigation costs which are the only litigation costs that
are relevant under Actavis. Defendants provide no evidence Forest made any attempt to
determine Mylan’s expended litigation costs prior to initially proposing $1M in litigation costs.
See Litvin Decl. Ex. 137, FRX-AT-03633499 (September 25, 2009 email noting “[a]s you will
see, Forest and Merz have made a significant concession and offered $1,000,000 in attorney
fees”). Defendants provide no evidence that Forest made any attempt to determine Mylan’s
expended litigation costs prior to increasing its proposal to $2M in litigation costs. See Litvin
Decl. Ex. 126, FRX-AT-03516651-684 at 672 (draft settlement agreement). Mylan’s outside
counsel who negotiated the settlement agreement testified he did not know whether Mylan
actually ever represented to Forest that its litigation costs had exceeded $2M prior to executing
the Settlement and License Agreement. See Litvin Decl. Ex. 359, Silber (Mylan) Dep. at 12:11-
12:21 (“Q: In this section, Mylan represented that at the time of the agreement, its attorneys’
fees and costs, in the Namenda IR litigation had exceeded $2 million, Correct? ... A: I actually
was not involved in making that representation. I assume that it is true because it is in this
agreement”). Mylan produced a litigation report for the Forest Labs v (Namenda) matter totaling
$2,787,678.74. See Litvin Decl. Ex. 383, Silber (Mylan) Dep., Ex. 2, MYLMEMA-D-000001-
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002. However, there is no indication when this report was created or that it was ever provided to
Forest during settlement negotiation. Moreover, it contains bills up through September 30, 2010
– two months after the settlement agreement. See id.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
To the extent a clarification is needed, Mylan’s litigation fees and costs would still have
exceeded $2,000,000 had the two bills dated 8/27/2010 and 9/30/2010 not been accounted for in
Litvin Decl. Ex. 383.
110. Mylan’s litigation costs exceeded $2 million.
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 12:21-16:24; Ex. 41,
MYLMEMA-D-000001.
Response: Denied to the extent it implies Forest was aware of Mylan’s expended
litigation costs when initially proposing $1M, and later increasing to $2M in litigation costs.
Forest initially proposed $1M in litigation costs as part of a revised draft settlement agreement in
September 2008. See Litvin Decl. Ex. 137, FRX-AT-03633499-531 at 499, 518. Forest increased
its proposal to $2M in March 2010. See Litvin Decl. Ex. 126, FRX-AT-03516651-684 at 672.
Defendants provide no evidence Forest attempted to determine Mylan’s expended litigation costs
prior to either of these offers, for the reasons stated in Response to ¶ 109.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. DPPs’
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response does not provide any evidentiary basis to contest the statement and does not actually
contest the statement, but instead attempts to “contextualize or dispute the relevance of the
statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist.
LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
111. Mylan’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Mylan to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 33, Mylan Settlement Agreement, at Ex. B (License
Agreement), at §§ 4.3, 4.4, 4.5.
Undisputed Record Evidence: Ex. 329, Silber Dep. 16:20-24
Response: Denied to the extent it implies that absent the agreement with Forest,
Mylan could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Mylan’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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Orchid
112. Forest’s settlement with Orchid allows Orchid to launch a generic memantine
hydrochloride product the later of “3 calendar months prior to the expiration of the ’703 patent,
including any extensions and/or pediatric exclusivity” or “the date that Orchid obtains final
approval from the FDA.”
Defendants’ Evidence: Ex 32, Orchid Settlement Agreement, at Ex. B (License
Agreement) §§ 1.14, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Orchid could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Orchid’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
113. Orchid was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex 32, Orchid Settlement Agreement, at Ex. B (License
Agreement) §§ 1.14, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Orchid could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Orchid’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
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Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
114. Under license agreement Orchid represented that “its attorney fees and costs to
date in the Action ... have exceeded $2,000,000” and Forest agreed to pay Orchid $2,000,000 to
defray a portion of the paid attorney fees and costs and to reflect a portion of the saved attorney
fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex 32, Orchid Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Orchid’s
expended litigation costs. Denied as misleading to the extent Defendants intend to use this
purported fact to support an inference about its own avoided litigation costs which are the only
litigation costs that are relevant under Actavis. Defendants provide no evidence Forest made any
attempt to determine Orchid’s expended litigation costs prior to sending its first draft settlement
agreement providing for $1M in litigation costs. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7,
2017) at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep. (Sept. 12, 2017) at 55:4-21; Litvin
Decl. Ex. 384, KE00000270-301 at 289. Defendants provide no evidence Forest made any
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attempt to determine Orchid’s expended litigation costs prior to countering Orchid’s proposal for
$3M in litigation costs with $2M. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 261:17-
261:25 (“Q: Do you recall any discussions with Orchid about a $3 million payment to Orchid
from Forest? A: No. Q: Do you recall Orchid providing any documentation of the costs and fees
it incurred in connection with the litigation? A: I don’t recall specifically, no)”; Litvin Decl. Ex.
385, KE00000405-442 at 427 (draft settlement agreement); Litvin Decl. Ex. 386, KE00000909-
910 (same); Litvin Decl. Ex. 387, KE00000945-980 at 966 (same).
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
115. Orchid’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Orchid to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 32, Orchid Settlement Agreement, at Ex. B (License
Agreement) §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest,
Orchid could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Orchid’s Settlement and License Agreement with Forest, for the
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reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
116. Orchid negotiated the terms of the Generic Entry Early Acceleration Clauses in its
license agreement with Forest.
Defendants’ Evidence: Ex. 42, KE00000830 (“We will need to discuss a few substantive
issues.... [W]e can offer you a choice between two types of provisions.”); Ex. 43, FRX-
AT-03629461.
Response: Denied to the extent it implies Forest and Orchid engaged in back and
forth negotiation regarding the generic early acceleration clauses. Forest knew that generics
routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017)
at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is
something that the generics insist on, and that’s consistent across the board”). Forest drafted the
initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s initial Orchid draft settlement agreement contained early
acceleration clauses. Litvin Decl. Ex. 388, FRX-AT-04314619-629 at 619, 624. Forest knew that
“the generic companies wouldn’t have settled without those provisions.” Litvin Decl. Ex. 252,
Agovino Dep. 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
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at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed that, this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Sun
117. Forest’s settlement with Sun allows Sun to launch a generic memantine
hydrochloride product the later of “3 calendar months prior to the expiration of the ’703 patent,
including any extensions and/or pediatric exclusivity” or “the date that Sun obtains final
approval from the FDA.”
Defendants’ Evidence: Ex. 26, Sun Settlement Agreement, Ex. B (License Agreement)
§§ 1.12, 2.1, 3.2.
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Response: Denied to the extent it implies that absent the agreement with Forest, Sun
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date” provided in Sun’s Settlement and License Agreement with Forest, for the reasons stated in
Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
118. Sun was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 26, Sun Settlement Agreement, Ex. B (License Agreement),
at §§ 1.12, 2.1, 3.2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three ¶ 99.
Response: Denied to the extent it implies that absent the agreement with Forest, Sun
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date,” for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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119. Under license agreement Sun represented that “its attorney fees and costs to date
in the Action have exceeded $1,500,000” and Forest agreed to pay Sun $1,500,000 to defray a
portion of the paid attorney fees and costs and to reflect a portion of the saved attorney fees and
costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex 26, Sun Settlement Agreement, at Ex. B (License Agreement)
§ 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs....”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Sun’s expended
litigation costs. Denied to the extent Defendants intend to use this purported fact to support an
inference about its own avoided litigation costs which are the only litigation costs that are
relevant under Actavis. Defendants provide no evidence that Forest made any attempt to
determine Sun’s expended litigation costs prior to agreeing to provide $1.5M in litigation costs.
See Litvin Decl. Ex. 76, FRX-AT-03628098; Litvin Decl. Ex. 86, FRX-AT-03628100-131 (Sun
license agreement draft dated 9/21/2009).
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
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Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
120. Sun’s litigation costs exceeded $1,500,000.
Undisputed Record Evidence: Ex. 330, Nadkarni (Sun) Dep. 125:3-126:7.
Response: Denied to the extent it implies Forest was aware of Sun’s expended
litigation costs when sending its first draft settlement agreement providing for $1,500,000 in
litigation costs, for the reasons stated in Response to ¶ 119.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. DPPs’
response does not provide any evidentiary basis to contest the statement and does not actually
contest the statement, but instead attempts to “contextualize or dispute the relevance of the
statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist.
LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
121. Sun’s license agreement contained Generic Entry Early Acceleration Clauses that
allowed Sun to launch its memantine product even earlier if (i) Forest entered into an agreement
with another generic company; (ii) another generic company obtained a final court decision of
non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic company launches
“at risk.”
Defendants’ Evidence: Ex. 26, Sun Settlement Agreement, at Ex. B (License Agreement)
§§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest, Sun
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date” provided in Sun’s settlement and License Agreement with Forest, for the reasons stated in
Response to ¶ 81.
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Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
122. Sun negotiated the terms of the Generic Entry Early Acceleration Clauses in its
license agreement with Forest.
Defendants’ Evidence: Ex. 44, FRX-AT-03633799 at 818-820; Ex. 45, FRX-AT-
03633765.
Undisputed Record Evidence: Ex. 330, Nadkarni (Sun) Dep. 127:9-128:7.
Response: Denied to the extent it implies Forest and Sun engaged in back and forth
negotiation regarding the generic early acceleration clauses. Forest knew that generics routinely
request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at
202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is something
that the generics insist on, and that’s consistent across the board”). Forest drafted the initial
settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep. (Sept. 12,
2017) at 55:4-21. Forest’s initial Sun draft settlement agreement contained early acceleration
clauses. See Litvin Decl. Ex. 390, FRX-AT-04315194-206 at 199. Forest knew that “the generic
companies wouldn’t have settled without those provisions.” Litvin Decl. Ex. 252, Agovino Dep.
160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
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at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed that, this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Teva
123. Forest’s settlement with Teva allows Teva to launch a generic memantine
hydrochloride product “three (3) calendar months prior to the later of (a) expiration of the ’703
Patent, including any extensions thereof; and (b) any pediatric exclusivity period attached to the
’703 Patent, whether such extension or pediatric exclusivity was granted before, on, or after the
Execution Date.”
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Defendants’ Evidence: Ex. 28, Teva Settlement Agreement, at Ex. B (License
Agreement) §§ 1.14, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest, Teva
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date” provided in Teva’s Settlement and License Agreement with Forest, for the reasons stated
in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
124. Teva was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 28, Teva Settlement Agreement, at Ex. B (License
Agreement) §§ 1.14, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest, Teva
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date” provided in Teva’s Settlement and License Agreement with Forest, for the reasons stated
in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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125. Under the license agreement Teva represented that “its attorney fees and costs to
date in the Action have exceeded $1,000,000,” and Forest agreed to pay Teva $1,000,000 to
defray a portion of the paid attorney fees and costs and to reflect a portion of the saved attorney
fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 28, Teva Settlement Agreement, at Ex. B (License
Agreement) § 2.6.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Teva’s
expended litigation costs. Denied to the extent Defendants intend to use this purported fact to
support an inference about its own avoided litigation costs which are the only litigation costs that
are relevant under Actavis. Forest drafted the initial Teva draft settlement agreement. See Litvin
Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s initial Teva draft settlement agreement provided for $1M in
litigation costs. See Litvin Decl. Ex. 391, Rabinovic (Teva) Dep., Ex. 20, FRX-AT-03633179-
187 at 181. Defendants provide no evidence Forest made any attempt to determine Teva’s
expended litigation costs prior to proposing to provide $1M in litigation costs.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
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relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
126. Teva’s litigation costs exceeded $1,000,000.
Undisputed Record Evidence: Ex. 331, Rabinovic (Teva) Dep. 36:19-38:9; 86:19-87:9.
Response: Denied to the extent it implies Forest was aware of Teva’s expended
litigation costs when sending its first draft settlement agreement providing for $1M in litigation
costs, for the reasons stated in Response to ¶ 125.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. DPPs’
response does not provide any evidentiary basis to contest the statement and does not actually
contest the statement, but instead attempts to “contextualize or dispute the relevance of the
statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist.
LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
127. Teva’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Teva to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 28, Teva Settlement Agreement, at Ex. B (License
Agreement), at §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest, Teva
could not have launched its generic memantine products earlier than any agreed upon “Launch
Date” provided in Teva’s Settlement and License Agreement with Forest, for the reasons stated
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in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
128. Teva negotiated the terms of the Generic Entry Early Acceleration Clauses in its
license agreement with Forest.
Defendants’ Evidence: Ex. 46, FRX-AT-03627793; Ex. 47, FRX-AT-03627794, at -
7816-18.
Undisputed Record Evidence: Ex. 331, Rabinovic (Teva) Dep. 42:19-45:7.
Response: Denied to the extent it implies Forest and Teva engaged in back and forth
negotiation regarding the generic early acceleration clauses. Forest knew that generics routinely
request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at
202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is something
that the generics insist on, and that’s consistent across the board”). Forest drafted the initial
settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep. (Sept. 12,
2017) at 55:4-21. Forest’s initial Teva draft settlement agreement contained early acceleration
clauses. See Litvin Decl. Ex. 391, Rabinovic (Teva) Dep., Ex. 20, FRX-AT-03633179-187 at
181-182. Forest knew that “the generic companies wouldn’t have settled without those
provisions.” Litvin Decl. Ex. 252, Agovino Dep. at 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree, and it is therefore undisputed that, this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Upsher-Smith
129. Forest’s settlement with Upsher-Smith allows Upsher-Smith to launch a generic
memantine hydrochloride product the later of “3 calendar months prior to the expiration of the
’703 patent, including any extensions and/or pediatric exclusivity” or “the date that
Upsher-Smith obtains final approval from the FDA.”
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Defendants’ Evidence: Ex. 24, Upsher-Smith Settlement Agreement, at Ex. B (License
Agreement) §§ 1.13, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Upsher-Smith could not have launched its generic memantine products earlier than any agreed
upon “Launch Date” provided in the Upsher-Smith Settlement and License Agreement with
Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
130. Upsher-Smith was eligible to begin marketing (per the settlement agreement,
without accounting for any required FDA approval) a generic memantine hydrochloride product
by July 11, 2015.
Defendants’ Evidence: Ex. 24, Upsher-Smith Settlement Agreement, at Ex. B (License
Agreement) §§ 1.13, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Upsher-Smith could not have launched its generic memantine products earlier than any agreed
upon “Launch Date” provided in Upsher-Smith’s Settlement and License Agreement with Forest,
for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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131. Under the license agreement Upsher-Smith represented that “its attorney fees and
costs to date in the Action have exceeded $600,000,” and Forest agreed to pay Upsher-Smith
$600,000 to defray a portion of the paid attorney fees and costs and to reflect a portion of the
saved attorney fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 24, Upsher-Smith Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Upsher-Smith’s
expended litigation costs. Denied to the extent Defendants intend to use this purported fact to
support an inference about its own avoided litigation costs which are the only litigation costs that
are relevant under Actavis. Defendants provide no evidence Forest made any attempt to
determine Upsher-Smith’s expended litigation costs prior to agreeing to provide $600,000 in
litigation costs.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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132. Upsher-Smith’s license agreement contained Generic Entry Early Acceleration
Clauses that allowed Upsher-Smith to launch its memantine product even earlier if (i) Forest
entered into an agreement with another generic company; (ii) another generic company obtained
a final court decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another
generic company launches “at risk.”
Defendants’ Evidence: Ex. 24, Upsher-Smith Settlement Agreement, at Ex. B (License
Agreement) §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest,
Upsher-Smith could not have launched its generic memantine products earlier than any agreed
upon “Launch Date” provided in its Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
133. Upsher-Smith negotiated the terms of the Generic Entry Early Acceleration
Clauses in its license agreement with Forest.
Defendants’ Evidence: Ex. 48, FRX-AT-03626587, at -6588 (“here’s a recap of the big-
picture issues that USL would like to address with appropriate revisions or other
assurances”); Ex. 49, FRX-AT-03626726, at -6727.
Response: Denied to the extent it implies Forest and Upsher-Smith engaged in back
and forth negotiation regarding the generic early acceleration clauses. Forest knew that generics
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routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017)
at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is
something that the generics insist on, and that’s consistent across the board”). Forest drafted the
initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s initial Upsher-Smith draft settlement agreement contained
early acceleration clauses. Litvin Decl. Ex. 388, FRX-AT-04314619-629 at 621, 624. Forest
knew that “the generic companies wouldn’t have settled without those provisions.” Litvin Decl.
Ex. 252, Agovino Dep. at 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree and it is therefore undisputed that this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
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Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
Wockhardt
134. Forest’s settlement with Wockhardt allows Wockhardt to launch a generic
memantine hydrochloride product the later of “3 calendar months prior to the expiration of the
’703 patent, including any extensions and/or pediatric exclusivity” or “the date that Wockhardt
obtains final approval from the FDA.”
Defendants’ Evidence: Ex. 25, Wockhardt Settlement Agreement, at Ex. B (License
Agreement) § 1.12, 2.1, 3.2.
Response: Denied to the extent it implies Wockhardt could not have launched its
generic memantine products earlier than any agreed upon “Launch Date” provided in
Wockhardt’s Settlement and License Agreement with Forest, for the reasons stated in Response
to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2)
135. Wockhardt was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by July
11, 2015.
Defendants’ Evidence: Ex. 25, Wockhardt Settlement Agreement, at Ex. B (License
Agreement) § 1.12, 2.1, 3.2.
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Response: Denied to the extent it implies that absent the agreement with Forest,
Wockhardt could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Wockhardt’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
136. Under the license agreement Wockhardt represented that “its attorney fees and
costs to date in the Action have exceeded $1,000,000,” and Forest agreed to pay Wockhardt
$1,000,000 to defray a portion of the paid attorney fees and costs and to reflect a portion of the
saved attorney fees and costs that Forest would not have to incur in the Patent ‘703 litigation.
Defendants’ Evidence: Ex. 25, Wockhardt Settlement Agreement, at Ex. B (License
Agreement) § 2.5.
Response: Denied to the extent it implies that Forest’s payment to a generic for
expended litigation costs does not constitute a payment under FTC v. Actavis, Inc., 133 S. Ct.
2223, 2237 (2013) (the likelihood of payment bringing about anticompetitive effects depends on
“its scale in relation to the payor’s [Forest’s] anticipated future litigation costs...”) (emphasis
added). Denied to the extent it implies Forest attempted to determine whether its proposed
payment under Section 2.5 of the License Agreement had any real correlation to Wockhardt’s
expended litigation costs. Denied to the extent Defendants intend to use this purported fact to
support an inference about its own avoided litigation costs which are the only litigation costs that
are relevant under Actavis. Defendants provide no evidence Forest made any attempt to
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determine Wockhardt’s expended litigation costs prior to proposing $1.5M in litigation costs. See
Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 194:23-195:12; Litvin Decl. Ex. 252, Agovino
Dep. (Sept. 12, 2017) at 55:4-21; Litvin Decl. Ex. 393, KE00000035-067 at 54 (draft settlement
agreement).
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. Instead,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
137. Wockhardt’s litigation fees were approximately $1.85 million.
Undisputed Record Evidence: Ex. 351, Venkatesan (Wockhardt) Dep. 103:3-104:22.
Response: Denied to the extent it implies Forest was aware of Wockhardt’s expended
litigation costs when sending its first draft settlement agreement providing for $1.5M in litigation
costs, for the reasons stated in Response to ¶ 136.
Forest’s Objection: DPPs’ response is entirely nonresponsive to the stated fact. DPPs’
response does not provide any evidentiary basis to contest the statement and does not actually
contest the statement, but instead attempts to “contextualize or dispute the relevance of the
statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist.
LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
138. Wockhardt’s license agreement contained Generic Entry Early Acceleration
Clauses that allowed Wockhardt to launch its memantine product even earlier if (i) Forest
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entered into an agreement with another generic company; (ii) another generic company obtained
a final court decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another
generic company launches “at risk.”
Defendants’ Evidence: Ex. 25, Wockhardt Settlement Agreement, at Ex. B (License
Agreement) §§ 4.3, 4.4, 4.5.
Response: Denied to the extent it implies that absent the agreement with Forest,
Wockhardt could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Wockhardt’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
139. Wockhardt negotiated the terms of the Generic Entry Early Acceleration Clauses
in its license agreement with Forest.
Defendants’ Evidence: Ex. 50, FRX-AT-03626934 (“We believe this draft strikes a fair
balance of our respective clients.”); Ex. 51, FRX-AT-03626968 at 988-989.
Response: Denied to the extent it implies Forest and Wockhardt engaged in back and
forth negotiation regarding the generic early acceleration clauses. Forest knew that generics
routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017)
at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is
something that the generics insist on, and that’s consistent across the board”). Forest drafted the
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initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s initial Wockhardt draft settlement agreement contained
early acceleration clauses. See Litvin Decl. Ex. 393, KE00000035-067 at 56-57. Forest knew that
“the generic companies wouldn’t have settled without those provisions.” Litvin Decl. Ex. 252,
Agovino Dep. at 160:24-161:3.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree and it is therefore undisputed that this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
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undisputed.
Torrent
140. Forest’s settlement with Torrent allows Torrent to launch a generic memantine
hydrochloride product on the later of “(a) the expiration date of the ’703 Patent, including any
extensions and/or pediatric exclusivity, whether granted before, on or after the Effective Date; or
(b) the date that Torrent obtains final approval from the FDA.”
Defendants’ Evidence: Ex. 30, Torrent Settlement Agreement, at Ex. B (License
Agreement) §§ 1.11, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Torrent could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Torrent’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
141. Torrent was eligible to begin marketing (per the settlement agreement, without
accounting for any required FDA approval) a generic memantine hydrochloride product by
October 11, 2015, upon the expiry of Forest’s pediatric exclusivity.
Defendants’ Evidence: Ex. 30, Torrent Settlement Agreement, at Ex. B (License
Agreement) §§ 1.11, 2.1, 3.2.
Response: Denied to the extent it implies that absent the agreement with Forest,
Torrent could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Torrent’s Settlement and License Agreement with Forest, for the
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reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
142. The FDA approved the Torrent generic memantine hydrochloride product on
October 13, 2015; the first business day after the expiry of Forest’s pediatric exclusivity.
Public Document: FDA, Memantine Hydrochloride, Drugs@FDA, https://www.access
data.fda.gov/scripts/cder/daf/indEx.cfm?event=overview.process&ApplNo=200155.
Response: Denied to the extent it implies that absent the agreement with Forest,
Torrent could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Torrent’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
143. Torrent’s license agreement contained Generic Entry Early Acceleration Clauses
that allowed Torrent to launch its memantine product even earlier if (i) Forest entered into an
agreement with another generic company; (ii) another generic company obtained a final court
decision of non-infringement and/or invalidity of the ‘703 patent; or (iii) another generic
company launches “at risk.”
Defendants’ Evidence: Ex. 30, Torrent Settlement Agreement, at Ex. B (License
Agreement) §§ 4.3, 4.4, 4.5.
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Response: Denied to the extent it implies that absent the agreement with Forest,
Torrent could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Torrent’s Settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
144. Torrent negotiated the terms of the Generic Entry Early Acceleration Clauses in
its license agreement with Forest.
Defendants’ Evidence: Ex. 52, FRX-AT-04318722; Ex. 53, FRX-AT-04318750 at 764-
766.
Response: Denied to the extent it implies Forest and Torrent engaged in back and
forth negotiation regarding the generic early acceleration clauses. Forest knew that generics
routinely request early acceleration clauses. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017)
at 202:1-203:11 (“Q: So [generics] all insist on having a most favored nation ... that is
something that the generics insist on, and that’s consistent across the board”). Forest drafted the
initial settlement agreements. See id. at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep.
(Sept. 12, 2017) at 55:4-21. Forest’s early Torrent draft settlement agreement contained early
acceleration clauses. Litvin Decl. Ex. 394, Torrent-Memantine 00009577-9601 at 591-593.
Forest knew that “the generic companies wouldn’t have settled without those provisions.” Litvin
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Decl. Ex. 252, Agovino Dep. at 160:24-161:3
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent DPPs’ response could be construed as creating a dispute as to the specific
asserted fact, Forest and DPPs agree and it is therefore undisputed that this particular generic
manufacturer’s license agreement with Forest contained Generic Entry Early Acceleration
Clauses, such clauses are routinely requested by generics, and the generic companies would not
have settled the patent litigation without Generic Entry Early Acceleration Clauses.
Furthermore, in response to ¶ 318, DPPs responded that “As further admitted by Forest,
‘each Generic Entry Early Acceleration Clause was valuable to each of the Generic
Manufacturers,’ ‘was included in the settlement agreements at the demand of the Generic
Manufacturers,’ and ‘ensured competition amongst the first filing Generic Manufacturers should
any generic have negotiated an earlier settlement date.’ Defendants’ Statement at ¶¶ 351, 352,
and 356. Plaintiffs agree.” See DRSUF to ¶ 318 (emphasis added). Accordingly, this fact is
undisputed.
145. Forest’s expert opinion that the generic settlement agreements were not
anticompetitive is unrebutted, except with respect to Mylan.
Defendants’ Evidence: Ex. 54, Expert Report of Dr. Lona Fowdur (“Fowdur Rep.”) ¶ 41,
n. 103.
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Plaintiffs’ Admissions: Ex. 335, Elhauge (Sept. 29) Dep. 37:15-39:15; Ex. 368, Elhauge
(Nov. 10) Dep. 309:15-310:25l; Ex. 363, Lamb (Oct. 6) Dep. 231:20-21 (“[T]he reverse
payment between Forest and Mylan, as I understand, is the only reverse payment[sic]
challenged to be anticompetitive by the Plaintiffs.”). Not a single one of Plaintiffs’ eight
experts opine that any settlement was anticompetitive, except for the settlement
agreement with Mylan. See generally Ex. 55, Amended Reply Expert Report of Ernst R.
Berndt, Ph.D. (“Berndt Reply”) ¶ 1; Ex. 56, Amended Expert Reply Report, Dr. Russell
Lamb (“Lamb Reply”) ¶¶ 2-3.
Response: Denied to the extent it implies Plaintiffs’ claims related to the generic
settlement agreements being anticompetitive may only be rebutted by expert opinion. Plaintiffs’
decision to focus its expert reports on other aspects of its claims in no way concedes or allows
for Forest’s conclusory claim.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Furthermore, as explained in Section I of Defendants’ Reply Memorandum in
Support of Their Motion for Summary Judgment, DPPs have expressly or functionally
abandoned many of their claims, including their claim that the patent litigation settlements with
non-Mylan generics were anticompetitive. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
B. Forest’s Search for a Secondary Supplier of Ceftaroline
146. Ceftaroline is the active pharmaceutical ingredient (“API”) in the brand drug
Teflaro.
Public Document: FDA, Ceftaroline Fosamil, Drugs@FDA, https://www.accessdata
.fda.gov/drugsatfda_docs/label/2011/200327s001lbl.pdf.
Response Admitted.
147. Forest obtained the worldwide rights (excluding Japan) to Teflaro in 2007 when it
acquired Cerexa, Inc.
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Defendants’ Evidence: Ex. 332, Carnevale Dep. 38:14-24.
Public Document: Allergan, Allergan Receives FDA Approval of Teflaro® (ceftaroline
fosamil) for Pediatric Patients, https://www.allergan.com/investors/news/thomson-
reuters/allergan-receives-fda-approval-of-teflaro-ceftaro.
Response: Admitted.
148. On April 30, 2008, Forest entered a Development and Supply Agreement with
ACS Dobfar (“Dobfar”) for Ceftaroline.
Defendants’ Evidence: Ex. 57, FRX-AT-03522446 at 447-448.
Response: Admitted.
149. Dobfar acted as Forest’s primary supplier of Ceftaroline API.
Defendants’ Evidence: Ex. 332, Carnevale Dep. 144:8-10 (“Dobfar is our primary
supplier for ceftaroline.”); Ex. 324, Solomon (Sept. 7) Dep. 214:2-215:20 (“[T]he supply
arrangement we made with Orchid was highly favorable to us at a much lower price than
what we were then paying to Dobfar, the Italian company who was our sole supplier of
ceftaroline.”); Ex. 333, Mears Dep. 181:15-184:7 (“[W]e had a primary supplier in ACS
Dobfar.”).
Response: Admitted.
150. Forest’s agreement with Dobfar contemplated a price of €7,37 per vial (or $9.95,
based on the exchange rate on March 23, 2010 – €1,00 = $1.35).
Defendants’ Evidence: Ex. 57, FRX-AT-03522446 at 450 (§ 5 “Pricing”).
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 214:2-215:20 (“At that point we
were paying over $10 a vial to Dobfar.”).
Public Document: X-Rates, Historic Lookup: EUR to USD Conversion, http://www.x-
rates.com/historical/?from=EUR&amount=1&date=2010-03-23.
Response: Denied. Forest’s agreement with Dobfar contemplated two distinct pricing
structures. See Litvin Decl. Ex. 395, FRX-AT-03522446-464 at 450-451. Forest’s agreement
provided for €7.37per vial for the Development Order of 2,000 kga of sterile ceftaroline
equivalent to 3,300,000 filled and finished 600 mga vials (“Development Period”). See id.
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However, upon completion of the Development Period, “Forest and Dobfar will review Dobfar’s
costs and establish a new price per vial for the “Commercial Period” whereby Forest will
purchase “(a) the lesser of 60% of commercial requirements or 2,000,000 vials during the first
(3) years ... and (b) the lesser of 60% of commercial requirements or 3,000,000 vials during the
fourth, fifth years and any successive period ... provided Dobfar offers a price/Vial which is not
more than 10% above that offered by comparable third party sources ensuring comparable
quality to Dobfar and manufacturing the Vials in FDA approved plants.” See id. at 449-450.
Forest may reduce its minimum purchase requirement to 20% of its commercial requirements
should Dobfar’s pricing remain in excess of 10% above comparable third-party pricing upon
Forest notification and Dobfar having an opportunity to rectify. See id.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
151. Although Forest had secured a primary supplier of ceftaroline, at the time, Forest
sought to dual source its drug products in order to avoid shortages.
Defendants’ Evidence: Ex. 332, Carnevale Dep. 38:14-24, 77:6-78:5; Ex. 333, Mears
Dep. 181:15-184:7 (“[L]ooking for second source was something, as I mentioned, we did
for all of our drugs.”).
Response: Admitted.
152. As of at least September 3, 2008, Forest was looking for a secondary supplier of
ceftaroline API.
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Defendants’ Evidence: Ex. 332, Carnevale Dep. 186:24-4 (“Q: So is it fair to say that as
of September 3, 2008, Forest was looking for a secondary supplier of ceftaroline API? A:
Yes.”).
Defendants’ Evidence: Ex. 58, FRX-AT-03655713.
Response: Admitted.
153. Because ceftaroline is a cephalosporin antibacterial, the FDA recommends that a
manufacturing facility has an area that is dedicated to manufacturing ceftaroline and that is
“completely and comprehensively” separated from areas of the facility in which other products
are manufactured.
Public Document: FDA, Guidance for Industry, Non-Penicillin Beta-Lactam Drugs: A
CGMP Framework for Preventing Cross-Contamination, https://www.fda.gov/
downloads/drugs/guidances/ucm246958.pdf (“FDA recommends that the area in which
any [cephalosporins are] manufactured be separated from areas in which any other
products are manufactured, and have independent air handling system” and that “the
section of a facility dedicated to manufacturing [cephalosporins] be isolated (i.e.,
completely and comprehensively separated) from areas in the facility in which non-
penicillin products are manufactured.”).
Response: Denied on the grounds Defendants’ purported evidence to support ¶ 153
was not issued until April 2013 – three years after execution of the Ceftaroline Agreement.
Defendants provide no evidence as to FDA recommendations in place at the time of ceftaroline
negotiations in 2008 – 2010.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2)
154. While searching for a secondary supplier of ceftaroline, Forest recognized that
there were only a limited number of companies that were equipped to manufacture ceftaroline
according to FDA guidelines and Forest’s own internal standards.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 215:22-218:9 (“You’re talking
about a sterile cephalosporin so there are a limited number of supplies globally who can
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make sterile cephalosporins. It’s a very specified manufacturing and any company that
does it can’t do anything else because once you’ve – from the FDA’s point of view, once
you’ve contaminated a facility with these cephalosporins, you can’t use it for any other
kind of manufacturing so there are very few facilities globally. They are highly dedicated
and they are difficult to find.”); Ex. 333, Mears Dep. 181:15-184:7 (“Ceftaroline was
somewhat unique, in the sense that it was a sterile manufacturing suite for cephalosporin
... and the ceftaroline sourcing project in terms of looking for second source was
something, as I mentioned, we did for all of our drugs, but it was particularly challenging
in the antibiotics space. I mean, antibiotics are notoriously underfunded. It is hard to find
supply partners. It is hard to find supply partners that have the right size facility and
sterile capabilities that are stable. And Orchid was one of those candidates. And so I was
very interested in having a positive business relationship on ceftaroline with Orchid.”);
Ex. 332, Carnevale 40:21-17 (“And since this was an antibiotic, you needed to have a
facility that was, you know, very clean and qualified and was able to make antibiotics in
the way we wanted it to be made.”).
Response: Denied to the extent it mischaracterizes Forest’s Director of Alliance
Management Robert Carnevale’s testimony about Forest’s belief about the number of potential
suitable ceftaroline suppliers. Carnevale testified Orchid considered and prepared analyses for at
least three other Indian ceftaroline suppliers other than Orchid – Dr. Reddy’s Laboratories, Lupin
and Wockhardt. See Litvin Decl. Ex. 396, Carnevale Dep. (Aug. 23, 2017) at 38:23-40:24.
Forest’s own documents also show two other potential ceftaroline suppliers – Dobfar (Orchid’s
primary ceftaroline supplier) and Patheon. See Litvin Decl. Ex. 395, FRX-AT-03522446-454
(Dobfar letter and term sheet related to ceftaroline); Litvin Decl. Ex. 397, FRX-AT-04626046-
051 at 047(presentation regarding “Second Drug Product Supplier”). Forest did not approach
other earlier-settling generic defendants about potentially supplying ceftaroline. See Litvin Decl.
Ex. 253, Gupta (Amneal) Dep. (July 27, 2017) at 139:11-15; Litvin Decl. Ex. 339, Rabinovic
(Teva) Dep. (July 18, 2017) at 68:9-15; Litvin Decl. Ex. 265, McCormick (DRL) Dep. (July 20,
2017) at 202:19-203:14; Litvin Decl. Ex. 359, Silber (Mylan) Dep. (Aug. 3, 2017) at 89:1-4.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
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“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
To the extent a clarification is necessary, DPPs admit in their response that only five
potential suppliers were considered, which is a limited number, and cite no evidence suggesting
that any of those suppliers other than Orchid was in fact equipped to manufacture ceftaroline
according to FDA guidelines and Forest’s own internal standards. Thus, DPPs’ evidence does
not dispute the stated fact, and the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
155. Forest began negotiating with Orchid to be a potential secondary supplier of
ceftaroline API in February 2008.
Defendants’ Evidence: Ex. 59, FRX-AT-04390036 at 38.
Response: Admitted.
156. On November 24, 2008 Forest and Orchid executed a Memo of Understanding
(“MOU”) for the purpose of “explor[ing] a collaborative relationship for the long term
development, manufacture and supply of Ceftaroline.”
Defendants’ Evidence: Ex. 60, FRX-AT-04624979.
Response: Admitted.
157. The MOU provided that Orchid would synthesize 30 grams of sterile API in three
batches, and if Forest approved the batches, the parties would begin negotiating a definitive
agreement for Orchid to be a supplier of ceftaroline.
Defendants’ Evidence: Ex. 60, FRX-AT-04624979.
Response: Admitted.
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158. Forest continued to consider other potential secondary suppliers of ceftaroline
API throughout 2009.
Defendants’ Evidence: Ex. 332, Carnevale Dep. 38:14-39:5 (“Q. Who were the other
potential secondary suppliers? A. We looked at a number of companies. Dr. Reddy’s, Dr.
Reddy’s Laboratories. Lupin. Another company called Wockhardt.”), 179:17-181:5
(acknowledging the same three companies and Orchid as possible secondary suppliers
and noting that there may have been others considered).
Response: Denied as Defendants provide no evidence to support Robert Carnevale’s
testimony that Forest considered any potential general ceftaroline secondary suppliers other than
Orchid during 2009. Defendants provide evidence that following concerns about the readiness of
Dobfar’s manufacturing facility in July 2009, Forest did consider one other possible ceftaroline
supplier, but only to back-fill any potential Dobfar production shortages. See Litvin Decl. Ex.
398, FRX-AT-04625903-904 (July 9, 2009 email regarding Patheon & Orchid fill line back up).
However, this supplier could not provide API, only finished ceftaroline product. See Litvin Decl.
Ex. 399, FRX-AT-04626045; Litvin Decl. Ex. 397, FRX-04626046-051 at 048. Robert
Carnevale’s testimony did not indicate any problems with any of the other potential ceftaroline
suppliers (Dr. Reddy’s, Lupin, and Wockhardt) Forest allegedly considered and analyzed. See
Litvin Decl. Ex. 396, Carnevale Dep. (Aug. 23, 2017) at 39:6-40:24 (“Q: Do you know why
[David Solomon] chose Orchid as opposed to the other companies you mentioned? A: “I mean, I
don’t know exactly why. I can tell you that we ... we looked at all those other companies as well.
And we also did site visits to India to look at the companies ... Q: But you don’t know why Dr.
Solomon chose Orchid? A: I am assuming he chose them because they were a qualified supplier
... or the best qualified supplier out of all of the other ones”). Defendants provide no evidence
that Forest ever considered any of them to address a potential Dobfar production shortage. Forest
did not approach other earlier-settling generic defendants about potentially supplying ceftaroline.
See Litvin Decl. Ex. 253, K. Gupta (Amneal) Dep. (July 27, 2017) at 139:11-15; Litvin Decl. Ex.
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339, Rabinovic (Teva) Dep. (July 18, 2017) at 68:9-15; Litvin Decl. Ex. 265, McCormick (DRL)
Dep. (July 20, 2017) at 202:19-203:14; Litvin Decl. Ex. 359, Silber (Mylan) Dep. (Aug. 3, 2017)
at 89:1-4.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
To the extent a clarification is necessary, DPPs response does not question Mr.
Carnevale’s testimony about other suppliers, but rather seems to be questioning whether there is
evidence in addition to Mr. Carnevale’s testimony. DPPs admit in their response that Forest did
consider at least one other potential secondary supplier of ceftaroline (Dr. Reddy’s), and thus this
statement of fact is not in dispute. DPPs also contain, in their response to ¶ 154, that four
suppliers other than Orchid were considered. Moreover, as discussed below, Forest employees
visited the Indian facilities of Orchid, Dr. Reddy’s, Lupin, and Wockhardt in 2009 to evaluate
them as potential ceftaroline API suppliers. See DRSUF ¶ 159. The specific deposition
testimony DPPs cite as to one of these entities, Dr. Reddy’s, does not contain questions of the
witness about ceftaroline, and in any event the testifying witness did not begin working at Dr.
Reddy’s until January 2013, years after the ceftaroline term sheet with Orchid was signed. See
Litvin Decl. Ex. 265, McCormick (DRL) Dep. 204:6-8.
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159. In May 2009, Forest employees went to India to visit the facilities of Orchid, Dr.
Reddy’s, Lupin, and Wockhardt to evaluate them as potential ceftaroline API suppliers.
Defendants’ Evidence: Ex. 332, Carnevale Dep. 42:12-43:6
Response: Denied. Defendants provide no evidence that Forest visited Dr. Reddy’s,
Lupin’s, and/or Wockhardt’s Indian facilities. See Litvin Decl. Ex. 396, Carnevale Dep. (Aug.
23, 2017) at 39:25-40:14; 179:5-20.
Forest’s Objection: The evidence cited in DPPs’ response does not dispute, but instead
confirms that Forest visited four different cities in India and four different potential secondary
suppliers: “[W]e visited Wockhardt, Lupin, Dr. Reddy’s and Orchid. Four.” Litvin Decl. Ex.
396, Carnevale (Forest) Dep. 179:5-20. Because DPPs have cited no contradictory evidence to
support their denial, this fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
160. Forest believed Orchid had “the best looking and best facility for a supplier [,a]nd
since [ceftaroline] was an antibiotic, [Forest] needed to have a facility that was, you know, very
clean and qualified and was able to make antibiotics in the way [Forest] wanted it to be made.”
Defendants’ Evidence: Ex. 332, Carnevale Dep. 39:21-40:17.
Response: Denied to the extent it implies that Robert Carnevale testified that Forest
chose Orchid because of the quality of its facilities as compared to other facilities. Carnevale
stated Orchid “probably had the best looking and best facility” but he did not know why David
Solomon chose Orchid, Carnevale just “assum[ed] [Solomon] chose [Orchid] because they were
a qualified supplier ... or the best qualified supplier out of the other ones. See Litvin Decl. Ex.
396, Carnevale Dep. (Aug. 23, 2017) at 39:21-40:24. However, Forest did not consider the
quality of Orchid’s facilities when seeking a potential ceftaroline back-fill provider in July 2009.
See Litvin Decl. Ex. 399, FRX-AT-04626045; Litvin Decl. Ex. 397, FRX-04626046-051.
Moreover, Forest Vice President of Business Development David Solomon expressed doubt
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about Orchid’s capabilities. See Litvin Decl. Ex. 402, FRX-AT-04624573-574 (“I will say I am
still skeptical that Orchid will really deliver on what they have suggested”). Solomon’s
skepticism turned out to be well-founded as Orchid never provided Forest with any commercial
supply of ceftaroline. See Litvin Decl. Ex. 403, FRX-AT-04627556-577; Litvin Decl. Ex. 400,
FRX-AT-04535254-255; Litvin Decl. Ex. 401, FRX-AT-04535269-271; Litvin Decl. Ex. 404,
Mears Dep. (Aug. 30, 2017) at 175:13-21.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
C. The Ceftaroline Supply Agreement with Orchid
161. On March 23, 2010, Forest and Orchid executed the Development and Supply
Agreement for Ceftaroline Binding Term Sheet.
Defendants’ Evidence: Ex. 62, FRX-AT-00000417 (“Ceftaroline Term Sheet”), at 426
Plaintiffs’ Admissions: DPPs’ Mem. in Opp’n to Mot. to Dismiss, Dkt. No. 69 at 24.
Response: Admitted.
162. Pursuant to the Ceftaroline Term Sheet, Forest would pay Orchid milestone
payments up to $840,000 (the “Development Fee”) in consideration for Orchid’s manufacture of
Development Batches.
Defendants’ Evidence: Ex. 57, Ceftaroline Term Sheet, § 6.
Plaintiffs’ Admissions: DPPs’ Memo. in Opp’n to Mot. to Dismiss, Dkt. No. 69 at 24.
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Response: Denied to the extent it mischaracterizes the “Development Fee” in the
Development and Supply Agreement as “milestone payments.” Forest explained it was “paying
up-front for the Development Batches.” See Litvin Decl. Ex. 405, FRX-AT-00000417-427 at
419-420. The Development and Supply Agreement “Development Fee” payments are not tied to
specific benchmarks, but are simply installment payments broken up over the three operative
development periods. Twenty-five percent (25%) of the Development Fee was payable upon
execution of the Agreement, prior to commencement of the work contemplated under the
agreement. See id. at 419. An additional fifty percent (50%) was payable upon delivery of all
three (3) development batches. See id. at 420. The remaining twenty-five percent (25%) was
payable upon completion of all final documentation for Forest FDA filings. See id. The payments
are not tied to any real development benchmarks or the Project Plan timeline attached to the end
of the agreement. See id. at 427. Defendants’ Statement of Uncontested Fact No. 163 also states
“[the] Development Fee was to be paid according to a schedule” not upon reaching specific
“milestones.”
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. As explained in Section I of Defendants’ Reply Memorandum in
Support of Their Motion for Summary Judgment, DPPs also have functionally abandoned many
of their claims, including their claim that the Ceftaroline Term Sheet was anticompetitive, and
DPPs’ response appears to be intended to support this abandoned claim. DPPs’ response thus
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consists of improper argument and advances a claim that they have abandoned. To the extent a
clarification is needed, the undisputed assertion that the Development Fee was to be paid
according to a schedule does not contradict the characterization of said fee as a milestone
payment. See DRSUF Response to ¶ 163; see also, Litvin Decl. Ex. 401, FRX-AT-04535269, at
269. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
163. The Development Fee was to be paid according to a schedule – Forest agreed to
pay Orchid $210,000 upon the execution of the Term Sheet, $420,000 upon timely completion of
the manufacture of three batches of 35,000 vials each, and $210,000 upon completion of
applicable stability work and all supporting documentation needed for Forest’s regulatory filings.
Defendants’ Evidence: Ex. 57, Ceftaroline Term Sheet, § 6.
Plaintiffs’ Admissions: Ex. 375, DPPs’ Objs. and Resps. to Def.’s First Interrogs. (Jun.
14, 2017) at 13 (Response to Interrogatory No. 7).
Response: Admitted.
164. The Term Sheet’s Development Fee reflected a price of $8.00 per vial.
Defendants’ Evidence: Ex. 57, Ceftaroline Term Sheet, § 6.
Response: Denied to the extent it implies Orchid would receive $8.00 per vial for
anything other than the three (3) development batches of 35,000 vials each under the
Development and Supply Agreement between Orchid and Forest for Ceftaroline. The
“Development Price” of $8.00 per vial only applies to “the Vials contained in the development
batches.” See Litvin Decl. Ex. 405, FRX-AT-00000417-427 at 417 (§6 “Payments/Pricing:
Development Batches”). Orchid would only receive $3.75 per vial for validation batches during
the Commercial Period. See id. At 418 (§6 “Payments/Pricing: Validation Batches”). Forest and
Orchid would renegotiate a new per vial price based upon certain factors following completion
of the validation batches. See id. at 418 (§6 “Payments/Pricing: Commercial Period”).
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Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. As explained in Section I of Defendants’ Reply Memorandum in
Support of Their Motion for Summary Judgment, DPPs also have functionally abandoned many
of their claims, including their claim that the Ceftaroline Term Sheet was anticompetitive, and
DPPs’ response appears to be intended to support this abandoned claim. DPPs’ response thus
consists of improper argument and advances a claim that they have abandoned. Accordingly, the
fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
165. When Orchid began producing validation batches, the Term Sheet contemplated
that the price per vial would drop to $3.75 per vial.
Defendants’ Evidence: Ex. 57, Ceftaroline Term Sheet, § 6.
Response: Denied to the extent it implies Orchid would receive $3.75 per vial for
anything other than the validation batches following the Development Period under the
Development and Supply Agreement. Orchid would receive $3.75 per vial for validation batches
during the Commercial Period. See Litvin Decl. Ex. 405, FRX-AT-00000417-427 at 418 (§6
“Payments/Pricing: Validation Batches”). However, Forest and Orchid would renegotiate a new
per vial price based upon certain factors following completion of the validation batches “that
reflect[ed] one hundred percent (100%) of cost savings achieved during the Development Period
and eighty-five (85%) of cost savings achieved during the manufacture of the Validation
Batches.” See id. at 420 (§6 “Payments/Pricing: Commercial Period”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. As explained in
Section I of Defendants’ Reply Memorandum in Support of Their Motion for Summary
Judgment, DPPs also have functionally abandoned many of their claims, including their claim
that the Ceftaroline Term Sheet was anticompetitive, and DPPs’ response appears to be intended
to support this abandoned claim. DPPs’ response thus consists of improper argument and
advances a claim that they have abandoned. Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
166. Further, when Orchid began producing commercial batches of ceftaroline, Forest
would pay between $3.25 and $3.75 per vial.
Defendants’ Evidence: Ex. 57, Ceftaroline Term Sheet, § 6.
Response: Denied to the extent it implies Orchid would receive between $3.25 and
$3.75 per vial for commercial batches under the Development and Supply Agreement. The
agreement specifically states that the commercial batches “will be no higher than the prices set
forth below” ($3.25 to $3.75 per vial). See Litvin Decl. Ex. 405, FRX-AT-00000417-427 at 420-
421 (§6 “Payments/Pricing: Commercial Period”) (emphasis added). This does not establish a
$3.25 to $3.75 per vial price, but rather a ceiling of $3.25 to $3.75 per vial.
Forest’s Objection: Forest agrees that, when Orchid began producing commercial
batches of ceftaroline, Forest would pay Orchid no more than $3.25 to $3.75 per vial.
Accordingly, this fact is undisputed.
167. The prices per vial contemplated by the Term Sheet all represented significant
cost savings for Forest who was, at the time of the agreement, paying “over $10 per vial” to
Dobfar.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 214:6-215:20 (“[T]he supply
arrangement we made with Orchid was highly favorable to us at a much lower price than
what we were then paying to Dobfar....At that point we were paying over $10 a vial to
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Dobfar and these guys were going to provide vials for three and a quarter. It’s a great deal
for us. A third of what we were paying for the competitor.”); compare Ceftaroline Term
Sheet, § 6 (showing $8.00, $3.75, and $3.25 per vial prices) with Ex. 57, FRX-AT-
03522446 at 450 (showing € 7,37 price per vial).
Public Document: X-Rates, Historic Lookup: EUR to USD Conversion, http://www.x-
rates.com/historical/?from=EUR&amount=1&date=2010-03-23 (showing exchange rate
on March 23, 2010 to be €1,00 = $1.35).
Response: Denied to the extent it implies Forest agreed to pay Dobfar $10 per vial for
all of the ceftaroline supplied. Forest agreed to pay Dobfar around $10 per vial (€7.37) for its
Development Order. See Litvin Decl. Ex. 395, FRX-AT-03522446-464 at 449-450 (§ 3
“Orders/Minimums” and §5 “Pricing”). Following the Development Period, “Forest and Dobfar
will review Dobfar’s costs and establish a new price/Vial for the Commercial Period that reflects
all cost savings achieved during the Development Period.” See id. at 450-451 (§ 5 “Pricing:
Commercial Period”). Defendants also provide no evidence Forest actually paid Dobfar $10 per
vial price prior to execution of the Orchid ceftaroline agreement. Dobfar did not send its first
ceftaroline invoice to Forest until March 31, 2010. See Litvin Decl. Ex. 395, FRX-AT-
04626452-460 at 458-459.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. As explained in
Section I of Defendants’ Reply Memorandum in Support of Their Motion for Summary
Judgment, DPPs also have functionally abandoned many of their claims, including their claim
that the Ceftaroline Term Sheet was anticompetitive, and DPPs’ response appears to be intended
to support this abandoned claim. DPPs’ response thus consists of improper argument and
advances a claim that they have abandoned. Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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168. Forest also agreed to pay Orchid a consulting and service fee of $2 million in
three installments – the first $666,666 was due upon the supply of API for the first validation
batch of 350,000 vials, the second $666,666 was due upon the supply of API for the second
validation batch of 350,000 vials, and the third installment of $666,668 was due upon the supply
of API for the third batch of 350,000 vials.
Defendants’ Evidence: Ex. 57, Ceftaroline Term Sheet, at 424-25 (§ 13).
Plaintiffs’ Admissions: DPPs’ Memo. in Opp’n to Mot. to Dismiss, Dkt. No. 69 at 24.
Response: Admitted.
169. Upon execution of the agreement, Forest paid Orchid the first $210,000 milestone
payment.
Defendants’ Evidence: Ex. 63, FRX-AT-04626461; Ex. 64, FRX-AT-04626465; Ex. 65,
FRX-AT-04626489 (“Please find attached confirmation of Orchid Milestone paid today
US210K”); Ex. 66, FRX-AT-04626476; Ex. 67, FRX-AT-04535254 (“The following
milestones were paid to Orchid: $210,000 upon execution of the agreement.”).
Response: Denied to the extent it mischaracterizes the initial $210,000 installment
payment provided to Orchid upon execution of the Development and Supply Agreement as a
“milestone” payment, as the payment was made for simply executing the agreement, not for
actual performance. Forest explained the Development Fee reflected Forest was “paying up-front
for the Development Batches.” See Litvin Decl. Ex. 405, FRX-AT-00000417-427 at 419-420 (§
6 “Payments/Pricing”). ¶ 163 also states “[the] Development Fee was to be paid according to a
schedule” not upon reaching specific “milestones.” Orchid never completed any actual
performance-based “milestones.”
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
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“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. As explained in Section I of Defendants’ Reply Memorandum in
Support of Their Motion for Summary Judgment, DPPs also have functionally abandoned many
of their claims, including their claim that the Ceftaroline Term Sheet was anticompetitive, and
DPPs’ response appears to be intended to support this abandoned claim. DPPs’ response thus
consists of improper argument and advances a claim that they have abandoned. To the extent a
clarification is needed, the undisputed assertion that the Development Fee was to be paid
according to a schedule does not contradict the characterization of said fee as a milestone
payment. See Plaintiffs’ Admission to ¶ 163. See also, Litvin Decl. Ex. 401, FRX-AT-
04535269, at 269. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
170. However, Orchid was ultimately unable to complete the other milestones
contemplated in § 6 of the Term Sheet.
Defendants’ Evidence: Ex. 67, FRX-AT-04535254 (“no vials were manufactured and
API continues to be stored at Orchid”); Ex. 68, FRX-AT-04535269 at 270 (“In July 2011
Orchid’s manufacturing site was shut down for 6 months by the Indian government for
issues around Orchid’s pollution control in relation to solid waste.”), at 271 (“During the
development of the API process there have been a number of issues that have caused
significant delays to the project timeline ... the registration batches can not [sic] be used
for future batches and a new plan will have to be developed.”); Ex. 332, Carnevale Dep.
49:3-18 (noting that Orchid was able to manufacture “the small amount that we asked
them to manufacture just to see if they could manufacture it” but “when they wanted to
scale it up, they were not able to do that”).
Response: Denied to the extent it implies Orchid completed any actual performance-
based “milestones.” The only “milestone” Orchid completed was executing the Development and
Supply Agreement. See Litvin Decl. Ex. 407, FRX-AT-04628136-139 at 137.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. As explained in
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Section I of Defendants’ Reply Memorandum in Support of Their Motion for Summary
Judgment, DPPs also have functionally abandoned many of their claims, including their claim
that the Ceftaroline Term Sheet was anticompetitive, and DPPs’ response appears to be intended
to support this abandoned claim. DPPs’ response thus consists of improper argument and
advances a claim that they have abandoned. Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
171. Because Orchid did not manufacture any of the 35,000 vials required under the
second milestone in § 6, Forest paid Orchid $210,000, or 50 percent of the contemplated
milestone payment as consideration for Orchid having completed API manufacturing.
Defendants’ Evidence: Ex. 67, FRX-AT-04535254 (“The following milestones were
paid to Orchid: $210,000 upon execution of the agreement, $210,000 upon
manufacturing of API for registration batches. This is 50% of the $420,000 milestone that
is associated with completion of manufacture of 35,000 vials by Orchid. While no vials
were manufactured and API continues to be stored at Orchid, as an exception we paid
50% of the milestone in 2012 for completion of API manufacturing.”).
Response: Denied to the extent it neglects to mention that despite failing to produce
any of the vials required under § 6 of the Development and Supply Agreement, Forest provided
Orchid with fifty percent (50%) of the second “milestone” payment, at least in part, because of
“Orchid’s financial difficulties” at the time. See Litvin Decl. Ex. 407, FRX-AT-04628136-139 at
137 (“Since Orchid has not delivered vials to Forest ... we did not believe that the second
milestone payment has been reached. However, considering Orchid’s financial difficulties,
Forest made the generous gesture of giving 50% of the milestone payment in advance of it
becoming due”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
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“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. As explained in Section I of Defendants’ Reply Memorandum in
Support of Their Motion for Summary Judgment, DPPs also have functionally abandoned many
of their claims, including their claim that the Ceftaroline Term Sheet was anticompetitive, and
DPPs’ response appears to be intended to support this abandoned claim. DPPs’ response thus
consists of improper argument and advances a claim that they have abandoned. Accordingly, the
fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
172. Forest paid Orchid for its partial performance, and did not pay Orchid the entire
$840,000 development fee contemplated in the Term Sheet, nor did it pay any of the additional
consulting fees.
Defendants’ Evidence: Ex. 69, Expert Report of Phillip Green (“Green Rep.”) ¶ 33
(“Because Orchid did not fully perform, Forest paid Orchid only the initial upfront[sic]
payment and half of the first milestone. The payments made by Forest to Orchid evidence
the pay-for-service nature of the Orchid Agreement.”); Ex. 67, FRX-AT-04535254 (“as
an exception we paid 50% of the milestone in 2012 for completion of API
manufacturing.”).
Response: Denied to the extent it implies Orchid achieved “partial performance” of
the Development and Supply Agreement. Various Forest executives stated Orchid failed to
produce any vials of ceftaroline to Forest. See Litvin Decl. Ex. 396, Carnevale Dep. (Aug 23,
2017) at 49:2-49:24 (“Q: Did Orchid end up manufacturing the product? A: “[T]hey ended up
manufacturing the small amount that we asked them to manufacture just to see if they could
manufacture it.... [W]hen they wanted to scale it up, they were not able to do that ... Q: But it
seemed like they would be able to do it, but in the end they weren’t able to do it? A: Yeah.”).
See Litvin Decl. Ex. 404, Mears Dep. (Aug. 30, 2017) at 175:13-21 (“Q: Do you know if Orchid
actually supplied any ceftaroline to Forest under the supply agreement? A. It did not... Well ... I
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don’t remember the outcome of the development batches versus the validation batches, but I
know that commercial supply wasn’t ultimately initiated.”); Litvin Decl. Ex. 400, FRX-
AT-04535254-255 (“no vials were manufactured and API continues to be stored at Orchid”).
Orchid also stated it did not provide Forest with any ceftaroline. See Litvin Decl. Ex. 303, Wilk
(Orchid) Dep. (Aug. 17, 2017) at 111:23-112:9 (“Q: Do you know if Orchid or Orgenus has ever
manufactured or sold ceftaroline to Forest? ... A: That didn’t happen, not for that product,
ceftaroline”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. DPPs’ response does not address the factual statement about
Orchid’s partial performance, instead equating performance with producing vials. The Term
Sheet required Orchid to perform in other ways, not just by “producing vials.” Among other
things, DPPs agree that Forest did not make the entire $840,000 payment contemplated by the
agreement to Orchid, and did not pay Orchid any of the additional consulting fees. Nor do DPPs
contest that Orchid attempted to manufacture product under the terms of the Development and
Supply Agreement, but failed to do so. As explained in Section I of Defendants’ Reply
Memorandum in Support of Their Motion for Summary Judgment, DPPs also have functionally
abandoned many of their claims, including their claim that the Ceftaroline Term Sheet was
anticompetitive, and DPPs’ response appears to be intended to support this abandoned claim.
DPPs’ response thus consists of improper argument and advances a claim that they have
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abandoned. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
D. The Orchid Settlement Agreement
173. On March 23, 2010, Forest and Orchid entered a Settlement and Licensing
Agreement resolving Forest Laboratories, Inc. et al. v. Orgenus Pharma, Inc. et al., Civil Action
No. 09-05105-MLD-DEA.
Defendants’ Evidence: Ex. 32, Orchid Settlement Agreement, § 6 (titled “Released
Claims”).
Response: Admitted.
174. Section 13 states that the “Exhibits A through C constitutes the complete, final
and exclusive agreement between the Parties with respect to the subject matter hereof and
supersedes and terminates any prior or contemporaneous agreements and/or understanding
between the Parties, whether oral or in writing, relating to such subject matter. There are no
covenants, promises, agreements, warranties, representations, conditions or understandings,
either oral or written, between the Parties other than as are set forth in this Agreement.”
Defendants’ Evidence: Ex. 32, Orchid Settlement Agreement, §13.
Undisputed Record Evidence: Ex. 334, Wilk (Orgenus) Dep. 204:3-205:25.
Response: Denied to the extent it implies the Orchid Settlement and Licensing
Agreement actually constituted the “complete, final and exclusive agreement between the Parties
with respect to the subject matter ... [and that there] are no covenants, promises, agreements,
warranties, representations, conditions or understandings ... between the Parties other than are set
forth in [the agreement].”
Internally Forest viewed the ceftaroline agreement and patent litigation settlement as
linked. See Litvin Decl. Ex. 424, FRX-AT-04625865-867 at 865 (David Solomon: “Any
discussion about moving ahead based on a signed term sheet ... or about them dropping their
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memantine challenge?” Rachel Mears: “Memantine – I need to raise it”); Litvin Decl. Ex. 422,
FRX-AT-04616241-247 at 241 (Rachel Mears to Charles Ryan and Eric Agovino – 7/15/09 -
“Orchid has responded and requested that we contact their outside counsel regarding the
memantine litigation.... Please let me know when our legal team has had the opportunity to talk
with them. I am holding on a number of activities until we have feedback from your initial
substantive meeting”); Litvin Decl. Ex. 423, FRX-AT-04616248-54 at 248 (David Solomon to
Charles Ryan and Eric Agovino – 7/15/09 - “I’d just like to emphasize the time sensitivity here
because we need to move forward with the ceftaroline supply agreements rapidly. Please keep
Rachel and me advised as you progress...”); Litvin Decl. Ex. 416, FRX-AT-04284416-427 at 416
(David Solomon to Rachel Mears – 7/15/09 – “Maybe you could send a note to CB saying you
heard there was a productive conversation – and you’re really hoping he’ll abandon this silly
lawsuit so we can get to business”).
Forest repeatedly told Orchid progress on the ceftaroline deal was contingent upon
settling the patent litigation. See Litvin Decl. Ex. 422, FRX-AT-04616241-247 at 242-243
(Rachel Mears to CB Rao – 7/11/09 – “As we discussed, one next step is to connect our
respective patent counsel to talk through options that might make sense with regard to
memantine”) and 241-242 (Rachel Mears to CB Rao – 7/13/09 – “In terms of next steps on the
business side, we are eager to continue our discussions on ceftaroline supply but would prefer to
do so after at least an initial discussion between our counsel”); Litvin Decl. Ex. 415, FRX-AT-
04284392-403 at 392 (Rachel Mears to David Solomon – 7/15/09 – “What do you think about
moving forward with Orchid based on this first call? I think we can give it two days to see if
there is follow up, but it sounds like they want costs and most favored nation, which is consistent
with C.B.’s discussion with me late last week”); Litvin Decl. Ex. 419, FRX-AT-04450738-739
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(David Solomon to CB Rao – 10/12/09 – “I understand that our patent counsel have been in
touch with your lawyers, who indicated they did not believe an agreement had been reached to
settle the Namenda litigation. As you know, we will be unable to move forward with Orchid
unless that litigation has been resolved on the terms we have discussed”); Litvin Decl. Ex. 420,
FRX-AT-04450776 (David Solomon to CB Rao – 10/22/09 - “You had indicated last week that
you would brief your lawyers and ask them to work together with our IP counsel to formalize the
settlement agreements related to the Namenda litigation ... Please understand that we cannot go
any further with this Term Sheet until those discussions take place”); Litvin Decl. Ex. 418, FRX-
AT-04407215-219 at 218 (David Solomon to CB Rao – 10/23/09 – “Please confirm we are now
agreed on all the terms of this Term Sheet (subject, on Forest’s part, to completion of the
settlement of the memantine litigation”); Litvin Decl. Ex. 421, FRX-AT-04451102 (David
Solomon to CB Rao – 12/1/09 – “Here is the Ceftaroline Supply Term Sheet ... which I hope is
now in final form. Based on this, I would expect that we can move forward with the resolution of
the Memantine litigation, as we have discussed.”).
Orchid understood the patent litigation settlement was directly tied to the ceftaroline deal.
See Litvin Decl. Ex. 411, FRX-AT-03597312-313 (CB Rao to David Solomon – 5/12/08 –
“Orchid is confident in its litigation positions in the Memantine case. However, we would be
interested in exploring potential business solutions that are mutually beneficial and
appropriate”); Litvin Decl. Ex. 422, FRX-AT-04616241-247 at 242 (CB Rao to Forest – 7/13/09
– “We on our part, will extend our support to any meaningful [litigation] settlement. With
reference to the Ceftaroline project, my view is that we should proceed on the Term Sheet
independently”); Litvin Decl. Ex. 410, Ex. 24, Solomon Dep., FRX-AT-04450793-798 at 796
(CB Rao to David Solomon: - 10/22/09 - “I am disappointed however that you are unwilling to
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increase the price for the validation batches from the offered USD 5.75 per vial... [and] I would
request you to consider bridging the gap as follows: (1) Increase the price of the validation
batches to USD 6 per vial [and] (2) Consider USD 1 million for the settlement of NJ case....”);
Litvin Decl. Ex. 417, FRX-AT-04407065-069 at 067 (CB Rao to David Solomon – 10/12/09 –
“[W]e should be reimbursed a sum that is equal to the development fee plus validation fee as a
compensation for the good faith efforts made by us in establishing Ceftaroline supplies and also
for settling the Memantine case in good faith...”); Litvin Decl. Ex. 412, FRX-AT-03597370-372
at 370 (CB Rao to David Solomon – 11/4/09 – “Forest have [sic] desired that Memantine should
be out of the way for Forest for the Ceftaroline Agreement to take place”); Litvin Decl. Ex. 414,
FRX-AT-03632381-384 at 381 (CB Rao to Rachel Mears – 1/22/10 – “The concern still remains
for us in terms of the other settlement agreement happening and the Ceftaroline agreement not
going forward due to any differences between Hospira and Forest.... That risk would have been
minimized only to the extent of Ceftaroline vials business had the consulting fee also been rolled
into the other settlement”); Litvin Decl. Ex. 408, Ex. 12, Wilk (Orchid) Dep, FRX-AT-0359744
(CB Rao to Rachel Mears – 3/8/10 – “Please find attached the draft press release. It avoids any
reference to the Ceftaroline Term Sheet”).
Forest consulted with its outside antitrust counsel about the ceftaroline agreement and
patent litigation settlement. See Litvin Decl. Ex. 413, FRX-AT-03597465-66.
Forest believed it necessary to submit both the ceftaroline agreement and patent litigation
settlement to the FTC. See Litvin Decl. Ex. 410, Solomon Dep., Ex. 24, FRX-AT-04450738-39
(“[W]hile we are confident that this agreement is an arms-length supply agreement ... our
antitrust counsel has advised us that it must be submitted to the FTC together with the Namenda
settlement documents”); Litvin Decl. Ex. 124, FRX-AT-03515722-773; Litvin Decl. Ex. 535,
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FRX-AT-04370486-491 at 489 (“The original ‘side deal’ was filed because it was signed
contemporaneously with the settlement and arguably was ‘a contingent condition of, or related
to,’ the patent infringement settlement”).
Forest and Orchid signed the patent litigation settlement and ceftaroline agreement on the
same day. See Litvin Decl. Ex. 409, Ex. 19, Wilk (Orchid) Dep., FRX-AT-00000380-416; Litvin
Decl. Ex. 405, Ex. 20, Wilk (Orchid) Dep., FRX-AT-00000417-427.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. At no point does DPPs’ argumentative, improper response
dispute or cite any evidence to dispute that ¶ 174 consists of a direct quotation from Section 13
of the Orchid Settlement Agreement. Moreover, as explained in Section I of Defendants’ Reply
Memorandum in Support of Their Motion for Summary Judgment, DPPs have expressly or
functionally abandoned many of their claims, including their claim that the patent litigation
settlements with non-Mylan generics were anticompetitive. DPPs’ response appears to be
intended to support this abandoned claim. DPPs’ response thus consists of improper argument
and advances a claim that they have abandoned.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
175. Section 1.14 of the Orchid Settlement Agreement permitted Orchid to launch
three calendar months prior to the expiration of the ‘703 patent, and any extensions or pediatric
exclusivity, provided that Orchid had obtained final approval from the FDA of its ANDA.
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Defendants’ Evidence: Ex. 32, Orchid Settlement Agreement, §1.14.
Undisputed Record Evidence: Ex. 334, Wilk (Orgenus) Dep. 207:25-209:20.
Response: Denied to the extent it implies that absent the agreement with Forest,
Orchid could not have launched its generic memantine products earlier than any agreed upon
“Launch Date” provided in Orchid’s settlement and License Agreement with Forest, for the
reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. Moreover, DPPs’ response does not actually contest
the statement. Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2).
176. In Section 2.5 of the Orchid Settlement Agreement Orchid represents that its
attorney fees and costs in the action had exceeded $2 million and Forest agreed to pay Orchid $2
million to “defray a portion of the paid attorney fees and costs that Orchid has already expended
in the action and to reflect a portion of the saved attorney fees and costs that Plaintiffs will not
have to expend in the Action.”
Defendants’ Evidence: Ex. 32, Orchid Settlement Agreement, § 2.5.
Undisputed Record Evidence: Ex. 334, Wilk (Orgenus) Dep. 198:19-201:15.
Response: Denied to the extent it implies Forest attempted to determine whether its
proposed payment under Section 2.5 of the License Agreement had any real correlation to
Orchid’s expended litigation costs. Denied to the extent Defendants intend to use this purported
fact to support an inference about its own avoided litigation costs which are the only litigation
costs that are relevant under Actavis. Defendants provide no evidence Forest made any attempt to
determine Orchid’s expended litigation costs prior to sending its first draft settlement agreement
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providing for $1M in litigation costs. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at
194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep. (Sept. 12, 2017) at 55:4-21; Litvin Decl. Ex.
384, KE00000270-301 at 289. Defendants provide no evidence Forest made any attempt to
determine Orchid’s expended litigation costs prior to countering Orchid’s proposal for $3M in
litigation costs with $2M. See Litvin Decl. Ex. 319, Ryan Dep. (Sept. 7, 2017) at 261:17-261:25
(“Q: Do you recall any discussions with Orchid about a $3 million payment to Orchid from
Forest? A: No. Q: Do you recall Orchid providing any documentation of the costs and fees it
incurred in connection with the litigation? A: I don’t recall specifically, no)”; Litvin Decl. Ex.
385, KE00000405-442 at 427; Litvin Decl. Ex. 386, KE00000909-910; Litvin Decl. Ex. 387,
KE00000945-980 at 966.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
177. Section 4.3(b) of the Orchid Settlement Agreement provides Orchid with the
option of amending the Orchid Settlement Agreement for the terms offered to a later-settling
generic, but Orchid did not exercise this option.
Defendants’ Evidence: Ex. 32, Orchid Settlement Agreement, § 4.3(b).
Undisputed Record Evidence: Ex. 334, Wilk (Orgenus) Dep. 115:9-23.
Response: Admitted.
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178. Different teams at Forest negotiated the Orchid Settlement Agreement and the
Ceftaroline Term Sheet.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 220:9-21 (noting that while Mr.
Solomon was involved in negotiating the Term Sheet, he was not involved in the “patent
negotiation”); Ex. 333, Mears Dep. 144:5-146:17 (explaining that Ms. Mears put C.B.
Rao of Orchid in touch with the patent team at Forest for discussions about the Namenda
litigation).
Response: Denied to the extent it implies Forest business personnel (David Solomon
and Rachel Mears) and legal personnel (Charles Ryan and Eric Agovino) were not informed
about both the ceftaroline agreement and patent litigation settlement. See Litvin Decl. Ex. 436,
FRX-AT-04615933-934 (Rachel Mears to David Solomon – 3/18/09 – “I spoke to Charles. You
and I should discuss whether it’s better to raise the topic now or wait until we are further along
with Orchid”); Litvin Decl. Ex. 422, FRX-AT-04616241-247 at 241 (Rachel Mears to Charles
Ryan and Eric Agovino – 7/15/09 - “Orchid has responded and requested that we contact their
outside counsel regarding the memantine litigation.... Please let me know when our legal team
has had the opportunity to talk with them. I am holding on a number of activities until we have
feedback from your initial substantive meeting”); Litvin Decl. Ex. 423, FRX-AT-04616248-54 at
248 (David Solomon to Charles Ryan and Eric Agovino – 7/15/09 - “I’d just like to emphasize
the time sensitivity here because we need to move forward with the ceftaroline supply
agreements rapidly. Please keep Rachel and me advised as you progress...”); Litvin Decl. Ex.
428, FRX-AT-04285925-926 at 925 (Charles Ryan to Rachel Mears – 10/23/09 - “Rachel, I am
in Europe at partner meetings until Wednesday of next week. I would suggest you speak with
Eric who is working with me on these agreements”); Litvin Decl. Ex. 415, FRX-AT-04284392-
403 at 392 (Rachel Mears to David Solomon – 7/15/09 – “What do you think about moving
forward with Orchid based on this first call? I think we can give it two days to see if there is
follow up, but it sounds like they want costs and most favored nation, which is consistent with
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C.B.’s discussion with me late last week”); Litvin Decl. Ex. 416, FRX-AT-04284416-427 at 416
(David Solomon to Rachel Mears – 7/15/09 – “Maybe you could send a note to CB saying you
heard there was a productive conversation – and you’re really hoping he’ll abandon this silly
lawsuit so we can get to business”); see also Litvin Decl. Ex. 435, FRX-AT-04615297-302;
Litvin Decl. Ex. 434, FRX-AT-04615293-296; Litvin Decl. Ex. 434, FRX-AT-04395367-368;
Litvin Decl. Ex. 429, FRX-AT-04305908; Litvin Decl. Ex. 427, FRX-AT-04284560-561; Litvin
Decl. Ex. 431, FRX-AT-04372497-501; Litvin Decl. Ex. 426, FRX-AT-04265980; Litvin Decl.
Ex. 432, FRX-AT-04372600-601.
Orchid’s outside counsel, Steven Chinowsky, was also involved in the ceftaroline
agreement and patent litigation settlement. See Litvin Decl. Ex. 411, FRX-AT-03597312-313
(CB Rao to David Solomon: “Accordingly, prior to my visit, it would be helpful if your attorney
could please contact our business attorney, Steven Chinowsky ... to initiate these discussions”);
Litvin Decl. Ex. 422, FRX-AT-04616241-247 at 241 (“Orchid has responded and requested that
we contact their outside counsel regarding the memantine litigation. The contact information is
listed below.... Our attorneys from L&W are ... and Steven Chinowsky ...”); Litvin Decl. Ex.
433, FRX-AT-04450931-934 at 931 (CB Rao to David Solomon: “I am providing the contact
details of our Attorney, Steve Chinwosky ... in case your attorneys, would like to discuss any of
the language points with him”); Litvin Decl. Ex. 430, FRX-AT-04321347-348 (Steven
Chinowsky to Charles Ryan: “Forest and CB Rao at Orchid have agreed to avoid any further
legal expenses until the ceftaroline deal can be finalized”); Litvin Decl. Ex. 196, FRX-AT-
04321799 (Steven Chinowsky to Charles Ryan: “I understand the parties are getting close on the
Ceftaroline discussions”).
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Forest’s Objection: DPPs do not dispute that different teams at Forest negotiated the
two agreements. Moreover, the fact referred to different teams at Forest negotiating the deals,
and thus evidence about whether other people at Forest were “informed” about the deals, or
whether other people at non-Forest entities were informed about or negotiated the deal, does not
dispute the fact. Instead, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
179. It is undisputed that the Ceftaroline Term Sheet was a fair value, arm’s length
business transaction.
Defendants’ Evidence: Ex. 54, Fowdur Report ¶ 58 (“Ancillary agreements, including
those signed contemporaneously with patent settlements, are not inherently suspicious,
nor should they be presumed to cause anticompetitive delay. For instance, Forest also
entered into a separate and contemporaneous agreement for an unrelated product when it
settled the Hatch-Waxman litigation with Orchid. Plaintiffs’ experts have not opined that
this agreement (or any other agreement with other generic manufacturers) were part of a
reverse-payment settlement.”); Ex. 69, Green Report ¶ 34 (“Forest was looking for a
second qualified supplier for ceftaroline. If Orchid was able to perform under the
agreement, Forest would have access to ceftaroline at a reduced cost compared to
Forest’s then supplier, Dobfar. Orchid stood to also benefit from the agreement as it
would become a supplier of ceftaroline with minimum purchase quantities to be ordered
by Forest. Thus, from a financial perspective, the consideration Forest agreed to pay
Orchid in the Orchid Agreement constitutes fair value for the benefits and services
received by Forest under the agreement.”).
Plaintiffs’ Admissions: No Plaintiff expert alleges the Ceftaroline Term Sheet was not
for value. Ex. 335, Elhauge (Sept. 29) Dep. 37:15-39:15 (agreeing that the Ceftaroline
Term Sheet is not addressed in the Elhauge Report, he did not analyze the agreement, and
was not prepared to testify about it at his deposition); Ex. 368, Elhauge (Nov. 10) Dep.
309:15-310:25l; Ex. 363, Lamb (Oct. 6) Dep. 231:20-21 (“[T]he reverse payment
between Forest and Mylan, as I understand, is the only reverse payment[sic] challenged
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to be anticompetitive by the Plaintiffs.”); see generally Ex. 55, Berndt Reply ¶ 1; Ex. 56,
Lamb Reply ¶¶ 2-3.
Response: Denied. Whether the Ceftaroline Term Sheet was a “fair value, arm’s
length business transaction” calls for a legal determination. Forest considered the Ceftaroline
Term Sheet linked to the patent litigation settlement, Forest told Orchid they were linked, and
Orchid understood the two were linked. See Response to ¶ 174.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. In addition, as explained in Forest’s Reply Mem. in Support of
its Mot. for Summ. J. (“RSJM”) (Jan. 5, 2018) at Section 1, DPPs have expressly or functionally
abandoned many of their claims, including their claim that the patent litigation settlements with
non-Mylan generics were anticompetitive. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
E. The Lexapro Agreement with Alphapharm
180. On May 29, 2002, H. Lundbeck A/S (“Lundbeck”) and Forest entered the
S-enantiomer License Agreement, whereby Lundbeck granted Forest a license to market
Lexapro.
Defendants’ Evidence: Ex. 70, FRX-AT-04628179 at 180.
Response: Admitted in part, denied in part. Plaintiffs admit only that the cited
support, an August 19, 2009 Cost Sharing Agreement between H. Lundbeck A/S and Forest,
references an earlier May 29, 2002 License Agreement. Denied to the extent Defendants claim
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the cited support is the License Agreement.
Forest’s Objection: Forest has not contended that O’Shaughnessy Decl. I Ex. 70 is the
May 29, 2002 License Agreement. Rather, Forest contends that the cited exhibit explains that
“Lundbeck and Forest Holdings are parties to that certain S-enantiomer License Agreement . . .
dated May 29, 2002, pursuant to which, among other things, Lundbeck granted to Forest
Holdings certain licenses under patents and know-how described therein with respect to the
pharmaceutical product Lexapro.” O’Shaugnessy Decl. I. Ex. 70, FRX-AT-04628179 at 180.
This supports the proposition Forest has set forth in ¶ 180. DPPs response does not provide any
evidentiary basis to contest the statement, and so, the fact should be deemed admitted. Fed. R.
Civ. P. 56(e)(2).
181. Forest submitted NDA 021-323 under section 505(b) of the Federal Food, Drug,
and Cosmetic Act for Lexapro, and the FDA approved Forest’s NDA on August 14, 2002.
Public Document: FDA, Application Number 21-323 Administrative Document
Correspondence, https://www.accessdata.fda.gov/drugsatfda_docs/nda/2002/21-
323.pdf_ Lexapro _Approv.pdf
Response: Admitted.
182. On October 3, 2005, Forest Laboratories Holdings Limited and Alphapharm Pty,
Ltd. (“Alphapharm”) entered into a Distribution and Supply Agreement for Authorized Generic
Lexapro.
Defendants’ Evidence: Ex. 71, FRX-AT-00000253, at -0273 (“Original Lexapro
Agreement”).
Plaintiffs’ Admissions: DPPs’ Memo. in Opp’n to Mot. to Dismiss, Dkt. No. 69, at 24.
Response: Admitted.
183. An authorized generic drug is manufactured and marketed under the same NDA
as a brand drug, but is typically sold at a lower price than its brand counterpart.
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Defendants’ Evidence: Ex. 72, Expert Report of Alexandra Mooney Bonelli, CFE
(“Bonelli Rep.”)¶ 18 (“An AG is a drug that is manufactured and marketed under the
same new drug application (“NDA”) as the original innovator drug; however, the AG
drug is typically discounted (sold into the commercial market at a lower price) as
compared to the innovator brand version.”).
Public Sources: DRA Final Rule, 72 Fed. Reg. 39,243, § 447.506(a) (“[A]n authorized
generic drug means any drug sold, licensed, or marketed under an NDA approved by the
FDA under section 505(c) of the FFDCA; and marketed, sold, or distributed under a
different labeler code, product code, trade name, trademark, or packaging (other than
repackaging the listed drug for use in institutions) than the brand drug.”)
Response: Admitted.
184. Pursuant to the Original Lexapro Agreement, Forest authorized Alphapharm to
exclusively market an authorized generic version of the oral tablet pharmaceutical drug Lexapro
(“Generic Lexapro”), pursuant to NDA No. 21-323.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, §§ 1.11, 1.18, 1.19, 2.1,
3.1.
Plaintiffs’ Admissions: DPPs’ Memo. in Opp’n to Mot. to Dismiss, Dkt. No. 69, at 24;
DPPs’ Memo. of Law in Supp. of Mot. to Compel Prod. from Mylan, Dkt. No. 212, at 1.
Response: Denied. The license was not exclusive as to Alphapharm. Pursuant to
section 3.2 of the Original Lexapro Agreement, “Forest reserve[d] the right to authorize and
license Ivax Pharmaceuticals, Inc. (“Ivax”) to sell and distribute Generic Product in the Territory
in settlement of any pending litigation between Forest and Ivax. Forest also reserve[d] the right
to authorize and license in settlement of any then pending litigation any person or entity which
files an ANDA with the FDA in respect of the NDA Product (an “ANDA Filer”) to sell and
distribute Generic Product in the Territory, provided in the event of such authorization or license,
any such license to another ANDA filer to sell the Generic Product shall not take effect until at
least 180 days after the Launch Date afforded Alphapharm.” Further, pursuant to section 3.3 of
the Original Lexapro Agreement, “Forest shall also have the right to authorize and license in
settlement of any then pending litigation any ANDA Filer to sell and distribute the product
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approved under such ANDA in the Territory; provided however, that any such license (other
than with respect to Ivax) shall not take effect before fourteen (14) days after the Launch Date
afforded Alphapharm.” Also denied as to any suggestion that the license was indefinite. Rather,
the license had a termination date, after which “Alphapharm shall no longer have the right to
Market Generic Product.” O’Shaughnessy Decl. Ex. 71 at § 15.4.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. DPPs offer facts regarding Forest’s reservation of rights in § 3.2 of the
Original Lexapro Agreement, however do not and cannot dispute that pursuant to the Original
Lexapro Agreement, Forest authorized Alphapharm to market an authorized generic version of
the oral tablet pharmaceutical drug Lexapro pursuant to NDA No. 21-323. O’Shaughnessy Decl.
I. Ex. 71, Original Lexapro Agreement, § 2.1. DPPs’ also do not and cannot dispute that subject
to the reservations of rights listed in § 3.2, the authorization to market Generic Lexapro was on
an exclusive basis. Id. at § 3.2. The exceptions in § 3.2 apply to Ivax (Teva) who was the first
filer, and thus entered via its own ANDA, not as an authorized generic under Forest’s NDA. Id.
The other exception in § 3.2 explicitly applies to a “person or entity that files an ANDA.” Id.
Similarly, § 3.3 applies to Forest’s right to license an entity to sell and distribute product under
an ANDA. Id. at § 3.3. Moreover, DPPs present no facts to show that Forest granted any other
party a license to market an authorized generic Lexapro product. DPPs’ response otherwise
consists of improper argument and a recitation of different purported facts, but no evidentiary
basis to contest the statement. Accordingly, the fact should be deemed admitted. SESAC, 1 F.
Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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At a minimum, DPPs do not dispute that “Pursuant to the Original Lexapro Agreement,
Forest authorized Alphapharm to market an authorized generic version of the oral tablet
pharmaceutical drug Lexapro (“Generic Lexapro”), pursuant to NDA No. 21-323.” Accordingly,
at the very least that fact should be deemed admitted.
185. The Original Lexapro Agreement also licensed and sublicensed the ‘712 and ‘941
Patents, and other intellectual property owned or controlled by Forest, “to Alphapharm to the
extent any such Intellectual Property would otherwise be infringed” by the marketing of Generic
Lexapro.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, §§ 1.14, 2.1.
Response: Admitted.
186. The authorization and licensing provisions of the Original Lexapro Agreement
“shall not extend to the manufacture of Generic [Lexapro],” thus Alphapharm was not permitted
to manufacture Generic Lexapro under this agreement.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 2.2.
Response: Admitted in part, denied in part. Admitted to the extent that paragraph 186
refers to an authorized generic version of Lexapro. Denied as to any suggestion that Alphapharm
could not, under certain circumstances, otherwise manufacture its own version of generic
Lexapro if approved pursuant to Alphapharm’s own ANDA. See, e.g., O’Shaughnessy Decl. Ex.
71 at § 4.4; O’Shaughnessy Decl. Ex. 122 at n.14 (Elhauge Rebuttal Report).
Forest’s Objection: “Generic Lexapro” was defined in ¶ 184 to be the authorized
generic version of the oral tablet pharmaceutical drug Lexapro (“Generic Lexapro”). Thus,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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187. Forest agreed to supply Alphapharm’s requirements of Generic Lexapro for sale
and distribution.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 5.1.
Response: Admitted in part, denied in part. Forest agreed to supply Alphapharm’s
requirements, but the Original Lexapro Amendment did not set a minimum purchase quantity
that Alphapharm was required to buy.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Moreover, pursuant
to § 9.1 of the Original Lexapro Agreement, Alphapharm was required to “maximize sales” of
Generic Lexapro. O’Shaughnessy Decl. I Ex. 71, Original Lexapro Agreement, § 9.1.
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
188. Under the agreement, Alphapharm was permitted to enter “two weeks prior to the
expiration of the ‘712 Patent, including all pediatric exclusivity based on such patent and any
additional exclusivity allowed with respect to such patent.”
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 1.15(b), FRX-AT-
00000253 at 255 (§ 1.15(b)).
Response: Admitted in part, denied in part. Admitted that Alphapharm was permitted
to launch authorized generic Lexapro two weeks prior to the expiration of the ‘712 patent.
Denied to the extent paragraph 188 suggests that Alphapharm could not enter earlier than that
under certain circumstances. See, e.g., O’Shaughnessy Decl. Ex. 71 at §§ 1.15(a), 4.1; 4.2.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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189. Alphapharm agreed to pay Forest a 40% share of its product profit.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 6.1(ii).
Response: Admitted.
190. The agreement defined “product profit” as Alphapharm’s net sales less Forest’s
manufacturing costs.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 1.23.
Response: Admitted to the extent “product profit” is defined per §1.23.
191. The Original Lexapro Agreement required Alphapharm to, at its sole cost and
expense, “maximize sales” of the Generic Lexapro.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 9.1.
Response: Denied. Under the Original Lexapro Agreement, Alphapharm had
discretion to buy from Forest whatever amount it chose to buy. See Response to ¶ 187. The
Original Lexapro Agreement required Alphapharm to “maximize sales” only “of Generic
Product [authorized Generic Lexapro] supplied pursuant to this Agreement.” That is, the Original
Lexapro Agreement required Alphapharm to maximize sales of the product it actually purchased
under its discretion to purchase only the amount it required. See O’Shaughnessy Decl. Ex. 122 at
n.14 (Elhauge Rebuttal Report); Ex. 71 at §§ 5.1, 9.1 (Original Lexapro Agreement).
Forests’ Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. DPPs’ reference to the ordering provisions of the Original
Lexapro Agreement does not call into question the clear meaning of the obligation to maximize
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sales. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
192. On September 5, 2007, the United States Court of Appeals for the Federal Circuit
upheld the validity of the ‘712 Patent.
Public Sources: Forest Labs., Inc. v. Ivax Pharms., Inc., 501 F.3d 1263 (Fed. Cir. 2007);
https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2009/076765s000TAltr.pdf.
Response: ¶ 192 is improperly stated as a legal conclusion. To the extent a response
is required, this statement is admitted in part, denied in part. The United States Court of Appeals
for the Federal Circuit affirmed the district court’s ruling on the record that was presented.
Further, ¶ 192 is not material for purposes of summary judgment because this purported fact is
not cited anywhere in Defendants’ Memorandum In Support of their Motion for Summary
Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2)
193. The ‘712 Patent was set to expire on March 12, 2012, which allowed Alphapharm
to launch its authorized generic on February 29, 2012.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 1.15(b).
Public Documents: Mylan, Mylan Launches First Equivalent Product to Lexapro®
Tablets, http://investor.mylan.com/releasedetail.cfm?ReleaseID=652623.
194. Teva, the sole first-filing ANDA applicant, was permitted to enter on March 12,
Response: ¶ 193 is improperly stated as a legal conclusion. To the extent that a
response is required, this statement is admitted in part, denied in part. Plaintiffs disagree that a
March 12, 2012 patent expiration date “allowed Alphapharm to launch its authorized generic on
February 29, 2012.” Moreover, in section 2.1 of the Distribution and Supply Agreement for
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Generic Lexapro between Forest and Alphapharm, Forest authorized Alphapharm to market
generic product after the “Launch Date,” which was February 27, 2012 (i.e., “the date which is
two weeks prior to the expiration of the ‘712 Patent”) per section 1.15(b) of the agreement.
O’Shaughnessy Decl. Ex. 71 at FRX-AT-00000257, 255.
Forest’s Objection: DPPs do not dispute that the ‘712 Patent was set to expire on March
12, 2012, which allowed Alphapharm to launch its authorized generic on February 27, 2012 as
opposed to February 29, 2012, although this distinction is immaterial. Accordingly, that fact
should be deemed admitted.
194. Teva, the sole first-filing ANDA applicant, was permitted to enter on March 12,
2012 and was entitled to 180 days of exclusivity under the Hatch-Waxman Act.
Public Documents: FDA, Letter from Gary J. Buehler to Patricia Jaworski re: ANDA
for Escitalopram Oxalate,
https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2009/ 076765s000TAltr.pdf;
Teva, Teva Announces Launch of Generic Lexapro® in the United States; Awarded 180-
Day Period of Marketing Exclusivity,
http://www.tevapharm.com/news/teva_announces_launch_of_generic_lexapro_in_the_u
n ited_states_awarded_180_day period_of_marketing_exclusivity_03_12.aspx.
Response: Admitted in part, denied in part. Plaintiffs deny that the Letter Defendants
cite provides evidence for the proposition asserted. See Koch v. Town of Brattleboro, 287 F.3d
162, 165 (2d Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those
portions of the ‘pleadings, depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any, which it believes demonstrate the absence of a genuine issue of
material fact.”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Plaintiffs otherwise
admit that Teva could launch their version of generic Lexapro submitted under their ANDA on
March 12, 2012, and that Teva was entitled to 180 days of exclusivity in that the FDA would not
finally approve another ANDA during that time.
Forest’s Objection: In the cited letter to IVAX, “an indirect, wholly owned subsidiary
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of Teva Pharmaceuticals USA,” the FDA indicates that the ‘712 Patent was listed in the Orange
Book with an expiration date of March 12, 2012. It also indicates that the FDA considered the
district court’s judgment and the affirmation by the Federal Circuit “that the effective date of
approval for the IVAX ANDA be delayed until the expiration of the ‘712 patent (including all
term extensions),” and proceeded to convert IVAX’s ANDA approval to a tentative approval.
This supports the proposition that Teva was not permitted to begin marketing its generic Lexapro
product until March 12, 2012. Furthermore, although DPPs incorrectly take issue with the
evidence cited in support of this statement of fact, they admit the fact itself. Accordingly, the
fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
195. The Original Lexapro Agreement had a five-year term after the launch of Generic
Lexapro with automatic annual renewal.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 15.1.
Response: Admitted.
196. Although the full term of the agreement was five years from the launch of Generic
Lexapro, Alphapharm was given the right to terminate the Original Lexapro Agreement, upon
120 days prior written notice to Forest, one year following the launch of the Lexapro authorized
generic.
Defendants’ Evidence: Ex. 71, Original Lexapro Agreement, § 15.1.
Response: Admitted.
F. The Deficit Reduction Act of 2005 and the Issue of “Best Price” Liability
197. In 1990, Congress established the Medicaid Drug Rebate Program (“MDRP”) to
establish a program that required brand manufacturers to pay a rebate to the government on
prescription drugs reimbursed by Medicaid.
Public Source: Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, 104
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Stat. 1388 (1990);
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 8.
Response: Admitted.
198. The MDRP requires participating drug manufacturers to pay a rebate on those
drugs for which a state’s Medicaid agency has paid pharmacies to dispense the drug to Medicaid
beneficiaries.
Public Source: 42 U.S.C. § 1396r-8(b)(1)(A); Medicaid Drug Rebate Program,-
https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-
program/indEx.html (“Manufacturers are then responsible for paying a rebate on those
drugs for which payment was made under the state plan.”);
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶¶ 8, 9; Ex. 336, Bonelli Dep. 43:25-44:12
(“Q. Who purchases the drugs in the state Medicaid plans? ... A. Pharmacies.”).
Response: Admitted.
199. To determine the rebate amount owed by a manufacturer, the Centers for
Medicare & Medicaid Services (“CMS”) calculates a per-unit rebate amount (“URA”) based on
a statutory formula.
Public Source: Medicaid Drug Rebate Program, https://www.medicaid.gov/medicaid/
prescription-drugs/medicaid-drug-rebate-program/indEx.html (“The Centers for
Medicare & Medicaid Services’ Medicaid Drug Rebate (MDR) system performs the
URA calculation using the drug manufacturer’s pricing. The specific methodology used
is determined by law ....”);
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 10.
Response: Admitted.
200. The URA for a drug is tied to a product’s “Best Price” or, “the lowest price
available from the manufacturer during the rebate period to any wholesaler, retailer, provider,
health maintenance organization, nonprofit entity, or governmental entity within the United
States ....”
Public Source: 42 U.S.C. § 1396r-8(c)(1)(C)(i) (2012);
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Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶¶ 15-17.
Response: Admitted.
201. The URA is calculated, in part, using a brand manufacturer’s commercial sales
and discount data.
Public Sources: 42 U.S.C. § 1396r-8(b)(3); 42 C.F.R. § 447.510(a) & (d); Sample
Medicaid Rebate Agreement § II(e), https://www.medicaid.gov/medicaid-chip-
program-information/by-topics/prescription-
drugs/downloads/samplerebateagreement.pdf;
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶¶ 15-17.
Response: Admitted.
202. The Deficit Reduction Act of 2005 (“DRA”), in large part, became effective on
January 1, 2007.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 22.
Public Source: Deficit Reduction Act of 2005, Pub. L. No. 109-171, §§ 6001-04
(amending 42 U.S.C. § 1927).
Response: Admitted. Plaintiffs further admit that the express intention of Congress in
passing, and CMS in implementing, the DRA, was to require brand companies to pay rebates on
their authorized generic drugs. See Federal Trade Commission, Authorized Generic Drugs:
Short-Term Effects and Long Term-Impact, August 2011, at J-1, available
at https://www.ftc.gov/sites/default/files/documents/reports/authorized-generic-drugs-short-
term-effects-and-long-term-impact-report-federal-trade-commission/authorized-generic-drugs-
short-term-effects-and-long-term-impact-report-federal-trade-commission.pdf (last accessed
Dec. 4, 2017); AMP and Best Price Reporting Requirements, 72 FR 39142, 39199-39202 (July
17, 2007); DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005-
CONTINUED, 151 Cong Rec S 12099, 12122; The President’s Budget Proposals for Fiscal Year
2006: Hearing before the Committee on Finance, 109th Cong. 37-39 (statement of Mike Leavitt,
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Secretary of Health and Human Services).
Forest’s Objection: DPPs’ response consists of improper argument and a recitation of
different purported facts that provide no evidentiary basis to contest the statement. Forest does
not set forth any fact related to Congress’ or CMS’ intention in passing and implementing the
DRA, and thus, DPPs’ “further admission” is improper. Furthermore, to the extent DPPs allege
that Forest violated any laws, DPPs have cited no evidence to support that claim, and DPPs
expert expressly stated he was not opining on this issue. O’Shaughnessy Decl. II Ex. 386,
Elhauge (Nov. 10) Dep. 373:5-10. Accordingly, the fact should be deemed admitted without
qualification. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
203. The Final Rule implementing the DRA (the “DRA Final Rule”) became effective
October 1, 2007.
Public Source: HHS & CMS, DRA Final Rule, 72 Fed. Reg. 39,142 (2007);
Defendants’ Evidence: Ex. 336, Bonelli Dep. 70:19-71:3; Ex. 72, Bonelli Rep., ¶ 23.
Response: Admitted. Plaintiffs further admit that the express intention of Congress in
passing, and CMS in implementing, the DRA, was to require brand companies to pay rebates on
their authorized generic drugs. See Federal Trade Commission, Authorized Generic Drugs:
Short-Term Effects and Long Term-Impact, August 2011, at J-1, available
at https://www.ftc.gov/sites/default/files/documents/reports/authorized-generic-drugs-short-term-
effects-and-long-term-impact-report-federal-trade-commission/authorized-generic-drugs-short-
term-effects-and-long-term-impact-report-federal-trade-commission.pdf (last accessed Dec. 4,
2017); AMP and Best Price Reporting Requirements, 72 FR 39142, 39199-39202 (July 17,
2007); DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005-CONTINUED,
151 Cong Rec S 12099, 12122; The President’s Budget Proposals for Fiscal Year 2006: Hearing
before the Committee on Finance, 109th Cong. 37-39 (statement of Mike Leavitt, Secretary of
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Health and Human Services).
Forest’s Objection: DPPs’ response consists of improper argument and a recitation of
different purported facts that provide no evidentiary basis to contest the statement. Forest does
not set forth any fact related to Congress’ or CMS’ intention in passing and implementing the
DRA, and thus, DPPs’ “further admission” is improper. Furthermore, to the extent DPPs allege
that Forest violated any laws, DPPs have cited no evidence to support that claim, and DPPs
expert expressly stated he was not opining on this issue. O’Shaughnessy Decl. II Ex. 386,
Elhauge (Nov. 10) Dep. 373:5-10. Accordingly, the fact should be deemed admitted without
qualification. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
204. Prior to the DRA, the MDRP did not specifically address the inclusion of
authorized generic products in the innovator’s best price calculation.
Public Source: Medicaid Drug Pricing Regulation: A Summary, https://www.
cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2007-Fact-sheets-items/2007-07-
06.html (“Prior to the DRA, there were no statutory requirements specifically addressing
authorized generics under the Medicaid Drug Rebate Program.”);
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 21; Ex. 73, FRX-AT-04617599, at 602
(“[The Original Lexapro Agreement] will create a new Best Price discount for branded
Lexapro because the Deficit Reduction Act requires that manufacturers include sales of
an authorized generic in its Best Price calculations.”).
Response: Admitted. Plaintiffs further admit that brand companies’ failure to pay
rebates on their authorized generics was repeatedly termed a “loophole” and that the express
intention of Congress in passing, and CMS in implementing, the DRA, was to close the
“loophole” by requiring brand companies to pay rebates on their authorized generic drugs. See
Federal Trade Commission, Authorized Generic Drugs: Short-Term Effects and Long Term-
Impact, August 2011, at J-1, available
at https://www.ftc.gov/sites/default/files/documents/reports/authorized-generic-drugs-short-term-
effects-and-long-term-impact-report-federal-trade-commission/authorized-generic-drugs-short-
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term-effects-and-long-term-impact-report-federal-trade-commission.pdf (last accessed Dec. 4,
2017); AMP and Best Price Reporting Requirements, 72 FR 39142, 39199-39202 (July 17,
2007); DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005-CONTINUED,
151 Cong Rec S 12099, 12122; The President’s Budget Proposals for Fiscal Year 2006: Hearing
before the Committee on Finance, 109th Cong. 37-39 (statement of Mike Leavitt, Secretary of
Health and Human Services).
Forest’s Objection: DPPs’ response consists of improper argument and a recitation of
different purported facts that provide no evidentiary basis to contest the statement. Forest does
not set forth any fact related to Congress’ or CMS’ intention in passing and implementing the
DRA, and thus, DPPs’ “further admission” is improper. Furthermore, to the extent DPPs allege
that Forest violated any laws, DPPs have cited no evidence to support that claim, and DPPs
expert expressly stated he was not opining on this issue. O’Shaughnessy Decl. II Ex. 386,
Elhauge (Nov. 10) Dep. 373:5-10. Accordingly, the fact should be deemed admitted without
qualification. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
205. Prior to the DRA being effective, brand manufacturers commonly treated
authorized generics as distinct from their brand counterparts for price reporting purposes and
Best Price calculations.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 21; Ex. 74, FRX-AT-04447018
(explaining that the requirement that “internal US transfer prices need to be included in
the best price (BP) calculation to Medicaid” affected two of Forest’s products); Ex. 75,
FRX-AT-04447019 (PowerPoint presentation explaining the impact of the DRA on
Authorized Generics).
Response: Admitted. Plaintiffs further admit that this treatment of authorized
generics as distinct from their brand counterparts for price reporting purposes resulted in a loss to
the government of billions of dollars. See DEFICIT REDUCTION OMNIBUS
RECONCILIATION ACT OF 2005-CONTINUED, 151 Cong Rec S 12099, 12122; The
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President’s Budget Proposals for Fiscal Year 2006: Hearing before the Committee on Finance,
109th Cong. 37-39 (statement of Mike Leavitt, Secretary of Health and Human Services). Brand
companies’ failure to pay rebates on their authorized generics was repeatedly termed a
“loophole” and that the express intention of Congress in passing, and CMS in implementing, the
DRA, was to close the “loophole” by requiring brand companies to pay rebates on their
authorized generic drugs. See Federal Trade Commission, Authorized Generic Drugs: Short-
Term Effects and Long Term-Impact, August 2011, at J-1, available at
https://www.ftc.gov/sites/default/files/documents/reports/authorized-generic-drugs-short-term-
effects-and-long-term-impact-report-federal-trade-commission/authorized-generic-drugs-short-
term-effects-and-long-term-impact-report-federal-trade-commission.pdf (last accessed Dec. 4,
2017); AMP and Best Price Reporting Requirements, 72 FR 39142, 39199-39202 (July 17,
2007); DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005-CONTINUED,
151 Cong Rec S 12099, 12122; The President’s Budget Proposals for Fiscal Year 2006: Hearing
before the Committee on Finance, 109th Cong. 37-39 (statement of Mike Leavitt, Secretary of
Health and Human Services).
Forest’s Objection: DPPs’ response consists of improper argument and a recitation of
different purported facts that provide no evidentiary basis to contest the statement. Forest does
not set forth any fact related to the amount of money the government earned or Congress’ or
CMS’ intention in passing and implementing the DRA, and thus, DPPs’ “further admissions” are
improper. Furthermore, to the extent DPPs allege that Forest violated any laws, DPPs have cited
no evidence to support that claim, and DPPs expert expressly stated he was not opining on this
issue. O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov. 10) Dep. 373:5-10. Accordingly, the fact
should be deemed admitted without qualification. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
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P. 56(e)(2).
206. The DRA amended the definition of Best Price to include the lowest price of an
authorized generic drug, stating that “in the case of a manufacturer that approves, allows, or
otherwise permits any other drug of the manufacturer to be sold under a new drug application
approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355 (c)],
[Best Price] shall be inclusive of the lowest price for such authorized drug available from the
manufacturer during the rebate period to any manufacturer, wholesaler, retailer, provider, health
maintenance organization, nonprofit entity, or governmental entity within the United States ....”
Public Sources: Deficit Reduction Act of 2005 § 6003 (amending 42 U.S.C. §
1927(c)(1)(C)(ii));
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶¶ 21-24, 22 n.18; Ex. 73, FRX-AT-
04617599, at 602; Ex. 74, FRX-AT-04447018.
Response: Admitted. Plaintiffs further admit that CMS initially proposed to require
the best price to be the price charged by the licensee of the authorized generic, for example,
Mylan, in this case. See AMP and Best Price Reporting Requirements, 72 FR 39142, 39199-
39202 (July 17, 2007).
Forest’s Objection: DPPs’ response consists of improper argument and a recitation of
different purported facts that provide no evidentiary basis to contest the statement. Forest does
not set forth any fact related to any CMS proposal, and thus, DPPs’ “further admission” is
improper. Accordingly, the fact should be deemed admitted without qualification. SESAC, 1 F.
Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
207. On January 23, 2008, in response to inquiries from manufacturers, CMS clarified
that the DRA Final Rule “provides that the primary manufacturer include the best price of an
authorized generic drug in its calculation of best price when the drug is being sold by the primary
manufacturer to the secondary manufacturer. In accordance with this provision, we expect that
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the primary manufacturer report a BP which incorporates the transfer price at the time of sale to
the secondary manufacturer for the quarter in which the sale occurs, regardless of when the
product is launched.”
Public Source: DRA Policy Inquiries, https://www.cms.gov/Regulations-
and-Guidance/Legislation/DeficitReductionAct/downloads/DRAPolicyInquiries.pdf;
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶¶ 25-26.
Response: Admitted in part, denied in part. Plaintiffs admit that ¶ 207 accurately
quotes language from a document entitled “DRA Policy Inquiries.” Plaintiffs deny any
suggestion that the document entitled “DRA Policy Inquiries” endorses any view that licensors
of authorized generics can evade their rebate obligations by having the licensee manufacture and
sell the authorized generic, instead of simply selling it, which is the “typical” arrangement.
O’Shaughnessy Decl. Ex. 72 at ¶ 30 (Bonelli Report). The document is silent as to such a
scenario. See DRA Policy Inquiries, https://www.cms.gov/Regulations-and-
Guidance/Legislation/Deficit ReductionAct/downloads/DRAPolicyInquiries.pdf. See also Litvin
Decl. Ex. 257, Bonelli Dep. (Oct. 25, 2017) at 92:8-17 (“Q. Does it say anywhere in this
document that it is reasonable for a brand company to avoid best price by engaging with the
secondary manufacturer to have the secondary manufacturer produce rather than just sell the
AG? A. This document does not provide any opinion or context and certainly not in the way you
characterize it on avoiding best price from these FAQs.”)
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. Additionally, to the extent DPPs allege that Forest violated any
laws, DPPs have cited no evidence to support that claim, and DPPs expert expressly stated he
was not opining on this issue. O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov. 10) Dep. 373:5-
10. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
208. Under the Original Lexapro Agreement, Forest would be considered a primary
manufacturer, and Alphapharm would be considered a secondary manufacturer.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 30; Ex. 71, FRX-AT-00000253; Ex. 73,
FRX-AT-04617599, at 601-03.
Response: Admitted in part, denied in part to the extent it requires a legal conclusion.
By way of further answer, Plaintiffs admit that under the Original Lexapro Agreement, Forest
could be considered a primary manufacturer, and Alphapharm could be considered a secondary
manufacturer, but deny that O’Shaughnessy Decl. Exs. 71 or 73 support this proposition.
Plaintiffs further deny, in light of Congressional intent and public statements by CMS (see
Responses to ¶¶ 202-207), any suggestion that under the Lexapro Amendment, Forest would not
be considered a primary manufacturer, and/or that Mylan would not be considered a secondary
manufacturer.
Forests’ Objection: Although DPPs incorrectly take issue with the evidence cited in
support of this statement of fact, they admit the fact itself. DPPs’ contend that O’Shaughnessy
Decl. I Exs. 71 and 73 do not support the proposition set forth in ¶ 208. However, in ¶ 30 of
O’Shaughnessy Decl. I Ex. 72, Defendants’ expert, Alexandra Bonelli analyzes O’Shaughnessy
Decl. I Ex. 71 (the Original Lexapro Agreement) and relates its “structure to CMS’s
terminology.” She concludes that since the Original Lexapro Agreement required Forest to
manufacture Generic Lexapro and supply it to Alphapharm for distribution, CMS would consider
Forest a primary manufacturer and Alphapharm a secondary manufacturer. Forest cited
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O’Shaughnessy Decl. I Ex. 71 as evidence that the agreement structure Ms. Bonelli describes is
accurate. Moreover, O’Shaughnessy Decl. I Ex. 73 discusses Forest’s analysis of how the DRA
will apply to the structure of the Original Lexapro Agreement and the additional liability Forest
would have incurred as the manufacturer of Generic Lexapro. O’Shaughnessy Decl. I Exs. 71
and 73 both illustrate that Forest and Alphapharm/Mylan qualify as primary and secondary
manufacturers, respectively, under the Original Lexapro Agreement and provide further support
for Ms. Bonelli’s analysis. To the extent that DPPs’ response seeks to evoke the Lexapro
Amendment, Ms. Bonelli’s unrebutted opinion is that “[u]nder the structure of the Lexapro
Amendment, Mylan would manufacture AG Lexapro, and Forest would not sell any AG Lexapro
to Mylan.” O’Shaughnessy Decl. Ex. 72 ¶ 33. Because Forest was no longer making sales to
Mylan, Ms. Bonelli’s unrebutted testimony is that Forest had no obligation to include Mylan’s
price in its best price calculations under the DRA final rule. Id. ¶ 25. Ms. Bonelli’s conclusions
were not contested by any DPP expert, and in fact were conceded and adopted by Prof. Elhauge.
O’Shaughnessy Decl. I Ex. 122, Elhauge Rep. II., ¶ 22.
Thus, DPPs’ response consists of nothing more than improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). It is merely an attempt to “contextualize or dispute the
relevance of the statement,” but not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Furthermore, to the extent DPPs allege that Forest violated any laws, DPPs have cited no
evidence to support that claim, and DPPs expert expressly stated he was not opining on this
issue. O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov. 10) Dep. 373:5-10. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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209. The transfer price offered by a primary manufacturer to a secondary manufacturer
is generally reflective of the cost to manufacture a drug.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 28; Ex. 76, FRX-AT-04617480
(indicating that Mylan wanted to know Forest’s manufacturing cost for Lexapro because
that “is their purchase price”).
Response: Admitted in part, denied in part to the extent it requires a legal conclusion.
By way of further answer, Plaintiffs admit that a transfer price is intended to reflect, as a
component, the price of the drug from the licensor (here Forest) to the licensee (here Mylan).
Plaintiffs deny that this is a complete or exclusive description of transfer price. For example, the
DRA Policy Inquiries, https://www.cms.gov/Regulations-and-
Guidance/Legislation/DeficitReductionAct/ downloads/DRAPolicyInquiries.pdf makes clear that
any royalties should be reflected in best price. Plaintiffs further deny that O’Shaughnessy Decl.
Ex. 76 provides support for this premise. The document is silent as to any best price or transfer
price issues. The document, a pre-Lexapro Amendment email, simply reflects that under the
Original Lexapro Agreement, Mylan was obligated to purchase authorized generic Lexapro from
Forest at Forest’s cost. See O’Shaughnessy Decl. Ex. 71 at § 5.5 (“Forest shall invoice
Alphapharm at the time of each shipment of Generic Product at the Manufacturing Costs for
such shipment.”); id. at § 1.16 (“‘Manufacturing Costs’ for each dosage strength of Generic
Product shall mean Forest’s direct costs ... of manufacture, packaging, testing, validation and
shipping of such Generic Product. . .”).
Forest’s Objection: Forest agrees that ¶ 209 is not “a complete or exclusive description
of transfer price,” and thus explained that a transfer price is generally reflective of the cost to
manufacture a drug. O’Shaughnessy Decl. I Ex. 76 provides an example of such a transfer price.
It shows that Mylan’s purchase price from Forest under the Original Lexapro Agreement was
Forest’s manufacturing cost. Id. Moreover, DPPs do not contest that O’Shaughnessy Decl. I Ex.
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72 supports the statement of fact, and DPPs’ response does not provide any evidentiary basis to
contest the statement, but instead attempts to “contextualize or dispute the relevance of the
statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist.
LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
210. Consistent with MDRP statutory, regulatory and sub-regulatory guidance,
Forest’s stated policy in effect in 2010 was to include the best price of an authorized generic,
which equated to the transfer price adjusted by the profit sharing/royalty amount, in Forest’s Best
Price.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 27; Ex. 336, Bonelli Dep. 55:8-56:12; Ex.
77, FRX-AT-04628295, at 299 (“This document is a government pricing
policy/methodology document intended to document Forest Laboratories, Inc.
interpretation and implementation of the applicable laws, regulations, industry standards
and corporate policy in the administration of the MDRP for the reporting periods
10/1/2007 and 9/30/2010.”), at 320 (“Pursuant to DRA regulation, if Forest sells an
authorized generic to another manufacturer, other than an unincorporated division, for
resale, it shall include in Best Price the net price (net of royalties and profit share) to the
purchasing manufacturer ....”).
Response: Denied. Plaintiffs deny that Forest’s policy documents describe a policy
that is “[c]onsistent with MDRP statutory, regulatory and sub-regulatory guidance[.]”
O’Shaughnessy Decl. Ex. 72. The report of Alexandra Bonelli is contradicted by her own
testimony, which Forest only partially cites above. See Litvin Decl. Ex. 257, Bonelli Dep. (Oct.
25, 2017) at 57:12-59:22 (specifically in reference to O’Shaughnessy Decl. Ex. 336, stating
“Again, I didn’t analyze how Forest calculated best price in totality” when asked “Do you think
that Forest did it right?”). There is no interpretation of the DRA consistent with Forest’s policies.
All public pronouncements by Congressional and regulatory stakeholders indicate that brand
companies should pay rebates on their authorized generics and their failure to do so prior to the
DRA was a loophole. See Responses to ¶¶ 202-207.
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Forest’s Objection: In their response to ¶ 209, DPPs “admit that a transfer price is
intended to reflect, as a component, the price of the drug from the licensor . . . to the licensee.”
DPPs further pointed out that the DRA Policy Inquiries document posted on CMS’ website
“makes clear that any royalties should be reflected in best price.” Forest’s policy indicates that
“if Forest sells an authorized generic to another manufacturer, other than an unincorporated
division, for resale, it shall include in Best Price the net price (net of royalties and profit share) to
the purchasing manufacturer.” Thus, as DPPs argue is proper in their response to ¶ 209, Forest’s
policy requires best price to be reflective of the transfer price offered by Forest to a licensee, and
“any royalties.” The deposition testimony of Ms. Bonelli cited by DPPs in this response does not
contest the fact that she reviewed Forest’s policies and found them consistent with MDRP
statutory, regulatory and sub-regulatory guidance. Her analysis is unrebutted.
DPPs point to no portion of Forest’s Standard Operating Procedure (O’Shaughnessy
Decl. I Ex. 77) (and there is no such portion) that suggests that Forest will not “pay rebates on
their authorized generics” and so DPPs’ argument is not responsive to the fact Forest set forth.
Thus, DPPs’ response consists of nothing more than improper argument and a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, to the extent DPPs allege that Forest violated
any laws, DPPs have cited no evidence to support that claim, and DPPs expert expressly stated
he was not opining on this issue. O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov. 10) Dep.
373:5-10. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
211. Even when increased to account for a royalty payment (like the one contemplated
under the Original Lexapro Agreement), a transfer price will be significantly lower than any
other “price available from the manufacturer during the rebate period to any wholesaler, retailer,
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provider, health maintenance organization, nonprofit entity, or governmental entity within the
United States,” and thus would become a brand manufacturer’s best price.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 28; Ex. 74, FRX-AT-04447018 (showing
that under the DRA, best price for Tiazac dropped from $1.023900 per unit to
$.098880per unit); see also Ex. 73, FRX-AT-04617599 (noting that even after revising
the best price estimate in Forest’s Lexapro Medicaid liability analysis to account for “the
profit expected per unit from Mylan’s net sales” and increasing the transfer price to
Mylan “by the amount of expected royalties,” using the transfer price as best price
represented “a significant cost” to Forest).
Response: Admitted in part, denied in part to the extent it requires a legal conclusion.
By way of further answer, Plaintiffs admit that the DRA was intended to increase the rebate paid
by brands to Medicaid, and the transfer price was intended to be the amount deducted from AMP
to arrive at the rebate amount. See O’Shaughnessy Decl. Ex. 72 at ¶¶ 2, 11, 17, 20 (Bonelli
Report). To increase the rebates, Congress and CMS intended that brand companies calculate
rebates based on the lowest commercial price. Id. at ¶ 22; Responses to ¶¶ 202-207. Plaintiffs
further admit that Congress and CMS intended Medicaid rebates to be a cost to brand
manufacturers who participated in the MDRP, including Forest. See Responses to ¶¶ 202-207.
Plaintiffs deny any suggestion that the Medicaid liability was such a “significant cost” so as to
make the Original Lexapro Amendment unprofitable to Forest, which recognized that “[h]aving
AG on market still makes sense...” O’Shaughnessy Decl. Exs. 74, 75.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Forest did not assert
in ¶ 211 that “the Medicaid liability was such a ‘significant cost’ so as to make the Original
Lexapro Amendment unprofitable to Forest” Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
212. Generally, the lower a manufacturer’s best price is, the higher its Medicaid Rebate
liability will be.
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Defendants’ Evidence: Ex. 78, FRX-AT-04617613 (“This will make the cost of the
Mylan deal even pricier in the Medicaid segment. Looks like we’re at about a $0.04$0.05
for a transfer price per unit, instead of $0.13); Ex. 79, FRX-AT-04617585 (“With a lower
Best Price, the Medicaid URA (Unit Rebate Amount) will increase ...”); Ex. 72, Bonelli
Rep., ¶ 29.
Response: Admitted in part, denied in part. Plaintiffs fully incorporate their Response
to ¶ 211, herein.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. In light of DPPs’
concessions in response to ¶ 211, DPPs have admitted this fact. Accordingly, the fact should be
deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
213. Since the DRA requires that a manufacturer include a transfer price in its best
price calculation, authorized generic agreements that require a brand manufacturer to sell a drug
to a third party at a transfer price result in substantially higher Medicaid rebate liability than
those that do not require such a sale.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 29 (“[W]hen a primary manufacturer
enters into an arrangement whereby it manufacturers its innovator drug, labels it with
another (secondary) manufacturer’s information and authorizes this secondary
manufacturer to sell this AG version into the commercial marketplace, the financial
relationship between the two parties (in the form of a transfer price increased by any
profit share/royalty) must be accounted for in the innovator drug’s Best Price. This
transfer price plus royalty price would be the lowest available non-government price,
would become the innovator drug’s Best Price, would have the effect of dramatically
lowering Best Price and would result in a dramatic increase the Medicaid rebate.”); Ex.
73, FRX-AT-04617599 at 601-02; Ex. 80, FRX-AT-04617768.
Response: Denied. Plaintiffs deny that Forest properly may raise its best price and
lower its Medicaid liability by entering a deal that does not require a sale of the authorized
generic to the generic company. See Responses to ¶¶ 202-207. Plaintiffs also deny that there are
any “authorized generic agreements that ... do not require” a sale from the brand to a third party,
other than the Lexapro Amendment. Forest has not identified any. Nor has Forest’s Medicaid
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expert recalled having seen any. See Litvin Decl. Ex. 257, Bonelli Dep. (Oct. 25, 2017) at
22:18-23:15 (“Q. Did any [pharmaceutical companies] come to you with a proposal to have the
secondary manufacturer manufacture the authorized generic instead of simply distributing it? A.
I don’t recall if any of my clients were in a situation or perhaps were having conversations
outside of what they had with me on whether they could or could not amend any of their AG
arrangements”). Moreover, the “typical” authorized generic agreement does “require a brand
manufacturer to sell a drug to a third party.” See O’Shaughnessy Decl. Ex. 72 at ¶ 30 (Bonelli
Report). Plaintiffs further deny any suggestion that the Medicaid liability was such a “significant
cost” so as to make the Original Lexapro Amendment unprofitable to Forest, which recognized
as soon as CMS implemented the DRA final rule in October, 2007 that “[h]aving AG on market
still makes sense . . .” See O’Shaughnessy Decl. Exs. 74, 75. Plaintiffs further deny that
O’Shaughnessy Decl. Exs. 73 or 80, referenced in ¶ 213 represents accurate reflections of
anticipated Medicaid liability savings, since the analyst responsible for the forecasts uncritically
accepted the model’s assumptions from the same individuals who were negotiating and justifying
the Lexapro Amendment, and admitted at deposition that this blind application of incorrect
assumptions led to errors in his calculations. See Litvin Decl. Ex. 276, Finchen Dep. (Nov. 21,
2017) at 32:8-23, 61:13-25. Correcting the analysis to account for accurate royalty rates resulted
in a lesser liability evasion. Id. at 44:20-25; 47:10-24.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
202-207. Further, DPPs cite to no portion of the DRA to support its contention that “Forest [may
not] properly raise its best price and lower its Medicaid liability by entering a deal that does not
require a sale of the authorized generic to the generic company.” Instead, DPPs’ responses to ¶¶
204, 211, and 222 essentially admit ¶ 213.
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There is similarly no evidence that James Finchen, the analyst who prepared the
Medicaid Liability Analyses, “uncritically accepted the model’s assumptions from the same
individuals who were negotiating and justifying the Lexapro Amendment,” or that he “admitted
at [his] deposition that this blind application of incorrect assumptions led to errors in his
calculations.” Rather, Mr. Finchen stated that if any of the assumptions appeared questionable,
he would have raised that as an issue. O’Shaughnessy Decl. II Ex. 385, Finchen Dep. 19:4-21.
To the extent DPPs’ response implies that the assumptions underlying the Medicaid analyses
were provided solely by the individuals negotiating the Lexapro Amendment, that is not
supported by the evidence, which shows that Mr. Finchen received numerous assumptions from
“various groups at Forest responsible for each of those areas of business,” including financial
planning and forecasts, contracting, and manufacturing. O’Shaughnessy Decl. II Ex. 385,
Finchen Dep. 56:14-22.
Mr. Finchen admitted that there was a minor clerical error in his final analysis, but this
did not affect the conclusion Mr. Finchen included in his declaration: that “in each case, I
calculated that Forest would incur at least $20 million less in Medicaid best price liability under
Scenario 2 as compared to Scenario 1.” Litvin Decl. Ex. 277, ¶ 14; Litvin Decl. Ex. 276,
Finchen Dep. at 44:20-24, 47:10-24 (using numbers Plaintiffs purport are correct, Mr. Finchen
calculated $28 million less in Medicaid liability under Scenario 2 as compared to Scenario 1).
Moreover, DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. There is not a scintilla of
evidence of fraud or cover up in 2010, and DPPs could identify none. See infra ¶ 238.
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
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214. Thus, the DRA exposed Forest to substantially more Medicaid liability under the
Original Lexapro Agreement than it was exposed to when it entered the agreement in 2005.
Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 29; Ex. 73, FRX-AT-04617599 at 601-02
(“[T]he deal with Mylan to provide a generic version of escitalopram beginning in March
2012 will have significant cost implications” because “[t]his arrangement will create a
new Best Price discount for branded Lexapro because the Deficit Reduction Act requires
that manufacturers include sales of an authorized generic in its Best Price calculations.”);
Ex. 80, FRX-AT-04617768; Ex. 366, Solomon (Nov. 15) Dep. 396:18-397:19; 416:13-
418:11.
Response: Admitted in part, denied in part. Denied to the extent the word “thus”
appears to incorporate other statements of fact. By way of further answer, Plaintiffs admit that to
the extent that Forest did not plan to pay a Medicaid rebate on authorized generic Lexapro based
on the loophole that various Senators, and CMS identified in the lead up to the passage of the
DRA, the DRA closed that loophole and required Forest to pay rebates. Plaintiffs deny any
suggestion that the DRA and CMS rules were not intended to require brand companies to pay
rebates on their authorized generics. See Responses to ¶¶ 202-213. Plaintiffs deny any suggestion
that the DRA made the Original Lexapro Agreement unprofitable to Forest, which recognized
that “[h]aving AG on market still makes sense ...” See O’Shaughnessy Decl. Exs. 74, 75.
Plaintiffs further deny any suggestion that the DRA is the reason for the Lexapro Amendment,
since, according to Defendants’ Medicaid expert, (1) it would have been reasonable for Forest to
seek to amend the Original Lexapro Agreement at any time between the passage of the DRA in
2005, and July 21, 2010, when the Original Lexapro Agreement was actually amended, see
Litvin Decl. Ex. 257, Bonelli Dep. (Oct. 25, 2017) at 71:6-14; and (2) Forest internally would
have known about the debate in Congress that preceded the Original Lexapro Deal but proceeded
with the Original Lexapro Agreement regardless. Id. at 99:18-103:5.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
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at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Forest incorporates by reference its responses to ¶¶ 202-213.
DPPs rely on O’Shaughnessy Decl. I Exs. 74 and 75 to contest a fact that Forest has not asserted;
namely, that despite the new Medicaid rules, “having AG on the market still makes sense.” And
those very documents confirm that the Lexapro Amendment would have resulted in tens of
millions of dollars of savings for Forest. Furthermore, DPPs essentially admit ¶ 214 in their
response to ¶ 222 (“Admitted that the transfer price from Mylan to Forest would have been less
than the Forest’s next lowest price, and that Medicaid liability would therefore be greater using
the transfer price.”). Additionally, to the extent DPPs allege that Forest violated any laws, DPPs
have cited no evidence to support that claim, and DPPs expert expressly stated he was not
opining on this issue. O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov. 10) Dep. 373:5-10.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
G. Projected Benefits of Forest Amending the Lexapro Agreement
215. Forest performed three analyses to assess the potential benefits of amending the
Original Lexapro Agreement: (1) a comparison of Forest’s post-DRA Medicaid Liability under
the Original Lexapro Agreement and Forest’s liability pursuant to a potential amendment
requiring Mylan to manufacture Generic Lexapro (“Medicaid Liability Analysis”), (2) a forecast
projecting Forest’s profit share revenue under the Original Lexapro Agreement and a potential
amendment to that agreement (“The Lexapro Sales Forecasts”), and (3) a projection of the
potential cost of goods sold savings Mylan could achieve if it manufactured Generic Lexapro
(“COGS Summary”).
Defendants’ Evidence: Ex. 82, FRX-AT-04617597; Ex. 83, FRX-AT-04617598; Ex. 73,
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FRX-AT-04617599; Ex. 84, FRX-AT-04617605; Ex. 85, FRX-AT-04617606; Ex. 86,
FRX-AT-04617612; Ex. 87, FRX-AT-04617623; Ex. 88, FRX-AT04617630; Ex. 89,
FRX-AT-04617640; Ex. 90, FRX-AT-04617645; Ex. 91, FRX-AT-04617664; Ex. 92,
FRX-AT-04617667; Ex. 93, FRX-AT-04617668; Ex. 94, FRX-AT-04617673; Ex. 95,
FRX-AT-04617674; Ex. 96, FRX-AT-04617708; Ex. 97, FRX-AT-04617712; Ex. 98,
FRX-AT-04617713; Ex. 99, FRX-AT-04340635; Ex. 100, FRX-AT-04340640; Ex. 101,
FRX-AT-04617748; Ex. 102, FRX-AT-04617753; Ex. 103, FRX-AT-04617764; Ex. 80,
FRX-AT-04617768; Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex. 124,
FRX-AT-04617128; Ex. 314, FRX-AT-04617111; Ex. 315, FRX-AT-04617112; Ex. 105
FRX-AT-04617116; Ex. 106, FRX-AT-04617117; Ex. 107 FRX-AT-04617118; Ex. 108,
FRX-AT-04340639; Ex. 109, FRX-AT-04617528; Ex. 110, FRX-AT-04617530; Ex. 111,
FRX-AT-04617617; Ex. 112, FRX-AT-04617618; Ex. 113, FRX-AT-04617631; Ex. 114,
FRX-AT-04617633; Ex. 115, FRX-AT-04617643; Ex. 116, FRX-AT-04617654; Ex. 117,
FRX-AT-04617657; Ex. 118, FRX-AT-04617658; Ex. 119, FRX-AT-04340638.
Response: Denied. The evidence Defendants cite does not support their contention
and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002)
(Rule 56 “places the initial burden on the moving party to identify ‘those portions of the
‘pleadings, depositions, answers to interrogatories, and admissions on file, together with
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Although Defendants cite
documents that discuss the Medicaid Liability under the Original Lexapro Agreement as a result
of changes in the DRA, forecasts and cost of goods sold, the cited documents do not support the
conclusion that these documents were created to assess the “potential benefits.” The final
analyses were not created until after Forest and Mylan told the Namenda IR patent court that it
had reached a settlement in principle, thus they could not have been performed to assess the
“potential benefits” of the transaction, which had already been agreed to. See, e.g.,
O’Shaughnessy Decl. Exs. 80, 101, 102, 103, 104, 107, 127 (analyses dated March 15 through
17, 2010 which are the only analyses of the exhibits listed that purport to reflect the final terms
of the Lexapro Amendment, such as a second year minimum term and a reduced royalty owed by
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Mylan); Litvin Decl. Ex. 277, Finchen Decl.3 (Oct. 3, 2017) at ¶ 15 (swearing under the penalty
of perjury that O’Shaughnessy Decl. Ex. 80, dated March 16, 2010, was “the latest Lexapro
Medicaid best price analysis conducted in advance of execution of the Lexapro Amendment.”);
O’Shaughnessy Decl. Ex. 103 (cover email to O’Shaughnessy Decl. Ex. 80, dated March 16,
2010, explaining adjustments to Medicaid savings model that inflated the amount of savings
based on assumptions provided by the team that negotiated the Lexapro amendment and applied
uncritically, at least some of which proved to be inaccurate (see Response to ¶ 213); Litvin Decl.
Ex. 437, FRX-AT-04579626 (March 16, 2010 joint letter from Mylan and Forest informing
Judge Sleet that the day before (March 15), the parties reached an agreement-in-principle.);
Litvin Decl. Ex. 251, WSGRMEMA_000100 (March 17, 2010 email from Forest’s in house
counsel to Mylan’s counsel attaching a draft Lexapro Amendment, with the same material terms
as the final agreement, but not the Namenda IR patent settlement agreement).
Plaintiffs also assert that the analyses were not created to assess the potential benefits of a
Lexapro Amendment but were created to provide a false and pretextual justification or
explanation for revising the Lexapro deal with Mylan for the illicit purposes of delaying the
entry of generic Namenda IR. See, e.g., Litvin Decl. Ex. 221, FRX-AT-04628195 (Document
entitled “Mylan deal concept” prepared for a meeting with Mylan laying out initial reverse
payment terms and incorporating information from the referenced analyses); Litvin Decl. Ex.
222, FRX-AT-04628198 (later draft of same document); Litvin Decl. Ex. 176, FRX-AT-
03882414 at 17-18 (explaining that Mylan could reap “millions” in the Lexapro Amendment
while its profits from winning the Namenda IR patent litigation and launching would be
“miniscule”); O’Shaughnessy Decl. Ex. 103 (cover email to O’Shaughnessy Decl. Ex. 80, dated
3 Defendants’ Declaration of Kristen O’Shaughnessy attaches Mr. Finchen’s declaration
without its exhibits.
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March 16, 2010, explaining adjustments to Medicaid savings model that inflated the amount of
savings to an amount roughly equivalent to the reverse payment, based on assumptions provided
by the team that negotiated the Lexapro amendment and applied uncritically, at least some of
which proved to be inaccurate. Correcting the assumptions served to lower the Medicaid rebate
liability associated with the Lexapro Amendment. (see ¶ 213, supra); Litvin Decl. Ex. 219,
FRX-AT-04617771 (only after securing the inflated and inaccurate “final” Medicaid savings
forecast from Mr. Finchen, which was after the parties reached agreement in principle, did Mr.
Carnevale propose to send the analyses to Forest’s outside antitrust counsel, along with
information regarding the generic Namenda IR entry date); Litvin Decl. Ex. 261, Bruno Report ¶
87 (“In 2010, Forest created a table summarizing the costs of Lexapro production with inputs
that appeared inflated and thus could not serve to justify the Lexapro deal with Mylan”); id. ¶ 88
(“There does not appear to be a legitimate basis for Forest’s predictions”); id. ¶ 99; Litvin Decl.
Ex. 262, Bruno Reply Report ¶ 22 (“it is unclear for what purpose [the projections] were
produced or the reasonableness of the underlying assumptions.”); O’Shaughnessy Decl. Ex. 55,
Berndt Reply Report ¶ 38 (“unlike the forecasts that Forest prepared in 2012-13 in connection
with the launch of Namenda XR, I conclude that the unsupported Lexapro forecasts conducted in
2010 are based on unreasonable and implausible assumptions about the impact that would result
from a large number of generic entrants under the circumstances of the generic Lexapro
launch.”); id. ¶ 59 (“the forecasted benefits to Forest were so grossly unreasonable and
unreliable, and seriously biased. I can only conclude that Forest’s forecasts were not designed to
provide Forest’s executives with a rational expectation of how Forest would profit under the
Forest-Mylan agreement as amended.”); id. ¶ 58 (“Forest’s projection errors in calendar year
2013 were, remarkably, even more egregious. While Forest projected its annual profit share in
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2013 would sum to just under $33 million over the four quarters, in fact in each of the four
quarters of 2013 the actual profit share was zero dollars, for a grand annual total in 2013 of
$0.00.”); id. ¶ 42 (“The assumptions reflected in the Forest documents that Mr. Green
uncritically relied upon were completely at odds with the contemporaneous literature that would
underlie any reasonable analysis of expected market share, generic pricing, and anticipated profit
from the AG.”); see also id. ¶ 36, 37 and Ex. F.
Forest’s Objection: DPPs’ admit that Forest’s forecasts were “used to prepare a Forest
representative for a meeting with Mylan.” PASOF ¶ 227. DPPs argument that Forest did not
prepare “final analyses . . . until after Forest and Mylan told the Namenda IR patent court that it
had reached a settlement in principle” in the patent case does nothing to dispute the fact that
Forest prepared the cited analyses to assess the potential benefits of the Lexapro Amendment. It
is true that Forest and Mylan notified the court of an agreement-in-principle with respect to the
patent settlement agreement on March 16, 2010. Litvin Decl. Ex. 437. However, nowhere in its
notice to the Court is any agreement-in-principle related to Lexapro mentioned. Litvin Decl. Ex.
251. DPPs seek to use March 15, 2010 as a cut-off date beyond which Forest’s analyses should
not be credited and should be presumed fraudulent, but these analyses were prepared
contemporaneously with Forest and Mylan’s negotiation of a near-final Lexapro deal. As DPPs
assert, Forest’s in house counsel sent Mylan’s counsel a draft Lexapro Amendment “with the
same material terms as the final agreement” on March 17, 2010. Id. Forest’s final analyses were
prepared between March 15, 2010 and March 17, 2010. Moreover, Forest’s March 17th email to
Mylan’s counsel indicates that “the draft is still subject to some internal legal and business
review,” indicating that Forest was still in the process of evaluating the terms of the agreement.
Id.
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Furthermore, the documents DPPs offer to show that the analyses were “created to
provide a false and pretextual justification or explanation for revising the Lexapro deal with
Mylan for the illicit purposes of delaying entry of generic Namenda IR” do not support their
contention. See Litvin Decl. Exs. 176, 221, 222 (silent as to the authenticity of the analyses);
O’Shaughnessy Decl. I Ex. 103 (discusses changes to a Medicaid savings analysis, but does not
indicate that adjustments were made to “inflat[e] the amount of savings to an amount roughly
equivalent to the reverse payment” – the document does not reference any payments made from
Forest to Mylan under the proposed Lexapro Amendment); Litvin Decl. Ex. 219 (document does
not support that the Medicaid savings analysis was “inflated” or “inaccurate,” nor does Mr.
Carnevale propose sending anything to antitrust counsel. He asks if “this” is ready to send to
antitrust counsel, but does not specify if he is referring to all of the information shared in his
email, the Lexapro analyses alone, or the Namenda information alone); Litvin Decl. Ex. 261, ¶
87 (does not cite any support for the contention that the inputs in the Lexapro analyses “appeared
inflated”); id. at ¶ 88 (does not provide any support for the proposition that “[T[here does not
appear to be a legitimate basis for Forest’s predictions.” Prof. Bruno bases this opinion on the
fact that the predicted cost savings could not be explained by a difference in labor rates, but
acknowledges that “There are a number of potential reasons why there is a difference.”), id. at ¶
99 (does not provide any support for the contention that Forest’s numbers were “inflated”);
Litvin Decl. Ex. 262 (DPPs’ purported expert’s opinion that “it is unclear for what purpose [the
projections] were produced or the reasonableness of the underlying assumptions” does not
support that the projections provided a false and pretextual justification for the Lexapro
Amendment); O’Shaughnessy Decl. I Ex. 55, ¶ 38 (even assuming that Plaintiffs’ expert’s
opinion that Forest’s analyses were unreasonable is correct (which Forest does not admit), that
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does not support the proposition that they were created to “provide a false and pretextual
justification” for the Lexapro Amendment); id. at ¶ 58-59 (these paragraphs simply compare
Forest’s projections with the real world outcome to argue that, in hindsight, the analysis were
incorrect; but even if that were true, the mere post-hoc acknowledgement that the projections did
not precisely predict the future does not indicate that such projections were created as false and
pretextual justifications for the Lexapro Amendment), ; id. at ¶ 42 (cites to articles discussing the
effect of several generic entrants on price and expected market share, but does not provide any
analysis of the situation that Forest faced. Forest’s authorized generic product was launched two
weeks prior to entry by any competitor, and it shared market exclusivity with one generic entrant
for 180 days before other generic filers were permitted to enter.); id. at ¶¶ 36-37 (generally and
briefly mention that Mr. Green considered Forest’s analyses and that generally there is a body of
literature theorizing that the more generic competitors enter a market, the lower the price of the
generic and market share per competitor will be expected to be. This does not speak to Forest’s
motivation for producing its analyses).
There is similarly no evidence that James Finchen, the analyst who prepared the
Medicaid Liability Analyses, “uncritically accepted the model’s assumptions from the same
individuals who were negotiating and justifying the Lexapro Amendment,” or that he “admitted
at [his] deposition that this blind application of incorrect assumptions led to errors in his
calculations.” Rather, Mr. Finchen stated that if any of the assumptions appeared questionable,
he would have raised that as an issue. O’Shaughnessy Decl. II Ex. 385, Finchen Dep. 19:4-21.
To the extent DPPs’ response implies that the assumptions underlying the Medicaid analyses
were provided solely by the individuals negotiating the Lexapro Amendment, that is not
supported by the evidence, which shows that Mr. Finchen received numerous assumptions from
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“various groups at Forest responsible for each of those areas of business,” including financial
planning and forecasts, contracting, and manufacturing. O’Shaughnessy Decl. II Ex. 385,
Finchen Dep. 56:14-22.
Mr. Finchen admitted that there was a minor clerical error in his final analysis, but this
did not affect the conclusion Mr. Finchen included in his declaration: that “in each case, I
calculated that Forest would incur at least $20 million less in Medicaid best price liability under
Scenario 2 as compared to Scenario 1.” Litvin Decl. Ex. 277, ¶ 14; Litvin Decl. Ex. 276,
Finchen Dep. at 44:20-24; 47:10-24 (using numbers Plaintiffs purport are correct, Mr. Finchen
calculated $28 million less in Medicaid liability under Scenario 2 as compared to Scenario 1).
DPPs’ contention that the Lexapro analyses are “false” and “pretextual” justifications of
the Lexapro Amendment are simply unsupported by any record evidence and is nothing more
than speculation that “cannot be presented in a form that would be admissible in evidence.” Fed.
R. Civ. P. 56(c). The only “evidence” to support DPPs’ assertions consists of purported expert
opinion, untethered to the evidence in the case, and therefore cannot create a genuine issue of
fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997)
(“[A]n expert’s report is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v.
British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony
without a factual foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256
(2d Cir. 2001); see also Brooke Grp. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 242
(1993) (“When an expert opinion is not supported by sufficient facts to validate it in the eyes of
the law, or when indisputable record facts contradict or otherwise render the opinion
unreasonable, it cannot support a jury’s verdict.”).
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In sum, DPPs do not (and cannot) point to anything even suggesting that these forecasts
were not prepared in the ordinary course of business, just before the time of execution of the
Lexapro Amendment, and were relied on by senior Forest management in deciding to pursue the
amendment. Plaintiffs’ expert Dr. Berdnt admitted that he was not claiming the forecasts were a
sham. O’Shaughnessy Decl. II Ex. 377, Berndt Dep. 73:13-16, 276:7-15, 279:7-15. And
whether the forecasts panned out exactly as expected is not relevant as Prof. Elhauge himself
admitted. See Forest’s Mem. in Support of its Mot. for Summ. J. (“SJM”) (Nov. 17, 2017) at 30
(admitting that the parties’ contemporaneous expectations are what matters, not whether the
analyses or assumptions therein “actually turned out to be the case.”).
Furthermore, DPPs’ response consists of improper argument and a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
216. Forest created these analyses to inform their negotiations with Mylan about a
potential amendment to the Original Lexapro Agreement, and to assess whether such an
amendment would ultimately be valuable for Forest.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 257:20-258:12 (indicating he had not seen
evidence that the Lexapro Amendment analyses were shared with Forest management,
but “could change [his] opinion” if such documents existed.).
Defendants’ Evidence: Ex. 120, FRX-AT-04407590 (showing that the three analyses
were used to prepare a Forest representative for a meeting with Mylan); Ex. 366,
Solomon (Nov. 15) Dep. 422:10-424:24 (“Q. As the person negotiating the business deal
with Mylan, did you believe those estimates to be reliable and to reflect the best estimates
of people with knowledge about those issues? A. Yes. We would have relied on the
numbers that were provided by the people within the area of expertise. That was their
role and -- absolutely, we would have relied on them to know what they were talking
about.” Ex. 332, Carnevale Dep. 123:7-19 (“[I]n a business deal, you always do analysis
to understand, you know, what you are currently receiving in sales, how the market is
going to be impacted by an authorized generic and the business deal itself. You try to lay
out here as best as you can, making some key assumptions about, you know, the money
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that’s going to be - - that you are going to make on the deal and whether it is valuable to
you.”); Ex. 69, Green Rep., ¶¶ 48-49 (analyzing Forest’s analyses undertaken during the
Lexapro Amendment negotiations); Ex. 338, Green Dep. 98:12-20 (indicating there were
a “variety of different forecasts that were prepared in early 2010 by Forest”).
Response: Denied. Defendants misrepresent Dr. Berndt’s testimony. Reviewing the
testimony in context, Dr. Berndt was asked about his statement in his reply report at “The bottom
of Paragraph 39 on Page 32, you say, quote, ‘I am aware of no evidence, and Mr. Green cites
none, that reveals the purpose for which the projections were prepared.” Litvin Decl. Ex. 438,
Berndt Dep. (Nov. 2, 2017) at 255:5-8. Dr. Berndt testified “What I stated here was Mr. Green
has not provided any evidence that these particular projections were ones that were made in the
normal course of Forest’s forecasting, and as we’ve seen from the Namenda case, those
[Namenda] forecasts were done with great care, they considered analogues, they were done over
a period of more than a year, and he cites -- I state here, nothing that reveals the purpose for
which these particular projections [about generic Lexapro] were prepared.’” Id. at 256:6-15. He
is then asked if it “would change your opinion here as to whether or not you’re aware of any
evidence that these Lexapro forecasts were actually used in negotiating the Lexapro amendment
with Mylan?” Dr. Berndt replies that “It could change my opinions; I’d have to see the
documents and understand their context.” Id. at 258:3-12. That exchange simply demonstrates
that Dr. Berndt would be willing to consider the documents and understand their context before
determining their potential impact on his opinion – just as any reasonable expert would.
Unfortunately for Defendants, Defendants’ counsel did not show Dr. Berndt any such
documents. Moreover, the only opinion that was at issue was whether Mr. Green had any
documents that might “reveal the purpose for which the projections were prepared.” Id. at 256:6-
15. Defendants’ snippet, stripped completely of context, does not support the notion that Dr.
Berndt admitted he would reconsider his opinion concerning the reliability of the forecasts.
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Even assuming the forecasts were “used in negotiating the Lexapro amendment with Mylan” as
the question to Dr. Berndt posed, it says little about whether they were created to inform Forest
about their reasonable expectations from the Lexapro amendment, or were for the purpose of
making the Lexapro amendment appear to have greater value to Forest than it actually did so as
to paper over a payment to Mylan to agree to the settlement.
The statement is further denied to the extent that statements of a subjective basis for
doing an act necessarily involve questions of credibility that cannot be characterized as an
undisputed fact.
Forest’s Objection: DPPs’ response takes issue only with Forest’s citation to Dr.
Berndt’s deposition testimony (O’Shaughnessy Decl. I Ex. 349). Forest cites to substantial
additional evidence (including the testimony of David Solomon) supporting its contention that
Forest created the Lexapro analyses to inform their negotiations with Mylan about a potential
amendment to the Original Lexapro Agreement, and to assess whether such an amendment
would ultimately be valuable for Forest. DPPs dispute none of the other cited evidence, and cite
no evidence of their own to support their frivolous contention that the settlements were prepared
“to paper over a payment to Mylan.” As discussed above in Forest’s Objection to DPPs’
Response to ¶ 216, speculation and innuendo cannot create a genuine issue of material fact.
Thus, DPPs’ response consists of nothing more than a recitation of different purported facts, but
no evidentiary basis to contest the statement. Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
217. None of Plaintiffs’ experts take issue with Mr. Green’s application of a Net
Present Value analysis to Forest’s expected benefits to generate Forest’s net expected value from
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the Amendment to Distribution and Supply Agreement (Generic Lexapro) (“Lexapro
Amendment”).
Plaintiffs’ Admissions: Ex. 368, Elhauge (Nov. 10) Dep. 288:10-18 (indicating Prof.
Elhauge used same net present value analysis as Mr. Green to determine Forest’s Best
Price savings); Ex. 121, Revised Expert Report of Professor Einer Elhauge (“Elhauge
Rep. I”), ¶ 11 (indicating Professor Elhauge used a 10% discount rate, the same rate as
used by Mr. Green, to calculate the size of the alleged reverse payment); Ex. 122,
Rebuttal Expert Report of Professor Einer Elhauge (“Elhauge Rep. II”), ¶ 23
(acknowledging, and not disputing, Mr. Green’s new present value analysis as applied to
Forest’s Medicaid savings); Ex. 337, Bruno Dep. 163:14-20 (“Q. And you’re not using
standards from the FASB (Financial Accounting Standards Board), correct? A. I’m not
using the typical accounting standards that you want to apply.”).
Response: Admitted in part, denied in part. Plaintiffs agree that use of a Net Present
Value analysis is not inappropriate in net value analysis, however Plaintiffs’ experts dispute Mr.
Green’s analysis in all other respects to the extent that it purportedly shows that Forest expected
to generate net value from the Lexapro Amendment. Litvin Decl. Ex. 262, Bruno Reply Report
¶¶13-29; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 34-59; O’Shaughnessy Decl. Ex.
121, Elhauge Report ¶¶ 1-35. Plaintiffs deny that the Medicaid rebate savings was an expected
benefit to Forest that it received from Mylan. Plaintiffs deny that the Medicaid rebate savings
are properly net against the costs to Forest of the Lexapro Amendment. Plaintiffs deny the
accuracy of the assumptions used in Medicaid and Lexapro sales analyses, and thus the
conclusions of the analyses, and thus the net present value analysis performed by Mr. Green.
Plaintiffs deny that it is appropriate to attribute the entirety of any Medicaid rebate savings to the
Lexapro Amendment since those same savings could be achieved without any reverse payment, a
result which would also affect Mr. Green’s net present value analysis. See O’Shaughnessy Decl.
Ex. 122 at ¶¶ 4, 23-24 (Elhauge Reply Report). Plaintiffs deny that the cited testimony from the
Bruno Deposition supports the contentions made in ¶ 217. Denied in all other respects.
Forest’s Objection: DPPs admit the fact asserted here—that it is appropriate to use a net
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present value calculation to assess fair value of business deals. The balance of DPPs’ response
consists of improper argument or a recitation of different purported facts, but no evidentiary
basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
Forest’s Projected Savings from Shifting i.
Manufacturing of the Lexapro Authorized Generic to
Mylan
218. Mylan acquired Alphapharm in 2007.
Public Source: Mylan in Australia, MYLAN, http://www.mylan.com.au/en-
au/company/mylan-in-australia (last visited October 7, 2017).
Response: Admitted.
219. On July 21, 2009 Mylan approached Forest to obtain the information necessary to
model expectations for the authorized generic product under the Original Lexapro Agreement.
Defendants’ Evidence: Ex. 76, FRX-AT-04617480 (“I received a call from a gentlemen
at Mylan today ... who was referred to me by Charles Ryan. He is trying to model
expectations for the authorized generic product under the Distribution Right Agreement
with Alphapharm for Lexapro and wanted to know our cost of manufacture (which is
their purchase price)”).
Response: Denied. The evidence cited consists of inadmissible hearsay within
hearsay and does not establish the truth of the matter asserted – e.g., that Mylan actually
approached Forest on July 21, 2009 or for what purpose. The evidence Defendants cite does not
support their contention and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d
162, 165 (2d Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those
portions of the ‘pleadings, depositions, answers to interrogatories, and admissions on file,
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together with affidavits, if any, which it believes demonstrate the absence of a genuine issue of
material fact.”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).
Forest’s Objection: O’Shaughnessy Decl. I Ex. 76 is an email which is admissible via
Rule 803(6)’s “Record of Regularly Conducted Activity” exception to the hearsay rule. Fed. R.
Evid. 803(6). The email has memorialized a phone call between Forest and Mylan the same day
the phone call occurred, is an email kept in the ordinary course of business at Forest and as a
regular practice of emailing at Forest, and DPPs have not shown that the method or
circumstances of preparation indicate a lack of trustworthiness. Id. Moreover, the fact of the
phone call having happened is not hearsay as it is not an out of court statement offered for the
truth of the matter asserted.
The fact of whether Mylan did or did not “model expectations for the authorized generic
product under the Original Lexapro Agreement” is not relevant to support the assertion in ¶ 219.
This email is admissible for the proposition that Mylan approached Forest and asked for this
information. Plaintiffs point to no contradictory evidence. The fact should be deemed admitted.
In any event, DPPs have not shown “that the material cited to support or dispute a fact
cannot be presented in a form that would be admissible in evidence,” but merely argued
(incorrectly) that the exhibit is not yet admissible. Fed. R. Civ. P. 56(c)(2). Moreover, DPPs’
response does not provide any evidentiary basis to contest the statement, but instead attempts to
“contextualize or dispute the relevance of the statement,” which is an improper use of a Rule
56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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220. By July 22, 2009, and in conjunction with Forest’s internal discussions about the
cost implications of the DRA’s effect on Medicaid best price, Forest decided to approach Mylan
to discuss a possible adjustment to the Original Lexapro Agreement.
Defendants’ Evidence: Ex. 76, FRX-AT-04617480 (“You should let [Mylan] know that
we would like to have a meeting in the fall to discuss a possible adjustment to the deal
structure. In addition to understanding the legal aspect, we should look at the potential
cost of the best price issue.”); Ex. 324, Solomon (Sept. 7) Dep. 103:14-106:24 (“So we
had an original agreement with Alphapharm, which was now Mylan, under which we
were meant to supply the product to Mylan for them to sell the authorized generic. And
we recognized that based on that existing supply arrangement we would wind up with a
very significant liability due to the best price issue, and so we wanted to change that –
that supply arrangement, so that we were not supplying Mylan.”); Ex. 366, Solomon
(Nov. 15) Dep. 396:18-397:19 (“So, we had identified that was an issue that we needed to
address. We had identified it before any discussion of a settlement with Mylan arose, and
it was an issue that we needed to address.”).
Response: Denied. The evidence cited consists of inadmissible hearsay and does not
establish the truth of the matter asserted. The evidence Defendants cite does not support their
contention and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d
Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those portions of
the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The cited evidence does not
establish that Forest actually approached Mylan at all, much less, “in conjunction with Forest’s
internal discussions about the cost implications of the DRA’s effect on Medicaid best price” or
that Forest had decided to approach Mylan to discuss a possible adjustment to the Original
Lexapro Agreement, or when. Nor does the cited testimony from David Solomon establish that
any decision was made “[b]y July 22, 2009” or at all, to approach Mylan. Plaintiffs incorporate
the evidence cited in their Responses to ¶¶ 215-217.
The statement is further denied to the extent that statements of a subjective basis for
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doing an act involve questions of credibility that cannot be characterized as an undisputed fact.
Forest’s Objection: O’Shaughnessy Decl. I Ex. 76 is an email which is admissible via
Rule 803(6)’s “Record of Regularly Conducted Activity” exception to the hearsay rule. Fed. R.
Evid. 803(6). The email was kept in the ordinary course of business at Forest and as a regular
practice of emailing at Forest, and DPPs have not shown that the method or circumstances of
preparation indicate a lack of trustworthiness. Id. In any event, DPPs have not shown “that the
material cited to support or dispute a fact cannot be presented in a form that would be admissible
in evidence,” but merely argued (incorrectly) that the exhibit is not yet admissible. Fed. R. Civ.
P. 56(c)(2). Moreover, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
DPPs’ responses to ¶¶ 215-217 do not dispute the fact asserted here, and in any event,
Forest fully incorporates its objections to DPPs’ responses to ¶¶ 215-217.
221. In January 2010, Forest began to compare the additional Medicaid rebate liability
it would incur under the Original Lexapro Agreement, by manufacturing an authorized generic
version of Lexapro for Mylan’s distribution and sale (“Scenario 1”), with the Medicaid rebate
liability Forest would incur under a possible amendment, whereby Mylan manufactured the
authorized generic version of Lexapro for its own distribution and sale (“Scenario 2”).
Defendants’ Declaration: Ex. 123, Declaration of James Finchen (“Finchen Decl.”) (Oct.
3, 2017) ¶¶ 7-8; Ex. 73, FRX-AT-04617599 (“Scenario 1 – Sell to Mylan”; “Scenario 2 –
no transfer price”); Ex. 84, FRX-AT-04617605.
Response: Denied. Forest began analyzing its Medicaid rebate liability under the
DRA as early as October 18, 2007 and recognized that even in the absence of the Lexapro
Amendment, “[h]aving AG on market still makes sense ....” O’Shaughnessy Decl. Exs. 74, 75.
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Plaintiffs admit that between October 2007 and January 2010, Forest did not revisit the issue.
Forest’s Objection: DPPs’ contention that “Forest began analyzing its Medicaid rebate
liability under the DRA as early as October 18, 2007” is correct. O’Shaughnessy Decl. I Ex. 74
shows that Forest estimated its liability under the DRA for two drugs: Tessalon and Tiazac. It
further explains that in the attached slides (O’Shaughnessy Decl. I Ex. 76), there is a Lexapro
slide that shows “the impact of [Best Price] should we decide to have an authorized generic for a
branded product.” The email explains the conclusion of the analysis presented in
O’Shaughnessy Decl. I Ex. 75: “Assuming Medicaid is 9% of total prescriptions, it still makes
sense to have an authorized generic.” (emphasis added). Thus, Forest does not dispute that it
began analyzing the impact of Medicaid rebate liability on the Origianl Lexapro Agreement in
the ordinary course of business well before the Namenda patent litgation was commenced and
that at that time it prepared high level estimates of the impact of new Medicaid regulations. See
¶¶ 215, 219-20.
However, nowhere in O’Shaughnessy Decl. I Ex. 74 or O’Shaughnessy Decl. I Ex. 75
does Forest “compare” the Medicaid rebate liability it would incur under the Original Lexapro
Agreement with a possible amendment. Therefore, the exhibits that DPPs offer to contest the
proposition in ¶ 221 do nothing to dispute the fact that Forest began this comparison in January
2010.
222. Forest analyzed the DRA’s effect on Lexapro’s best price and concluded that,
under the Original Lexapro Agreement, the transfer price that Mylan would pay Forest for
manufacturing authorized generic escitalopram would be “much lower” than the 2010 best price,
(which was “only a 20% discount to WAC”), even after increasing the transfer price to account
for Forest’s profit share under an amendment.
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Defendants’ Evidence: Ex. 73, FRX-AT-04617599, at 602; Ex. 80, FRX-AT-04617768
(Forest’s March 2010 Medicaid Liability Analysis shows Forest estimated Best Price to
be $0.57, or an 82.8% discount to WAC in Q1 2012); Ex. 103, FRX-AT-04617764
(concluding that with a graduate profit share, “[t]he adjustments to the profit share
arrangement result in a lower best price in the initial quarters of the deal because Forest’s
profit share of each unit that Mylan sells is now lower, and this is a component of the
transfer price.”); Ex. 78, FRX-AT-04617613 (Forest analyzed how the transfer price to
Mylan might affect its Medicaid Liability, “This will make the cost of the Mylan deal
even pricier in the Medicaid segment. Looks like we’re at about a $0.04-$0.05 for a
transfer price per unit, instead of $0.13.”).
Response: Denied as to any suggestion of the accuracy of any of Forest’s
assumptions, which were provided by the same individuals who were negotiating the Lexapro
Amendment and which were applied uncritically by Forest’s analysts. See Response to ¶¶ 213,
215. Denied that O’Shaughnessy Decl. Ex. 103 in particular represented an accurate treatment
of the effects of the graduated royalty on Forest’s best price liability. See Response to ¶¶ 213,
215. Forest’s analyst admitted during deposition that these assumptions were inaccurate but
applied uncritically. See Response to ¶¶ 213, 215. Admitted that the transfer price from Mylan
to Forest would have been less than the Forest’s next lowest price, and that Medicaid liability
would therefore be greater using the transfer price.
The statement is further denied to the extent that statements of a subjective basis for
coming to a conclusion necessarily involve questions of credibility that cannot be characterized
as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. In addition, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
223. Forest expected that the significantly lower Best Price contemplated under the
DRA would greatly increase the Medicaid URA for Lexapro.
Defendants’ Evidence: Ex. 73, FRX-AT-04617599 at 602 (“As a consequence of this
significantly lower Best Price, the statutory Medicaid URA (Unit Rebate Amount) will
increase beyond the point where we have to pay a URA that exceeds the WAC.”); Ex. 78,
FRX-AT-04617613 (“This will make the cost of the Mylan deal even pricier in the
Medicaid segment. Looks like we’re at about a $0.04-$0.05 for a transfer price per unit,
instead of $0.13.”).
Response: Denied as to any suggestion of the accuracy of any of Forest’s
assumptions, which were provided by the same individuals who were negotiating the Lexapro
Amendment and which were applied uncritically by Forest’s analysts. See Response to ¶¶ 213,
215. Forest’s analyst admitted during deposition that these assumptions were inaccurate but
applied uncritically. See Response to ¶¶ 213, 215. See also O’Shaughnessy Decl. Ex. 73 at
FRX-AT-04617599 at 600 (correctly instructing analysts to use the 40% royalty rate rather than
the incorrect graduated royalty rate used in the final analyses.); id. at 603 (referring to notion that
the URA would exceed WAC as a “quick and dirty analysis” and stating “[w]e don’t want to
give you a false sense of precision.”). Denied that the Medicaid liability was such a “significant
cost” so as to make the Original Lexapro Amendment unprofitable to Forest, which recognized
that “[h]aving AG on market still makes sense ...” O’Shaughnessy Decl. Exs. 74, 75. Admitted
that the transfer price from Mylan to Forest would have been less than the Forest’s next lowest
price, and that Medicaid liability would therefore be greater using the transfer price.
The statement is further denied to the extent that statements of a subjective basis for an
expectation necessarily involve questions of credibility that cannot be characterized as an
undisputed fact.
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Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. In addition, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
224. Forest believed that the significantly lower Best Price may lead to as much as $75
million in additional Best Price liability.
Defendants’ Evidence: Ex. 366, Solomon (Nov. 15) Dep. 416:13-418:11 (“And I recall
that at some point numbers as high as 70 to 75 [million] were invoked.”).
Response: Denied. Forest has not produced a single document or any other
contemporaneous evidence suggesting $75 million in additional liability or anything close to it.
When pressed during each of his depositions, Mr. Solomon admitted that he had seen no such
documents. Nor could he recall any specific conversation with anyone regarding such figures.
See Litvin Decl. Ex. 460, Solomon Dep. (Sept. 7, 2017) at 358:12-359:8 (“Q. So sitting here
today, do you have a firm understanding of where that 70 million dollar figure ... is based on ...?
A. I don’t.”); O’Shaughnessy Decl. Ex. 366 at 418:19-24 (Solomon (Nov. 15) Dep.) (“Q. Do you
recall any person specifically telling you about potential 70 to 75 million[] in Medicaid – A. I
think as I said, I don’t recall a specific conversation or document.”).
The statement is further denied to the extent that statements of a subjective basis for a
believe necessarily involve questions of credibility that cannot be characterized as an undisputed
fact.
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Forest’s Objection: DPPs’ response does not provide any contrary evidence that
conflicts with Mr. Solomon’s testimony, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25.
Moreover, DPPs are simply wrong that Forest has produced no other evidence supporting
the $70-75 million figure. In fact, Mr. Solomon’s testimony is directly supported by
O’Shaughnessy Decl. I Ex. 75, FRX-AT-04447019. Exhibit 75 estimated the impact of the new
Medicaid regulations on Forest’s best price exposure would be $77 million. Id. at FRX-AT-
04447019_006 (noting “Medicaid ‘lost’ sales due to AG Best Price” to be $77 million).
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
225. Various groups at Forest that specialized in particular areas provided key
assumptions and inputs that were incorporated into the Medicaid rebate liability forecast.
Defendants’ Declaration: Ex. 123, Finchen Decl. ¶ 13; Ex. 332, Carnevale Dep.
106:1524, 117:8-24, 196:1-19, 198:1-8; Ex. 75, FRX-AT-04447019 (PowerPoint
presentation explaining the impact of the DRA on Authorized Generics).
Response: Admitted in part, denied in part. Plaintiffs admit that the members of the
team negotiating the Lexapro Amendment provided inputs and assumptions. Plaintiffs deny that
those assumptions were accurate and further assert that they were generated to try to rationalize
the Lexapro Amendment since the analyses were only finalized after Forest and Mylan reached
agreement in principle. See, e.g., Response to ¶¶ 213, 215. Plaintiffs therefore deny that any of
Forest’s best price projections were reasonable or accurate. The statement is further denied to
the extent that statements of what would be “key” assumptions necessarily involve questions of
credibility that cannot be characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. Additionally, DPPs offer no evidence to contest the fact stated, nor do they
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support the argument that Forest generated any analyses “to try to rationalize the Lexapro
Amendment.” DPPs merely speculate that this is the case because certain of the Lexapro
Amendment analyses were completed “after Forest and Mylan reached [an] agreement in
principle” but before the Lexapro Amendment was executed. This contention is not supported
by any record evidence and is nothing more than mere speculation that simply “cannot be
presented in a form that would be admissible in evidence.” Fed. R. Civ. P. 56(c). Furthermore,
DPPs’ response consists of improper argument and a recitation of different purported facts, but
no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
DPPs admit that “[i]t is standard practice in the prescription drug industry and at
publicly-traded companies generally, to prepare forecasts for planning purposes; forecasts
prepared by a company with experience in the market, after analysis of the relevant market
factors, particularly after the product has been on the market, are useful for predicting expected
outcomes. DRPAF ¶ 301.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
226. The assumptions incorporated in the Medicaid rebate liability analyses were based
upon Forest’s experience in the industry and reasonable expectations at the time of the analysis,
and included: (1) Lexapro financial planning and analysis forecasts, which included projected
Lexapro utilization and projected Lexapro pricing; (2) expected commercial contracting
discounts for Lexapro (which impacts the Lexapro best price discount); (3) expected Generic
Lexapro launch date of March 2012; (4) Forest’s expected costs of goods sold; (5) calculations
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of expected profit share payments from Mylan to Forest (for all forecasts post-dating January 14,
2010) which were calculated as part of the Lexapro Generic Analysis Forecast provided by
Robert Carnevale; and (6) expected quarterly change in customer price index, a component of
the best-price calculation.
Defendants’ Declaration: Ex. 123, Finchen Decl. ¶ 13; Ex. 366, Solomon (Nov. 15) Dep.
422:10-424:24.
Response: Denied. Plaintiffs deny that Forest’s assumptions were accurate and
further assert that they were generated to rationalize the Lexapro Amendment since many of the
analyses were only generated after Forest and Mylan reached agreement in principle. See, e.g.,
Response to ¶¶ 213, 215. Plaintiffs deny that the analyses represent accurate or reasonable
estimates of the enumerated topics. See Litvin Decl. Ex. 261, Bruno Report ¶ 87 (“In 2010,
Forest created a table summarizing the costs of Lexapro production with inputs that appeared
inflated and thus could not serve to justify the Lexapro deal with Mylan”); id. ¶ 88 (“There does
not appear to be a legitimate basis for Forest’s predictions”); id. ¶ 99; Litvin Decl. Ex. 262,
Bruno Reply Report ¶ 22 (“it is unclear for what purpose [the projections] were produced or the
reasonableness of the underlying assumptions.”); O’Shaughnessy Decl. Ex. 55, Berndt Reply
Report ¶ 38 (“unlike the forecasts that Forest prepared in 2012-13 in connection with the launch
of Namenda XR, I conclude that the unsupported Lexapro forecasts conducted in 2010 are based
on unreasonable and implausible assumptions about the impact that would result from a large
number of generic entrants under the circumstances of the generic Lexapro launch.”); id. ¶ 36,
37, 42 and Ex. F.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. Additionally, DPPs offer no evidence to support the argument that Forest
generated any analyses “to try to rationalize the Lexapro Amendment.” DPPs merely speculate
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that this is the case because certain of the Lexapro Amendment analyses were completed “after
Forest and Mylan reached [an] agreement in principle” but before the Lexapro Amendment was
executed. This contention is not supported by any record evidence and is nothing more than
mere speculation that simply “cannot be presented in a form that would be admissible in
evidence.” Fed. R. Civ. P. 56(c). Furthermore, DPPs’ response consists of improper argument
and a recitation of different purported facts, but no evidentiary basis to contest the statement.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
DPPs admit that “[i]t is standard practice in the prescription drug industry and at
publicly-traded companies generally, to prepare forecasts for planning purposes; forecasts
prepared by a company with experience in the market, after analysis of the relevant market
factors, particularly after the product has been on the market, are useful for predicting expected
outcomes. DRPAF ¶ 301.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
227. In each case, Forest estimated that it would save at least $20 million in Medicaid
rebate liability under Scenario 2 as compared to Scenario 1.
Defendants’ Declaration: Ex. 123, Finchen Decl. ¶ 14; Ex. 366, Solomon (Nov. 15) Dep.
416:13-418:11.
Response: Denied. Plaintiffs deny that Forest’s assumptions were accurate and
further assert that they were generated to try to rationalize the Lexapro Amendment since many
of the analyses were only generated after Forest and Mylan reached agreement in principle. See,
e.g., Response to ¶¶ 213, 215. Plaintiffs therefore deny that any of Forest’s best price projections
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were reasonable or accurate. Plaintiffs deny that it is appropriate to attribute the entirety of any
Medicaid rebate savings to the Lexapro Amendment since those same savings could be achieved
for less than the reverse payment amount, which would also affect Mr. Green’s net present value
analysis. See O’Shaughnessy Decl. Ex. 122 at ¶¶ 4, 23-24 (Elhauge Reply Report).
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. Additionally, DPPs offer no evidence to support the argument that Forest
generated any analyses “to try to rationalize the Lexapro Amendment.” DPPs merely speculate
that this is the case because certain of the Lexapro Amendment analyses were completed “after
Forest and Mylan reached [an] agreement in principle” but before the Lexapro Amendment was
executed. This contention is not supported by any record evidence and is nothing more than
mere speculation that simply “cannot be presented in a form that would be admissible in
evidence.” Fed. R. Civ. P. 56(c). More importantly, DPPs cite no evidence to dispute that in
each of the Medicaid rebate liability analyses Forest estimated that it would save at least $20
million in Medicaid rebate liability under Scenario 2 as compared to Scenario 1. Rather, DPPs’
response consists of improper argument and a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
228. Since the Scenario 1 transfer price to Mylan would reflect the lowest price Forest
offered to a commercial customer during the first quarter of 2012, it would be considered the
Best Price for the entire quarter, even though that price was not available until February.
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Defendants’ Evidence: Ex. 72, Bonelli Rep., ¶ 17 (“In general, Best Price reflects the
lowest price available from a manufacturer to any commercial customer in the United
States within an individual calendar quarter, even if that price was not available for the
duration of the quarter.”).
Response: Admitted in part, denied in part. Plaintiffs admit that Forest’s best price
under the Original Lexapro Agreement would reflect the lowest price Forest sold to a
commercial customer during the first quarter of 2012. Plaintiffs deny that Forest’s assumptions
were accurate and further assert that they were generated to try to rationalize the Lexapro
Amendment since many of the analyses were only generated after Forest and Mylan reached
agreement in principle. See, e.g., Response to ¶¶ 213, 215. Plaintiffs therefore deny that any of
Forest’s best price projections were reasonable or accurate. Plaintiffs deny that it is appropriate
to attribute the entirety of any Medicaid rebate savings to the Lexapro Amendment since those
same savings could be achieved for less than the reverse payment amount, which would also
affect Mr. Green’s net present value analysis. See O’Shaughnessy Decl. Ex. 122 at ¶¶ 4, 23-24
(Elhauge Reply Report).
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. Additionally, DPPs offer no evidence to support the argument that Forest
generated any analyses “to try to rationalize the Lexapro Amendment.” DPPs merely speculate
that this is the case because certain of the Lexapro Amendment analyses were completed “after
Forest and Mylan reached [an] agreement in principle” but before the Lexapro Amendment was
executed. This contention is not supported by any record evidence and is nothing more than
mere speculation that simply “cannot be presented in a form that would be admissible in
evidence.” Fed. R. Civ. P. 56(c). Furthermore, DPPs’ response consists of improper argument
and a recitation of different purported facts, but no evidentiary basis to contest the statement.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs’ response merely attempts to
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“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
DPPs admit the simple proposition stated in this paragraph—that the lowest price in a
quarter becomes the applicable “best price.”
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
229. Therefore, the reduction in Medicaid liability between Scenario 1 and Scenario 2
is the largest in the first quarter of 2012 because the transfer price offered to Mylan in February
2012 would be applied to the entire pre-loss-of-exclusivity-volume of brand Lexapro sales to
Medicaid patients.
Defendants’ Evidence: Ex. 72, Bonelli Rep. ¶ 17; Ex. 73, FRX-AT-04617599 at 603
(“[B]ecause the manufacturing agreement is slated to begin two weeks prior to LOE of
Lexapro (i.e., in late February/early March 2012), the combination of higher Medicaid
sales (because the brand share of the generic + brand total will still be high) and the very
low Best Price during Q1 CY2012 will cause most of the liability resulting from this deal
to occur that quarter.”); Ex. 80, FRX-AT-04617768 (March 2010 Medicaid Liability
Forecast predicts more than $18,000,000 of the total $30,437,000 in savings will be
realized in the first quarter of 2012).
Response: Admitted in part, denied in part. Plaintiffs admit that Forest’s Medicaid
liability would be largest in the first quarter of 2012. Plaintiffs deny that Forest could
appropriately evade that liability by entering the Lexapro Amendment. See Responses to ¶¶
202-207. Plaintiffs deny that it is appropriate to attribute the entirety of any Medicaid rebate
savings to the Lexapro Amendment since those same savings could be achieved for less than the
reverse payment amount, which would also affect Mr. Green’s net present value analysis. See
O’Shaughnessy Decl. Ex. 122 at ¶¶ 4, 23-24 (Elhauge Reply Report).
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
202-207 herein. DPPs’ response consists of improper argument or a recitation of different
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purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). In the second sentence of their response, DPPs have admitted the
fact Forest actually set forth and have drafted a denial that merely advances their legal argument
that Forest “[in]appropriately evade[d]” Medicaid liability. Beyond the fact that this legal
argument inappropriately appears in a Rule 56.1 statement of fact, DPPs cite to no legal authority
or record evidence establishing that Forest did not pay the exact amount of Medicaid rebate
liability it owed. DPPs’ response merely attempts to “contextualize or dispute the relevance of
the statement,” but does not challenge any aspect of the statement itself, which is an improper
use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
230. Because Forest pays reimbursement to Medicaid for Medicaid patients’ purchase
of brand-Lexapro only (under Scenario 1 or Scenario 2), the potential Medicaid liability savings
Forest predicted declines after the first quarter of 2012 because Forest expected brand Lexapro to
lose sales to generic entrants.
Defendants’ Evidence: Ex. 80, FRX-AT-04617768.
Response: Admitted in part, denied in part. Plaintiffs admit that Forest’s Medicaid
liability would be largest in the first quarter of 2012 and declines thereafter. Plaintiffs deny that
Forest could appropriately evade that liability by entering the Lexapro Amendment. See
Responses to ¶¶ 202-207. Plaintiffs deny that it is appropriate to attribute the entirety of any
Medicaid rebate savings to the Lexapro Amendment since those same savings could be achieved
for less than the reverse payment amount, which would also affect Mr. Green’s net present value
analysis. See O’Shaughnessy Decl. Ex. 122 at ¶¶ 4, 23-24 (Elhauge Reply Report).
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
202-207 herein. Further, DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). In the second sentence of their response, DPPs have
admitted the fact Forest actually set forth and have drafted a denial that merely advances their
legal argument that Forest “[in]appropriately evade[d]” Medicaid liability. Beyond the fact that
this legal argument inappropriately appears in a Rule 56.1 statement, DPPs cite to no legal
authority or record evidence establishing that Forest did not pay the exact amount of Medicaid
rebate liability it owed. DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
231. Ultimately, Forest’s analysis estimated that, over nine quarters, Forest would owe
$60,458,000 under Scenario 1 compared to $30,021,000 under Scenario 2.
Defendants’ Evidence: Ex. 80, FRX-AT-04617768.
Response: Admitted in part, denied in part. Plaintiffs admit that documents were
prepared. Plaintiffs deny that those documents were accurate and assert that Forest’s analysts
conceded that they were inaccurate. See, e.g., Response to ¶¶ 213, 215, 222. Plaintiffs further
assert that they were generated to try to rationalize the Lexapro Amendment since the analyses
were only finalized after Forest and Mylan reached agreement in principle. Id. Plaintiffs
therefore deny that any of Forest’s best price projections were reasonable or accurate. Plaintiffs
deny that it is appropriate to attribute the entirety of any Medicaid rebate savings to the Lexapro
Amendment since those same savings could be achieved for less than the reverse payment
amount, which would also affect Mr. Green’s net present value analysis. See O’Shaughnessy
Decl. Ex. 122 at ¶¶ 4, 23-24 (Elhauge Reply Report). The statement is further denied as it does
not identify which analysis it is referring to.
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Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
213, 215, and 222 herein. Further, DPPs offer no evidence to support the argument that Forest
generated any analyses “to try to rationalize the Lexapro Amendment.” DPPs merely speculate
that this is the case because certain of the Lexapro Amendment analyses were completed “after
Forest and Mylan reached [an] agreement in principle” but before the Lexapro Amendment was
executed. This contention is not supported by any record evidence and is nothing more than
mere speculation that simply “cannot be presented in a form that would be admissible in
evidence.” Fed. R. Civ. P. 56(c). Furthermore, DPPs’ response consists of improper argument
and a recitation of different purported facts, but no evidentiary basis to contest the statement.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
232. Thus, Forest expected that it would save $30,437,000, over nine quarters,
($18,363,000 of which would be saved in the first quarter alone, and $26,467,000 of which
would be saved over the first five quarters), if it amended the Original Lexapro Agreement to
require Mylan to manufacture Generic Lexapro.
Defendants’ Evidence: Ex. 80, FRX-AT-04617768; Ex. 123, Finchen Decl. ¶ 15; Ex. 69,
Green Rep., ¶¶ 73-74.
Response: Admitted in part, denied in part. Plaintiffs admit that documents were
prepared. Plaintiffs deny that those documents or any purported analysis reflected in such
documents was accurate and assert that Forest’s analysts conceded that they were inaccurate.
See, e.g., Response to ¶¶ 213, 215. Plaintiffs further assert that they were generated to try to
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rationalize the Lexapro Amendment since the analyses were only finalized after Forest and
Mylan reached agreement in principle. Id. Plaintiffs therefore deny that any of Forest’s best
price projections were reasonable or accurate. Plaintiffs deny that it is appropriate to attribute
the entirety of any Medicaid rebate savings to the Lexapro Amendment since those same savings
could be achieved for less than the reverse payment amount, which would also affect Mr.
Green’s net present value analysis. See O’Shaughnessy Decl. Ex. 122 at ¶¶ 4, 23-24 (Elhauge
Reply Report). The statement is further denied to the extent that statements of a subjective basis
for an expectation necessarily involve questions of credibility that cannot be characterized as an
undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 213
and 215 herein. DPPs offer no evidence to support the argument that Forest generated any
analyses “to try to rationalize the Lexapro Amendment.” DPPs merely speculate that this is the
case because certain of the Lexapro Amendment analyses were completed “after Forest and
Mylan reached [an] agreement in principle” but before the Lexapro Amendment was executed.
This contention is not supported by any record evidence and is nothing more than mere
speculation that simply “cannot be presented in a form that would be admissible in evidence.”
Fed. R. Civ. P. 56(c). Furthermore, DPPs’ response consists of improper argument and a
recitation of different purported facts, but no evidentiary basis to contest the statement. SESAC,
1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
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233. Plaintiffs’ expert James Bruno conceded that in order to reduce the Medicaid best
price liabilities someone other than Forest had to manufacture the Generic Lexapro.
Plaintiffs’ Admissions: Ex. 337, Bruno Dep. 336:13-337:2 (“Q. You understand that in
order to reduce the Medicaid best price liabilities, someone other than Forest had to
manufacture the authorized generic for Lexapro, correct? ... A. I understand that for
Forest there would have been an interest to move the manufacturing out of a Forest
manufacturing facility. Q. Into someone that isn’t Forest to manufacture the drug, right?
A. Correct. A non-Forest facility is what I said.”).
Response: Denied to the extent that Defendants suggest that Mr. Bruno testified that
Mylan was required to manufacture authorized generic Lexapro in order for Forest to receive
purported Medicaid savings. Instead, Mr. Bruno testified that there were “a number companies
that could have manufactured and done exactly the same thing that Mylan did, and I believe that
there are many companies, including a contract manufacturer, who could have entered into the
agreement without paying the $20 million and the additional [royalty] payment.” O’Shaughnessy
Decl. Ex. 337, Bruno Dep. 337:6-14. Plaintiffs deny that Forest could appropriately evade
Medicaid liability by entering the Lexapro Amendment.
Forest’s Objection: DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Nowhere in ¶ 233 has Forest indicated that Mr. Bruno admitted anything with respect to Mylan.
Rather, the fact explicitly refers to any company “other than Forest.” DPPs go on to deny
something that does not appear in ¶ 233: “that Forest could appropriately evade Medicaid
liability by entering the Lexapro Amendment.” This response is improper argument and a
recitation of different purported facts, but provides no evidentiary basis to contest the statement.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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234. Plaintiffs’ expert James Bruno did not dispute whether the amount that Forest
would save in Medicaid best price liabilities was reasonable at the time Forest calculated it.
Plaintiffs’ Admissions: Ex. 337, Bruno Dep. 339:14-340:11 (“Q. Again, you are not
disputing whether the $26.5 million figure that Mr. Green relies on his report, you aren’t
disputing whether that future was reasonable at the time that Forest estimated it, correct?
A. To the best of my knowledge, that number and how he calculated it, I didn’t dispute
the number.”).
Response: Denied. Mr. Bruno did not endorse or dispute “whether the amount that
Forest would save in Medicaid best price liabilities was reasonable at the time Forest calculated
it.” Mr. Bruno, in the cited testimony, merely said that he “didn’t dispute the number” because
the question was irrelevant to his point that Forest could have obtained the Medicaid rebate
savings by entering into a deal with a third party other than Mylan. Ex. 337, Bruno Dep. 339:14-
340:2. Plaintiffs deny that Forest could appropriately evade Medicaid liability by entering the
Lexapro Amendment.
Forest’s Objection: DPPs admit that Mr. Bruno did not dispute that the $26.5 million in
saved Medicaid best price liabilities from Mr. Green’s report was reasonable at the time that
Forest estimated it, and similarly admit that he did not dispute how that figure was calculated.
Accordingly, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. DPPs go on to
deny a fact that, again does not appear in ¶ 234: “that Forest could appropriately evade Medicaid
liability by entering the Lexapro Amendment.” This response is improper argument and a
recitation of different purported facts, but provides no evidentiary basis to contest the statement.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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235. None of Plaintiffs’ experts dispute that Forest’s expectation was that it was going
to receive $26.5 million in Medicaid savings from the Lexapro Amendment.
Plaintiffs’ Admissions: Ex. 337, Bruno Dep. 337:15-22 (indicating he is not disputing
Forest’s expectation to receive the benefit of lower Medicaid liability under the Lexapro
Amendment); Ex. 368, Elhauge (Nov. 10) Dep. 262:1-9 (agreeing that the effect of
moving manufacturing responsibilities to Mylan was to lower Forest’s Medicaid
payments); Ex. 122, Elhauge Rep. II, ¶ 22-23 (agreeing the Lexapro Agreement resulted
in lower Medicaid liability to Forest).
Response: Denied. The evidence Defendants cite does not support their contention
and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002)
(Rule 56 “places the initial burden on the moving party to identify ‘those portions of the
‘pleadings, depositions, answers to interrogatories, and admissions on file, together with
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Defendants misstate the
testimony. Mr. Bruno’s deposition on page 337:15-22 does not indicate that he is not disputing
Forest’s expectation to receive the benefit of lower Medicaid liability under the Lexapro
Amendment, it merely indicates that Mr. Bruno understood that if Forest had entered into a
manufacturing agreement with another company, it would still get the benefit of reduced price
liabilities. Ex. 337, Bruno Dep. 339:14-340:2. In his cited testimony and report, Professor
Elhauge does not testify or offer an opinion about whether Forest had an “expectation ... that it
was going to receive $26.5 million in Medicaid savings from the Lexapro Amendment.” Nor did
Professor Elhauge “agree” that Forest lowered its Medicaid liability via the Lexapro
Amendment. Instead, his opinion is that it is inappropriate to attribute the entirety of any
Medicaid rebate savings to the Lexapro Amendment since those same savings could be achieved
for less than the reverse payment amount. See O’Shaughnessy Decl. Ex. 122 at ¶¶ 4, 23-24
(Elhauge Reply Report) (opining that only 2.8% of the Medicaid savings would be attributable to
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the Lexapro Amendment had it been a freestanding deal, not tied to the Namenda settlement.).
Forest’s Objection: DPPs cite to Professor Elhauge’s Reply Report for the proposition
that only 2.8% of the Medicaid savings Forest projected it would receive would have been
attributable to the Lexapro Amendment. However, this proposition is not found in Professor
Elhauge’s report. He merely opines that because, in his opinion, “Mylan obtained 2.8% of the
gains from settlement,” it might also have needed to pay only 2.8% of the reduced liabilities
from the Lexapro Amendment “in order to secure Mylan’s agreement.” O’Shaugnessy Decl. I
Ex. 122 at ¶ 4, 23-24. In any event, the opinions cited by DPPs do not dispute Mr. Green’s
calculation (indeed, Prof. Elhauge relies on it in the cited portions of his report). Thus, DPPs
have not cited any evidence to dispute the statement in ¶ 235.
DPPs’ response consists only of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
Forest’s Projected Earnings Under a Possible Lexapro ii.
Amendment with Mylan
236. Prior to executing the Lexapro Amendment, Forest prepared several analyses that
forecasted the financial impact of potentially amending the Original Lexapro Agreement in three
important ways: (1) amending the fixed 40% profit share to a graduated scale, providing for
Forest’s share of product profit to be 30% as to the first $100 million of cumulative product
profit, 35% with respect to the next $50 million in cumulative product profit, and 40% with
respect to cumulative product profit in excess of $150 million; (2) extending the minimum term
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of the Original Lexapro Agreement from one to two years; and (3) shifting manufacturing
responsibilities to Mylan.
Defendants’ Evidence: Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex.
124, FRX-AT-04617128; Ex. 314, FRX-AT-04617111; Ex. 315, FRX-AT-04617112; Ex.
105 FRX-AT-04617116; Ex 106, FRX-AT-04617117; Ex. 107 FRX-AT-04617118; Ex.
99, FRX-AT-04340635; Ex. 108, FRX-AT-04340639; Ex. 109, FRX-AT-04617528; Ex.
110, FRX-AT-04617530; Ex. 111, FRX-AT-04617617; Ex. 112, FRX-AT-04617618;
Ex.113, FRX-AT-04617631; Ex. 114, FRX-AT-04617633; Ex. 89, FRX-AT-04617640;
Ex.115, FRX-AT-04617643; Ex. 116, FRX-AT-04617654; Ex. 117, FRX-AT-04617657;
Ex. 118, FRX-AT-04617658.
Response: Denied. Plaintiffs deny any suggestion that, before the parties reached
agreement in principle on the Lexapro Amendment, Forest prepared any bona fide analyses that
forecasted the financial impact of the Lexapro Amendment by amending the profit share to a
graduated scale or by extending the minimum term from one to two years. Of the exhibits listed,
only numbers 104 and 107 reflect a two year minimum term or a graduated royalty rate. Those
documents’ metadata shows that they were generated between March 15-17, 2010, which is the
day of, and two days after, the settlement in principle. Thus, the analyses of adding a second
year and of a graduated royalty were not performed “prior” to the settlement in principle, which
has identical terms with respect to the royalty and minimum term provisions as the final
agreement. See Response to ¶ 215.
Forest’s Objection: Forest fully incorporates its response to ¶ 215 herein, and notes that
the suggestion that Forest did not prepare “any bona fide analyses” is not supported by citations
to any evidence. Therefore, the fact should be admitted. Durant v. A.C.S. State & Local Sols.,
Inc., 460 F. Supp. 2d 492, 494 (S.D.N.Y. 2006).
237. Robert Carnevale, a member of Forest’s Alliance Management Group, prepared
several analyses forecasting Forest’s potential earnings under the Original Lexapro Agreement as
well as the contemplated Lexapro Amendment the input of several other Forest employees.
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Defendants’ Evidence: Ex. 332, Carnevale Dep. 9:8-10:3, 110:17-113:15, 116:25-
117:24, 119:6-13, 122:22-125:14 (noting that between January and when the Lexapro
Amendment was actually signed, there were multiple analyses done to assess whether an
amendment would be valuable to Forest and that several different groups decided which
assumptions should be incorporated in the Lexapro Sales Forecasts).
Response: Admitted in part, denied in part. Mr. Carnevale testified that there were
iterations of the analyses prepared and that he is a Forest employee. Denied in all other respects.
All analyses Defendants have cited herein were performed on only the following dates: 1/7/10,
1/13-16/10, 1/19-20/10, and 3/15-17/10. Thus, Plaintiffs deny any implication that Forest
performed any analyses after March, 2010. Plaintiffs also deny the accuracy of, and intention
behind, the analyses. See Responses to ¶¶ 213, 215, 217, 222 and 223. Finally, the statement is
further denied to the extent that statements of a subjective basis why such a document may have
been prepared act necessarily involve questions of credibility that cannot be characterized as an
undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
213, 215, 217, 222, and 223 herein. Additionally, DPPs’ response consists of improper argument
or a recitation of different purported facts, but no evidentiary basis to contest the statement.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely
attempts to “contextualize or dispute the relevance of the statement,” but does not challenge any
aspect of the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. DPPs’ admit the only fact asserted—that Mr.
Carnevale prepared several analyses.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
238. There is no evidence in the record suggesting that Forest’s projections for either
the profit share or the best price savings are a sham.
Defendants’ Evidence: Ex. 338, Green Dep. 249:18-250:12.
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Plaintiffs’ Admission: Ex. 349, Berndt Dep. 279:7-15.
Response: Denied. Defendants misrepresent Dr. Berndt’s testimony who merely
testified that he was not offering a legal opinion regarding whether Forest’s forecasts were
“made fraudulently.” He responded “I’m not making such an allegation. I’m not a lawyer.”
O’Shaughnessy Decl. Ex. 349, Berndt Dep. 279:14-15. Dr. Berndt’s opinion on the matter is also
necessarily limited only to the documents he reviewed. Moreover, Defendants rely only on the
self-serving opinion of their own expert witness as “proof” of this assertion, but Defendants
controlled which evidence they showed Mr. Green. The evidence Defendants cite does not
support their contention and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d
162, 165 (2d Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those
portions of the ‘pleadings, depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any, which it believes demonstrate the absence of a genuine issue of
material fact.”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). See Response to ¶
215.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶ 215
herein. Additionally, DPPs cite no evidence to support their speculation that the Forest
projections were a sham. Rather, DPPs’ response consists of nothing more than unsupported
argument, which is insufficient to create a dispute of material fact. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2).
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
a. Impact of Amending the Fixed 40% Profit Share to a Graduate
Profit Share Scale
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239. Forest expected that, under a potential Lexapro Amendment, Generic Lexapro
cumulative product profits would total $429.4 million in the first full year after launch, and
Forest’s profit share would be $159.2 million.
Defendants’ Evidence: Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex.
69, Green Rep., ¶ 50.
Response: Denied as to any suggestion that Forest’s projections and forecasts were
reasonable at the time they were generated. See Response to ¶ 215. The statement is further
denied to the extent that statements of a subjective basis for an expectation necessarily involve
questions of credibility that cannot be characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶ 215
herein. DPPs cite nothing to contest the figures cited herein. DPPs’ response consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
240. Notably, Forest expected that from March 2012 to May 2012, the cumulative
product profit would be $172.9 million, and thus expected to receive a 40% profit share just a
few months after the launch of Generic Lexapro.
Defendants’ Evidence: Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex.
69, Green Rep., ¶ 50.
Response: Denied as to any suggestion that Forest’s projections and forecasts were
reasonable at the time they were generated. See Response to ¶ 215. The statement is further
denied to the extent that statements of a subjective basis for an expectation necessarily involve
questions of credibility that cannot be characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶ 215
herein. DPPs cite nothing to contest the figures cited herein. DPPs’ response consists of
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improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2).
241. Assuming, as Forest expected, that the $150 million product profit threshold
would be reached, the Lexapro Amendment would require Forest to be paid a 35% profit share
instead of a 40% share, which represents a $2.5 million reduction in Forest’s expected profit
share payments.
Defendants’ Evidence: Ex. 69, Green Rep. at ¶¶ 51-52.
Response: Admitted in part, denied in part. Plaintiffs admit that for product profit
between $100 million and $150 million, the Lexapro Amendment lowered the royalty Mylan
would have to pay Forest from 40% to 35%, which represented a $2.5 million reduction in
Mylan’s royalty obligations. The statement is further denied to the extent that statements of a
subjective basis for an expectation necessarily involve questions of credibility that cannot be
characterized as an undisputed fact.
Forest’s Objection: DPPs’ response consists of no evidentiary basis to contest the
statement. In fact, DPPs have admitted the fact as it is set forth in ¶ 241, and have cited nothing
to suggest that simple math is “subjective” and “involve[s] questions of credibility.”
Accordingly, the fact should be deemed admitted without qualification. SESAC, 1 F. Supp. 3d at
186 n.3; Fed. R. Civ. P. 56(e)(2).
242. Assuming, as Forest expected, that the $100 million threshold would be reached,
the Lexapro Amendment would require Forest to be paid a 30% profit share instead of a 40%
share, which represents a $10 million reduction in Forest’s expected profit share payments.
Defendants’ Evidence: Ex. 69, Green Rep. at ¶¶ 51-52.
Response: Admitted in part, denied in part. Plaintiffs admit that for product profit
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between $0 and $100 million, the Lexapro Amendment lowered the royalty Mylan would have to
pay Forest from 40% to 30%, which represented a $10 million reduction in Mylan’s royalty
obligations. The statement is further denied to the extent that statements of a subjective basis for
an expectation necessarily involve questions of credibility that cannot be characterized as an
undisputed fact.
Forest’s Objection: DPPs’ response consists of no evidentiary basis to contest the
statement. In fact, DPPs have admitted the fact as it is set forth in ¶ 242, and have cited nothing
to suggest that simple math is “subjective” and “involve[s] questions of credibility.”
Accordingly, the fact should be deemed admitted without qualification. SESAC, 1 F. Supp. 3d at
186 n.3; Fed. R. Civ. P. 56(e)(2).
243. Thus, an amendment to the Original Lexapro Agreement that changed the profit
share percentage payable to Forest from a fixed 40% to the graduated scheme described above
represented a maximum reduction of Forest’s profit share payments of $12.5 million.
Defendants’ Evidence: Ex. 69, Green Report at ¶¶ 52-53.
Response: Admitted in part, denied in part. Plaintiffs admit that in the Lexapro
Amendment, Forest agreed to forego $12.5 million in royalties to which they were entitled under
the Original Lexapro Agreement, and conferred that $12.5 million to Mylan.
Forest’s Objection: DPPs’ response consists of no evidentiary basis to contest the
statement. In fact, DPPs have admitted the fact as it is set forth in ¶ 243, and do not explain any
basis for their denial in part, nor which part of the fact is being denied. Accordingly, the fact
should be deemed admitted without qualification. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
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244. Any product profits exceeding $150 million would be subject to the same 40%
profit share percentages contemplated under the Original Lexapro Agreement, so the change in
profit share percentage would not affect those revenues.
Defendants’ Evidence: Ex. 69, Green Report at ¶¶ 51-52.
Response: Admitted.
b. Impact of Extending The Minimum Term Of The Original
Lexapro Agreement From One To Two Years
245. Despite the fact that an adjustment to the profit share payments would potentially
decrease Forest’s profits under an amended agreement, Forest expected that the extension of the
minimum term of the agreement from one to two years represented the opportunity to offset the
reduction of the profit share income.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 100:10-101:3, 103:14-106:24;
Ex. 366, Solomon (Nov. 15) Dep. 424:25-426-21; Ex. 69, Green Rep. ¶¶ 55, 59
(indicating Forest expected to gain $21.1 million in net profit share from a second year
extension, which is greater than the $12.5 million from the reduced profit share
percentages); Ex. 338, Green Dep.76:2-13 (“Q. Okay. So you are saying the 12 and a
half million dollar reduced payment that Forest would receive in year one would be offset
by the expected profit-share payments in year two? A. Yes. In doing any analysis of
fairness, one would take a look at the expectations of the parties at the time the deal was
done, and at the time Forest’s projections indicated that it was expecting to have profit-
share payments in the second year that would offset the reduced profit-share payments in
the first.”); Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132.
Response: Denied. Forest’s assumption is that under the Original Lexapro
Agreement, Mylan would have terminated after year one and thus Mylan would not pay, and
Forest would not receive, any royalties in the second year. However, Forest does not cite any
contemporaneous document supporting the notion that anybody at Forest thought that Mylan
would opt-out. Instead, Forest relies exclusively on the self-serving testimony of Mr. Solomon
(as does Mr. Green). Moreover, the forecasts Forest cites (O’Shaughnessy Decl. Exs. 104 and
127) were generated on March 17, 2010 and March 16, 2010, the days following Forest’s and
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Mylan’s joint representation to the patent court that they had reached a settlement-in-principle.
Litvin Decl. Ex. 437, FRX-AT-04579626 (March 16, 2010 joint letter from Mylan and Forest
informing Judge Sleet that the day before (March 15), the parties reached an agreement-in-
principle.). Thus, these materials cannot support the assertion that Forest weighed the impact of
Mylan opting out after one year before having reached agreement with Mylan. Moreover, all of
the January 2010 forecasts and all of the March 2010 forecasts contain an explicit assumption
that Mylan would remain in the contract for the full five-year term. See, e.g., O’Shaughnessy
Decl. Ex. 127 (forecast with a metadata date of 3/16/2010, listing under key assumption number
5 that “Mylan Share of Generic” would be “40% year 2 onward.”) (emphasis added.);
O’Shaughnessy Decl. Ex. 117 (forecast attached to a 1/19/2010 email); (O’Shaughnessy Decl.
Ex. 116), listing under key assumption number 6, that “Mylan Share of Generic” would be “50%
September 13th onward.”) (emphasis added.).
Forest’s assertion also rests on completely faulty sales projections and assumptions that
the product would still be profitable after year one, and that, correspondingly, Mylan would
benefit from opting out after year one so that it would not have to pay royalties in year two.
First, Mylan was aware contemporaneously with its execution of the Lexapro Amendment that
authorized generic Lexapro would barely break even in year two, as contrasted to Forest’s
unreasonable assumptions of huge profitability in year two. See Litvin Decl. Ex. 237,
MYLMEMA_003597 at 3601 (August 18, 2010 Mylan Escitalopram Oxalate Tablets Launch
Project Team presentation modeling volume, sales, and profit assumptions for authorized generic
Lexapro). Second, Plaintiffs’ experts have contested the year two sales forecasts as unreasonable
and unrealistic such that Forest should not have expected authorized generic Lexapro to be
profitable in year two. See Litvin Decl. Ex. 262, Bruno Reply Report ¶ 24 (“By entering a deal
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for a second year if the data suggested what Mr. Green claims it suggested, Mylan would have
expected to lose most of its profits.”); id. ¶ 23 (“Based on my decades of experience in the
pharmaceutical industry... there is no basis to assume that a drug product with more than 10
competitors would continue to be profitable 12 months after generic entry”); id. ¶¶ 19-23;
O’Shaughnessy Decl. Ex. 55 at ¶ 38 (Berndt Reply Report) (“As of January 1, 2010, Forest was
aware of 14 entities that had received Tentative Approval for generic Lexapro from the U.S.
Food and Drug Administration. Moreover, Forest was aware that Teva would enjoy First to File
Exclusivity. Knowledgeable industry observers would plausibly have expected that during the
180-day exclusivity period, price competition between Mylan and the generic titan Teva would
be very intense, particularly when First Filer Teva had long been aware that Mylan would have a
two week launch advantage that Teva would need to overcome competitively. Given these facts,
along with the knowledge that brand manufacturer Forest’s sales vulnerable to generic entry was
more than $2.7 billion annually, any reasonable estimate of generic penetration and generic
pricing would consider that there would be multiple additional generic entrants as of the end of
the First to File exclusivity period – which would reasonably be expected to substantially reduce
each generic’s expected market share and the expected pricing.”); id. ¶ 41 (“the assumptions
reflected in the Forest documents that Mr. Green uncritically relied upon were completely at
odds with the contemporaneous literature that would underlie any reasonable analysis of
expected market share, generic pricing, and anticipated profit from the AG.”); id. ¶¶ 36-59;
O’Shaughnessy Decl. Ex. 122 at ¶¶ 3, 16-21 (Elhauge Reply Report); O’Shaughnessy Decl. Ex.
69 (Green Exhibit G) (demonstrating that the product was unprofitable even before the end of
year one).
Plaintiffs have contested the year two sales forecasts as post-hoc justifications for the
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Lexapro Amendment. See Response to ¶ 215.
The statement is further denied to the extent that it assumes a fact concerning an impact
on Forest’s profits that cannot be characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶ 215
herein. Moreover, DPPs’ cited evidence does not dispute the fact and is largely inadmissible.
DPPs’ admit that Forest’s forecasts were “used to prepare a Forest representative for a meeting
with Mylan.” DRPAF ¶ 227. The argument that O’Shaughnessy Decl. I Exs. 117 and 127
“contain an explicit assumption that Mylan would remain in the contract for the full five-year
term” merely because they both include the word “onward” is rank speculation, which cannot
create a genuine issue of material fact. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir.
2005) (“The law is well established that conclusory statements, conjecture, or speculation are
inadequate to defeat a motion for summary judgment.”) (internal quotation marks omitted).
Nothing about the word “onward,” which simply means “ahead,” connotes a “five-year term” as
DPPs state. Moreover, O’Shaughnessy Decl. I Ex. 117—which modeled the Lexapro
Agreement, in January 2010—contained a one-year minimum term and forecast profits and sales
for only one year. O’Shaughnessy Decl. I Ex. 127, which was created on March 16, 2010 and
modeled the Lexapro Amendment that contained a two-year minimum term, forecast profits and
sales for only two years.
None of the other evidence cited by DPPs indicates that, at the time Forest entered into
the Lexapro Amendment, it did not expect that the extension of the minimum term of the
agreement from one to two years represented the opportunity to offset the reduction of the profit
share income. Litvin Decl. Ex. 237 is a Mylan document, not a Forest document, created after
the Lexapro Amendment was signed, and DPPs cite no evidence to suggest that these post-hoc
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calculations were even shown to Forest. DPPs misleadingly call this evidence
“contemporaneous” but suggest that Forest forecasts created in March during the negotiations
must be presumed fraudulent. See DRSUF ¶¶ 213, 215 (Plaintiffs’ Response).
The citations to Mr. Bruno’s reply report are even more puzzling as Mr. Bruno
abandoned the contention in his report that “there is no basis to assume that a drug product with
more than 10 competitors would continue to be profitable 12 months after generic entry.” Litvin
Decl. Ex. 262, Bruno Reply Rep. ¶ 23. During his deposition, he stated “what I said, that it is
possible after all the generics enter the market, a product may not be profitable. I didn’t say
Lexapro. Q. So it would have been reasonable for Forest to believe that Lexapro authorized
generic would have been profitable even 12 months after generic entry? . . . A. It would have
been reasonable for Forest to have still felt that they were going to get some financial gain or
some net profit from the product . . . .” O’Shaughnessy Decl. II Ex. 378, Bruno Dep. 129:3-
130:9. Similarly, the assertion by Dr. Berndt that “Knowledgeable industry observers” would
have expected “very intense” pricing between Teva and Mylan during the 180-day exclusivity
period is not supported by anything other than his own ipse dixit, which is an insufficient basis
for expert testimony. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997). This opinion always
was directly contradicted by an industry observer, who in June 2012 argued that Teva and
Mylan’s discounting was “way higher than anyone would expect from two normally ‘rational’
generic co’s in a 2-player market.” O’Shaughnessy Decl. I Ex. 70 (Green Rep.) ¶ 67;
O’Shaughnessy Decl. I Ex. 16, FRX-AT-01897553.
In sum, DPPs have offered nothing to contest the sworn testimony of David Solomon that
Forest expected Mylan to terminate after year one under the Original Lexapro Agreement and
Forest’s forecasts which show a change in expectation from one year of profit share payments to
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two years. Thus, DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
246. Forest expected that under the Original Lexapro Agreement, Alphapharm/Mylan
would have terminated the agreement as soon as the one-year minimum term expired.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 103:14-106:24 (“Mylan’s
leverage as a large well established American generic company getting a head start being
able to get a big share, we felt that they were likely after the one-year expiration of the
original license to substitute their own product instead of continuing to sell ours and we
would lose our share of the value of the generic after that. And we wanted to extend that
for an additional period of time.”); Ex. 366, Solomon (Nov. 15) Dep. 424:25-426-21; Ex.
108, FRX-AT-04340639 (iteration of Lexapro Generic Analysis forecasting only one
year of authorized generic sales); Ex. 112, FRX-AT-04617618 (same); Ex. 115, FRX-
AT-04617643 (same); Ex. 118, FRX-AT-04617658 (same).
Response: Denied. See Response to ¶ 245. In addition, Plaintiffs deny that
O’Shaughnessy Decl. Exs. 108, 112, 115, and 118 forecast for only one year. Rather, they
contain explicit assumptions for generic pricing and Mylan share of generic that go beyond one
year. Nor is there any evidence that Forest created versions of these forecasts before their
settlement in principle with Mylan. The statement is further denied to the extent that statements
of a subjective basis for an expectation necessarily involve questions of credibility that cannot be
characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
187, 191, 215 and 245 herein. Further, O’Shaughnessy Decl. I Exs. 108, 112, 115, and 118
projects sales and profit on a monthly basis for only one year, and DPPs point to no evidence
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suggesting that Forest expected Alphapharm/Mylan not to terminate as soon as the one-year
minimum term expired, as David Solomon testified. O’Shaughnessy Decl. II Ex. 379, Solomon
(Nov. 15) Dep. 425:1-426:21. DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
247. Since Mylan could sell its own generic escitalopram product after Forest’s patent
expired in 2012 and avoid paying Forest a profit share, it would be financially and economically
rational for Mylan to cease selling Generic Lexapro under the Original Lexapro Agreement at the
end of a year.
Defendants’ Evidence: Ex. 366, Solomon (Nov. 15) Dep. 424:25-426-21; Ex. 69, Green
Rep. ¶ 55; Ex. 54, Fowdur Rep. ¶ 50; Ex. 338, Green Dep. 100:8-101:21 (“Q. Okay. But
the profit sharing in the original agreement continued throughout the term of the
agreement? It wasn’t just for the first year? A. To the extent that Mylan continued in the
agreement,... my understanding is that they would have been obligated to continue to
make payments after year one. However, the original agreement allowed Mylan to exit
the agreement after year one, and it would have been financially rational for them to do
that, because they wouldn’t have to make the profit sharing payments.”); Ex. 324,
Solomon (Sept. 7) Dep. 103:14-106:24 (“Mylan’s leverage as a large well established
American generic company getting a head start being able to get a big share, we felt that
they were likely after the one-year expiration of the original license to substitute their
own product instead of continuing to sell ours and we would lose our share of the value
of the generic after that. And we wanted to extend that for an additional period of
time.”).
Response: Admitted in part, denied in part. Plaintiffs admit that nothing in either the
Lexapro Amendment or the Original Lexapro Agreement prevented Alphapharm or Mylan from
manufacturing its own generic version of Lexapro without terminating either agreement. See
O’Shaughnessy Decl. Ex. 122 at n.14 (Elhauge Reply Report). Plaintiffs otherwise incorporate
their denials from Responses to ¶¶ 245 and 246, in particular those portions of those Responses
establishing that Forest had no reasonable basis to assume that there would be any profits to
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share after year one. Thus, Forest’s assertion that Mylan would have opted-out after year one so
that Mylan could continue selling generic Lexapro profitably while avoiding paying Forest a
royalty is flawed. This is particularly true since Forest’s expert Mr. Green recognizes that in less
than one year, Mylan began to accrue a “royalty debit” ... which “represents a claim against
future profit share payments to Forest.” O’Shaughnessy Decl. Ex. 69 at n.2 (Green Exhibit G).
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
187, 191, 245 and 246 herein. Specifically, Forest reiterates it prior objection to DPPs’
erroneous assertion that “nothing in either the Lexapro Amendment or the Original Lexapro
Agreement prevented Alphapharm or Mylan from manufacturing its own generic version of
Lexapro without terminating either agreement.” Pursuant to § 9.1 of the Original Lexapro
Agreement, Alphapharm was required to “maximize sales” of Generic Lexapro. See DRSUF ¶¶
187, 191.
Forest further objects to DPPs’ citation to O’Shaughnessy Decl. Ex. 69, because what
actually happened in the real world years after the Lexapro Amendment was signed is irrelevant
and inadmissible under Fed. R. Evid. 402, as such evidence has no bearing on what Forest and
Mylan reasonably estimated regarding the profitability of the Lexapro Amendment at the time
that the deal was negotiated and executed. DPPs’ expert, Prof. Elhauge condeded this point. See
Opp. at 30. In essence, DPPs’ response consists of nothing but improper argument or a recitation
of different purported facts, with no evidentiary basis to contest the statement. SESAC, 1 F.
Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
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Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
248. If the minimum term of the Original Lexapro Agreement were extended by a year,
Forest forecasted that the total product profits in the second year of the term would be $79.3
million, and that Forest would earn $21.1 million in net profit share (after paying a profit share to
Lundbeck).
Defendants’ Evidence: Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex.
69, Green Rep. ¶¶ 57-59.
Response: Denied. Plaintiffs incorporate their Responses to ¶¶ 245-247.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
245-247 herein. Forest further notes that in none of those responses do DPPs offer evidence to
dispute the fact that Forest forecasted that the total product profits in the second year of the term
would be $79.3 million, and that Forest would earn $21.1 million in net profit share (after paying
a profit share to Lundbeck), if the minimum term of the Original Lexapro Agreement were
extended by a year. Thus, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
249. Because Forest expected Mylan to terminate the Original Lexapro Agreement
after one year, Forest considered these increased profits to be all incremental and the result of the
Lexapro Amendment.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 103:14-106:24 (“The second
issue was that given that Mylan was a much more substantial generic company following
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the acquisition of Alphapharm than Alphapharm was by itself, we felt that the value of
that authorized generic would be meaningful and under the terms of our supply
arrangement with Mylan, the license with Mylan, Mylan would be the first one to enter
the market with a two-week head start and what that would mean is they ought to be able
to get a large share of the generic Lexapro market and so our view – and typically once a
company gets the share, suppliers won’t change unless they have a reason to change.
And so with Mylan’s leverage as a large well established American generic company
getting a head start being able to get a big share, we felt that they were likely after the
one-year expiration of the original license to substitute their own product instead of
continuing to sell ours and we would lose our share of the value of the generic after
that.”).
Response: Denied. Plaintiffs incorporate their Responses to ¶¶ 245-247. The
statement is further denied to the extent that statements of a subjective basis for an expectation
necessarily involve questions of credibility that cannot be characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
245-247 herein. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
250. The combined impact of the reduced profit share and the extension of the
minimum term of the Original Lexapro Agreement would result in at least an additional $8.6
million in net benefits for Forest ($21.1 million in increased profit share for year two, less $12.5
million in lower profit share payments due to the graduated profit share).
Defendants’ Evidence: Ex. 69, Green Rep. ¶ 65.
Response: Denied. Plaintiffs incorporate their Responses to ¶¶ 245-247. Since, as
reflected in those paragraphs, Forest had no basis to assume that sales of authorized generic
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Lexapro would be profitable at all after year one (and in fact they were unprofitable before the
end of year one), Forest also had no reasonable basis to believe that it would receive an
incremental $21.1 million in profit share payments from Mylan after year one.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
245-247 herein. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
251. Plaintiffs’ expert James Bruno conceded that a risk-averse company would want
to have a minimum term on which they are receiving payments related to an agreement.
Plaintiffs’ Admissions: Ex. 337, Bruno Dep. 240:25-241:9 (“Q. You said a few moments
ago, though, that if a company were risk-averse and wanted a guarantee, that it would
make sense for them to pay to extend the minimum term, correct? A. It would make
sense for them to have a minimum term on which they are receiving payment, they
received the royalty payment, that’s the payment.”)
Response: Denied. Defendants misrepresent Mr. Bruno’s statement, particularly the
portion in which he says “[i]t would make sense for them to have a minimum term on which they
are receiving payment....” But Mr. Bruno has made clear that Forest could not have reasonably
expected to receive payment in year two. See Litvin Decl. Ex. 262, Bruno Reply Report, ¶ 23
(“Based on my decades of experience in the pharmaceutical industry ... there is no basis to
assume that a drug product with more than 10 competitors would continue to be profitable 12
months after generic entry.”).
Forest’s Objection: Forest objects to DPPs’ improper argument that Forest
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misrepresented Mr. Bruno’s statement. This argument is not supported by any evidence
whatsoever, and DPPs cite no evidence showing the manner in which Forest allegedly
misrepresented Mr. Bruno’s statement.
Furthermore, the citation to Mr. Bruno’s report is puzzling because Mr. Bruno abandoned
the contention in his report that “there is no basis to assume that a drug product with more than
10 competitors would continue to be profitable 12 months after generic entry.” Litvin Decl. Ex.
262 Bruno Reply Rep. ¶ 23. During his deposition, he stated “what I said, that it is possible after
all the generics enter the market, a product may not be profitable. I didn’t say Lexapro. Q. So it
would have been reasonable for Forest to believe that Lexapro authorized generic would have
been profitable even 12 months after generic entry? . . . A. It would have been reasonable for
Forest to have still felt that they were going to get some financial gain or some net profit from
the product . . . .” O’Shaughnessy Decl. II Ex. 378 (Bruno Dep.) at 129:3-130:9. In any event,
the fact says nothing about Forest seeking to obtain a second year minimum term for the Original
Lexapro Agreement, and therefore Mr. Bruno’s now-abandoned belief is wholly irrelevant and
cannot dispute the stated fact. Fed. R. Evid. 402.
Thus, DPPs’ response consists of nothing more than improper argument or a recitation of
different purported facts, and no evidentiary basis to contest the statement. SESAC, 1 F. Supp.
3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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252. The addition of a second year of profit sharing after reduction of a first year’s
profit split is a commercially reasonable method for the parties to share the risk of entry by other
generic manufacturers as well as changes to the Lexapro market.
Defendants’ Evidence: Ex. 338, Green Dep. 131:20-132:19.
Response: Denied. Defendants’ only citation is a self-serving opinion of their expert
witness, which Plaintiffs’ experts directly dispute. Litvin Decl. Ex. 262, Bruno Reply Report ¶¶
13-29; O’Shaughnessy Decl. Ex. 55 at ¶¶ 34-59 (Berndt Reply Report); O’Shaughnessy Decl.
Ex. 121, Elhauge Report ¶¶ 1-35. The Responses to ¶¶ 245-251 are incorporated herein.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
245-251 herein. DPPs’ citations do not address the stated fact, but instead dispute Mr. Green’s
analysis more generally. See, e.g., O’Shaughnessy Decl. I Ex. 55, Berndt Reply Rep. at Sec. II
(section encompassing ¶¶ 34-59, entitled “Phillip Green’s analysis of Forest’s expectations of the
value of its agreement with Mylan concerning the authorized generic for Lexapro is
fundamentally flawed and unreliable.”). Thus, DPPs’ response consists of nothing more than
improper argument or a recitation of different purported facts, and no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
c. Impact of Shifting Manufacturing Costs to Mylan
253. Forest also projected that Mylan would achieve manufacturing cost savings, and
those cost savings would make Generic Lexapro more profitable overall, increasing the profit
share income for both parties.
Defendants’ Evidence: Ex. 124, FRX-AT-04617128 (projected total Mylan cost of goods
sold savings to be $2.56 million in the first year of authorized generic sales); Ex. 324,
Solomon (Sept. 7) Dep. 360:11-362:1 (“Mylan was a much larger manufacturer. They
produced far, far more pills and SKUs and had huge industrial production, much larger
than we did at Forest, and so we understood that Mylan could produce the product more
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cost effectively than we could so the thinking was there were probably several million
dollars in additional profit that would come, you know, that would it be there for sharing
because Mylan could do it more cost effectively, and that was something that again we
had modeled and I think was in one of these documents here but it was just the scale of
production for a company like Mylan with hundreds and hundreds of products and
thousands of SKUs and huge, you know, manufacturing infrastructure. They just have an
economy of scale that Forest could never achieve so their ability to produce it more cost
effectively would mean the amount of profit that was available for sharing of which we
got our piece would be – would be greater.”); Ex. 69, Green Report ¶ 54.
Response: Denied. Forest’s manufacturing costs were inflated. See Litvin Decl. Ex.
261, Bruno Report ¶ 87 (“In 2010, Forest created a table summarizing the costs of Lexapro
production with inputs that appeared inflated and thus could not serve to justify the Lexapro deal
with Mylan”); id. ¶ 88 (“There does not appear to be a legitimate basis for Forest’s predictions”);
id. ¶ 99; Litvin Decl. Ex. 262, Bruno Reply Report ¶ 22 (“it is unclear for what purpose [the
projections] were produced or the reasonable of the underlying assumptions.”). The statement is
further denied to the extent that statements of a subjective basis for an expectation necessarily
involve questions of credibility that cannot be characterized as an undisputed fact.
Forest’s Objection: None of DPPs’ response disputes the stated fact. Instead, DPPs’
response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement (and no effort to do so). SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Forest notes that DPPs have admitted that shifting manufacturing would have
lowered manufacturing costs. See Response to ¶ 222 (“Admitted that the transfer price from
Mylan to Forest would have been less than the Forest’s next lowest price, and that Medicaid
liability would therefore be greater using the transfer price.”) Accordingly, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
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254. On its March 2010 forecasts, Forest used its own cost of goods, and not Mylan’s
expected lower costs, to project the profit share they would receive from Mylan under the
Lexapro Amendment.
Defendants’ Evidence: Ex. 125, FRX-AT-04617114 (Key Assumption 7 identifying
Forest’s Cost of Goods Sold as an input); Ex. 104, FRX-AT-04617115 (same); Ex. 69,
Green Rep. ¶¶ 49, 61.
Plaintiffs’ Admissions: Ex. 337, Bruno Dep. 280:6-20, 295:6-22 (“Q.... at any point in
your reports did you say that the 0.0596 cost of goods sold figure for Forest was
inaccurate? ... A. I didn’t say it was accurate, nor did I say it was inaccurate. I said it
was equivalent to what Mylan cost of goods would be. Q. And that’s the cost of goods
sold that Forest used to project what its royalty payments were going to be under the
2010 Lexapro Amendment, correct? A. Based on this chart, it would look like that’s the
number they assumed was the cost of goods.”).
Response: Denied to the extent that Forest asserts that its cost of goods sold forecast
was accurate and not inflated. See Response to ¶ 253.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ response to ¶ 253
herein. Moreover, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
H. The Lexapro Amendment with Mylan
255. On July 21, 2010 Forest and Mylan executed the Lexapro Amendment.
Defendants’ Evidence: Ex. 126, FRX-AT-00000464.
Response: Admitted in part, denied in part. Admitted that the agreement was signed
that day, but Plaintiffs deny that the agreement was reached that day. It was actually agreed to
on March 15, 2010. See Litvin Decl. Ex. 437, FRX-AT-04579626 (March 16, 2010 joint letter
from Mylan and Forest informing Judge Sleet that the day before (March 15), the parties reached
an agreement-in-principle.). The day after that letter, Forest’s in house counsel sent Mylan’s
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counsel a draft copy of the Lexapro Amendment that contained the same material terms as the
final agreement. See Litvin Decl. Ex. 251, WSGRMEMA_000100 (March 17, 2010 email from
Forest’s in house counsel to Mylan’s counsel attaching a draft Lexapro Amendment, but not the
Namenda IR patent settlement agreement.).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs’ reference to the dates that drafts were exchanged and
when the patent court was informed about an agreement in principle on the patent settlement, say
nothing about when the Lexapro Amendment was executed. Furthermore, DPPs’ response
merely attempts to “contextualize or dispute the relevance of the statement,” but does not
challenge any aspect of the statement itself, which is an improper use of a Rule 56.1 submission.
Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
256. Alphapharm, the original counterparty to the Original Lexapro Agreement,
appointed Mylan as its assignee.
Defendants’ Evidence: Ex. 126, FRX-AT-00000464.
Response: Admitted.
257. Whereas the Original Lexapro Agreement required Forest to manufacturer and
supply Mylan’s requirements of Generic Lexapro, the Lexapro Amendment authorized Mylan to
manufacture its own requirements of Generic Lexapro.
Defendants’ Evidence: Ex. 71, FRX-AT-00000253, at 259-260 (§ 5.1); Ex. 126, FRX-
AT-00000464, at 466-70 (§§ 4-5).
Response: Admitted.
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258. The Lexapro Amendment required Mylan to qualify an appropriate facility to
manufacture Mylan’s requirements of Generic Lexapro, and for Mylan to incur the costs of the
qualification.
Defendants’ Evidence: Ex. 126, FRX-AT-00000464 at 467-70 (§ 5).
Response: Admitted in part, denied in part. The Lexapro Amendment included
section 5.1 which provided: “Subject to the terms and conditions of this Agreement (including
without limitation Section 5.2), Mylan is responsible to qualify an appropriate facility (the
“Facility”) of Mylan or an Affiliate, or of a third-party manufacturer of Mylan or an Affiliate, to
manufacture Mylan’s requirements of Generic Product for sale and distribution in the Territory
in accordance with the Authorization and License, and subject to good faith efforts and
cooperation with Forest, in time for the applicable Launch Date. All such Generic Product will
be manufactured to be released for sale in packaged form which complies with the NDA
provided that the packaging will have appropriate generic packaging and label design and will
not include the Trademark. Subject only to Forest’s express obligations under this Agreement,
including without limitation the provision of technology transfer assistance by Forest as provided
in Section 5.2, the costs of such qualification, excluding API, will be Mylan’s responsibility.”
Denied in all other respects.
Forest’s Objection: DPPs’ response quotes the exact language of the Lexapro
Amendment which supports ¶ 258. Thus, the fact should be admitted. DPPs’ response
otherwise consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
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Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
259. In turn, Forest agreed to provide “technology transfer assistance as Mylan may
reasonably request to assure a smooth, efficient and timely transfer of any technology related to
[Generic Lexapro] ....”
Defendants’ Evidence: Ex. 126, FRX-AT-00000464 at 468 (§ 5).
Response: Admitted.
260. “In consideration for the amendments and modifications to the [Original Lexapro
Agreement] ... and for the undertakings of Mylan with respect to Manufacturing of [Generic
Lexapro], Forest agree[d] to pay Mylan US $20 million ....”
Defendants’ Evidence: Ex. 126, FRX-AT-00000464 at 470 (§ 6.1).
Response: Admitted in part, denied in part. Plaintiffs admit that Defendants
accurately cite the language of the settlement agreement. Plaintiffs deny any suggestion that the
$20 million was not also a reverse payment to obtain Mylan’s agreement to abandon the
Namenda IR patent litigation. See, e.g., Litvin Decl. Ex.176, FRX-AT-03882414 at 17, 18, 20
(explaining that Mylan could reap “millions” in the Lexapro Amendment while its profits from
winning the Namenda IR patent litigation and launching would be “miniscule”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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261. The Lexapro Amendment altered the definition of “Manufacturing Costs” to be
Mylan’s direct costs of manufacture, packaging, testing, validation and shipping of authorized
Generic Lexapro.
Defendants’ Evidence: Ex. 126, FRX-AT-00000464 at 466 (§ 1.16).
Response: Admitted in part, denied in part. Admitted that Section 1.16 of the
Original Lexapro Agreement “Manufacturing Costs” was amended as follows under the Lexapro
Amendment to “mean Mylan’s direct costs (including out-of-pocket costs and directly allocable
internal overheads, but not including allocations of corporate or general overheads) of
manufacture, packaging, testing, validation and shipping of such Generic Product, including,
without limitation, Mylan’s acquisition costs of Compound, recorded in accordance with US
GAAP.” Denied in all other respects.
Forest’s Objection: DPPs’ response quotes the exact language of the Lexapro
Amendment which supports ¶ 261. Thus, the fact should be admitted. DPPs’ response
otherwise consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. Accordingly, the fact should be deemed admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
262. By modifying the definition of Manufacturing Costs, the Lexapro Amendment
also modified the definition of “Product Profit” as set forth in the Original Lexapro Agreement to
be Mylan’s “net sales” less Mylan’s manufacturing costs (versus Mylan’s net sales less Forest’s
manufacturing costs under the original agreement).
Defendants Documents: Ex. 126, FRX-AT-00000464 at 466 (§ 1.16, redefining
Manufacturing Costs); Ex. 71, FRX-AT-00000253 (§ 1.23 defining Product Profit as net
sales less “the Manufacturing Costs for [Generic Lexapro]”).
Response: Admitted.
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263. Mylan agreed to pay Forest a profit share of 30% as to the first $100 million of
cumulative product profit, 35% with respect to the next $50 million in cumulative product profit
and 40% with respect to cumulative product profit in excess of $150 million.
Defendants’ Evidence: Ex. 126, FRX-AT-00000464 at 466, 470-471 (§ 6); Ex. 69, Green
Rep. ¶ 45.
Response: Admitted that Forest agreed pursuant to the Lexapro Amendment to accept
a smaller royalty from Mylan in the manner described.
264. The Original Lexapro Agreement was also amended to permit Mylan to terminate
the Lexapro Amendment two years following the launch of Generic Lexapro, as opposed to one
year following the launch of Generic Lexapro as permitted under the Original Lexapro
Agreement.
Defendants’ Evidence: Ex. 126, FRX-AT-00000464 at 472 (§11).
Response: Admitted in part, denied in part. Admitted that the Original Lexapro
Agreement was amended as follows: “under the Section 15.1 of the Distribution Agreement is
hereby amended by replacing the phrase ‘one year following the Launch Date’ in subclause (ii)
thereof by the phrase ‘two years following the Launch Date.’” Denied as to any suggestion that
Mylan could not manufacture its own generic version of Lexapro under its ANDA even without
terminating the contract. See O’Shaughnessy Decl. Ex. 122 at n.14 (Elhauge Rebuttal Report).
Forest’s Objection: DPPs’ response quotes the exact language of the Lexapro
Amendment which supports ¶ 264. Thus, the fact should be admitted. DPPs’ response
otherwise consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
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improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
265. In accordance with its analyses, under the Lexapro Amendment, Forest incurred
$20 million of liability to Mylan by agreeing to pay it a lump sum, and reduced its profit share
payments by $12.5 million under the graduated profit share amendment, but extended the
minimum term of the agreement to achieve its expected $21.1 million of additional profit share
revenue in year two, and shifted the manufacturing responsibilities to Mylan for an expected
$26.5 million savings in year one Medicaid rebate liability.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 100:10-101:3, 103:14-106:24;
Ex. 69, Green Rep. ¶¶ 55, 59; Ex. 338, Green Dep.76:2-13 (“Q. Okay. So you are saying
the 12 and a half million dollar reduced payment that Forest would receive in year one
would be offset by the expected profit-share payments in year two? A. Yes. In doing any
analysis of fairness, one would take a look at the expectations of the parties at the time
the deal was done, and at the time Forest’s projections indicated that it was expecting to
have profit-share payments in the second year that would offset the reduced profit-share
payments in the first.”); Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex.
366, Solomon (Nov. 15) Dep. 415:5-416:2.
Response: Admitted in part, denied in part. Admitted that Mylan received a $20
million lump sum payment and saved $12.5 million on the first $150 million of profit share
payments to Forest and agreed to a two year minimum term in the Lexapro Amendment.
Plaintiffs deny that Forest could have reasonably expected to receive any profit share payments
from Mylan in year two. Plaintiffs further deny that Forest employed accurate forecasts of its
Medicaid rebate savings. Plaintiffs incorporate their Responses to ¶¶ 221-235. The statement is
further denied to the extent that it makes a subjective conclusion that any results were “in
accordance with its analyses,” which necessarily involve questions of credibility that cannot be
characterized as an undisputed fact.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶
221-235 herein. DPPs’ response consists of improper argument or a recitation of different
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purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
266. Mylan received a $20 million lump sum payment, saved $12.5 million dollars on
the first $150 million of profit share payments to Forest, and agreed to extend the minimum term
of the agreement to pay Forest its profit share for at least one additional year (which Forest
expected would cost Mylan $31.7 million).
Defendants’ Evidence: Ex. 69, Green Rep. ¶ 46, 52-53, 59, 75; Ex. 126, FRX-AT-
00000464, at 470 (§ 6); Ex. 104, FRX-AT-04617115; Ex. 127, FRX-AT-04617132; Ex.
366, Solomon (Nov. 15) Dep. 415:5-416:2.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 187:8-190:14.
Response: Admitted in part, denied in part. Admitted that Mylan received a $20
million lump sum payment and saved $12.5 million on the first $150 million of profit share
payments to Forest and agreed to a two year minimum term in the Lexapro Amendment.
Plaintiffs deny that Forest could have reasonably expected to receive any profit share payments
from Mylan in year two. Plaintiffs assert that Mylan’s contemporaneous forecasts show that
Mylan expected to make a nominal profit share payment in year two. See Litvin Decl. Ex. 237,
MYLMEMA_003597 at 3601 (August 18, 2010 Mylan Escitalopram Oxalate Tablets Launch
Project Team presentation modeling volume, sales, and profit assumptions for authorized generic
Lexapro). See Response to ¶ 245.
Forest’s Objection: Forest incorporates its objection to DPPs’ response to ¶ 245 herein.
DPPs concede that Forest expected to receive profit share payments in year two. DPPs further
concede that after the Lexapro Amendment was executed, Mylan also expected that Generic
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Lexapro would be profitable in year two. Litvin Decl. Ex. 237, MYLMEMA_003597 at 3601.
Thus, DPPs offer nothing but speculation — contradicted by the evidence — when they deny
that Forest could have reasonably expected to receive any profit share payments from Mylan in
year two. In any event, DPPs do not contest that Forest expected to receive these payments, and
have admitted all other portions of the stated fact, and therefore the fact should be deemed
admitted. In effect, DPPs’ response is nothing more than improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, while DPPs’ response attempts to
“contextualize or dispute the relevance of the statement,” it does not challenge any aspect of the
statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
I. Mylan’s Threatened Antitrust Suit
267. On February 19, 2010, Mylan sent Forest a draft complaint that alleged Forest
engaged in antitrust violations.
Defendants’ Evidence: Ex. 128, FRX-AT-03629657; Ex. 129, FRX-AT-03629662.
Response: Admitted.
268. The draft complaint alleged antitrust violations in connection with Forest’s
application for a Patent Term Extension with the United States Patent and Trademark Office for
U.S. Patent No. 5,061,703, listed in the Orange Book for Namenda.
Defendants’ Evidence: Ex. 130, FRX-AT-03629684; Ex. 129, FRX-AT-03629662, at
663; Ex. 340, Agovino Dep. 102:19-25;
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 68:18-25.
Response: Admitted that the draft complaint alleged antitrust violations in connection
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with Forest’s application for a Patent Term Extension with the United States Patent and
Trademark Office, see O’Shaughnessy Decl. Ex. 129, or that U.S. Patent No. 5,061,703 was
listed in the Orange Book for Namenda.
269. Mylan shared the draft antitrust complaint with Forest after the parties executed a
standstill agreement on February 18, 2010 with respect to Mylan’s antitrust allegations, whereby
Forest agreed to not take any action that would prejudice or delay Mylan’s ability to file the
antitrust complaint, and Mylan agreed to file the antitrust complaint no sooner than February 26,
2010, so that the parties had an opportunity to settle the allegations prior to the filing of the
complaint.
Defendants’ Evidence: Ex. 131, FRX-AT-03629651; Ex. 132, FRX-AT-03629655; Ex.
128, FRX-AT-03629657; Ex. 324, Solomon (Sept. 7) Dep. 305:18-306:23, 309:15-23;
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 63:1-14, 64:21-66:5.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. There are several other obligations in the agreement that Forest does
not reference in this statement. Admitted that Mylan and Forest executed a standstill agreement
on February 18, 2010. O’Shaughnessy Decl. Ex. 132. Admitted that Forest agreed, among other
things, “that it will not take any action to prejudice of delay Mylan’s ability to file the
Complaint.” Id. Admitted that Mylan agreed, among other things, that “it will file the Complaint
no sooner than the close of business on Friday, February 26, 2010.” Id. Admitted that the
agreement states that “the intent of this agreement is to provide Mylan and Forest with an
opportunity to settle Mylan’s allegations against Forest before the Complaint becomes public and
preserve the status quo during the time of these discussions.” Id. Further, ¶ 269 is not material
for purposes of summary judgment because this purported fact is not cited anywhere in
Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
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Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
270. Mylan’s antitrust complaint, if filed and successful, could have exposed Forest to
hundreds of millions of dollars of damages and the cost of defending a complex antitrust suit.
Defendants’ Evidence: Ex. 129, FRX-AT-03629662 at 9682 (including in its Prayer for
Relief a claim for “damages, costs of suit, interest and attorneys fees ....”);
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 316:2-21; Ex. 341, Fowdur Dep.
77:15-79:20; Ex. 54, Fowdur Rep. ¶¶ 55-56;
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 19:1-17, 20:13-24, 22:8-14.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and calling for speculation. To the extent that a response is required, Plaintiffs
disagree that the antitrust complaint exposed Forest to hundreds of millions of dollars of
damages. To the contrary, the antitrust complaint explicitly states that “Mylan currently does not
know the full extent of its threatened damages, but it is believed that the total damages resulting
from the unlawful conduct alleged herein will be substantial. Mylan reserves the right to amend
the present Complaint at such time as Mylan has ascertained more precisely the full extent of its
threatened damages.” O’Shaughnessy Decl. Ex. 129 at FRX-AT-03629677. Mylan and Forest
reached an “agreement in principle” to settle the patent litigation before the original April 11,
2010 expiration of the ‘703 patent. Litvin Decl. Ex. 439, March 16, 2010 Letter (ECF No. 479 in
the ‘703 Patent Litigation). Accordingly, at the time of their settlement, Mylan had no even
theoretical antitrust damages. Further, Mylan’s projected profits from marketing a generic
version of Namenda were “miniscule” and therefore future antitrust damages, if any, would have
been “miniscule.” Litvin Decl. Ex. 176, FRX-AT-03882414 at 418. Forest has failed to allege
any particularized costs associated with defending an antitrust lawsuit, but Plaintiffs note that
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due to the overlap between Mylan’s PTE validity challenge and its antitrust lawsuit, the antitrust
lawsuit would be cumulative in certain respects to the patent infringement lawsuit and therefore
Plaintiffs dispute that it would be a “complex” antitrust suit.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs’ reference to the agreement in principle is irrelevant
as ¶ 270 relates to the antitrust complaint if it had been filed and pursued, not if it was released
with the patent settlement. Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. DPPs’ response does not rebut the testimony of Mylan’s witness, Seth Silber,
who agreed that “if filed and successful, the complaint could have exposed Forest to hundreds of
millions of dollars of damages.” O’Shaughnessy Decl. I Ex. 329, Silber (Mylan) Dep. 20:13-24.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
271. Mylan released its potential antitrust claims at the same time Forest and Mylan
entered into the Namenda patent settlement agreement and Lexapro Amendment.
Defendants’ Evidence: Ex. 33, FRX-AT-00000428 at 0429-0430 (releasing “all claims
that Mylan ... could have asserted ... in any judicial proceeding that the ‘703 Patent, or
any patent term extension related thereto ... is somehow invalid, unenforceable or not
infringed ....”);
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 143:19-144:6; Ex. 340, Agovino
Dep. 131:19-22, 132:22-134:3;
Third Party Evidence: Ex. 329, Silber (Mylan) Dep. 20:25-21:2, 21:5-11 (indicating
Mylan released its potential antitrust claims in connection with the Namenda patent
settlement agreement).
Response: Admitted in part, denied in part. Plaintiffs admit that the Lexapro
Amendment contained a release of an antitrust claim that Mylan threatened to bring against
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Forest. See Response to ¶ 270. Plaintiffs deny any suggestion that the threatened antitrust claim
was materially different from Mylan’s patent defense in the Namenda IR patent infringement suit
that was on the eve of trial. See Response to ¶ 270.
Forest’s Objection: DPPs’ response is perplexing, as the cited document
(O’Shaughnessy Decl. I Ex. 33) is the Namenda patent litigation settlement agreement, not the
Lexapro Amendment. Thus, DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Meanwhile, DPPs have admitted the “that the Lexapro Amendment contained
a release of an antitrust claim that Mylan threatened to bring against Forest.” Accordingly, the
fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
272. Mylan released the allegations made in the draft antitrust complaint in its
Namenda patent settlement agreement with Forest.
Defendants’ Evidence: Ex. 33, FRX-AT-00000428 at 429-430 (§ 6) (releasing “all
claims that Mylan ... could have asserted ... in any judicial proceeding that the ‘703
Patent, or any patent term extension related thereto ... is somehow invalid, unenforceable
or not infringed ... .”); Ex. 324, Solomon (Sept. 7) Dep. 142:23-144:6;
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 21:5-22:7.
Response: Admitted in part, denied in part. Plaintiffs admit that the Lexapro
Amendment contained a release of an antitrust claim that Mylan threatened to bring against
Forest. See Response to ¶ 270. Plaintiffs deny any suggestion that the threatened antitrust claim
was materially different from Mylan’s patent defense in the Namenda IR patent infringement suit
that was on the eve of trial. See Response to ¶ 270.
Forest’s Objection: DPPs’ response is perplexing, as the cited document
(O’Shaughnessy Decl. I Ex. 33) is the Namenda patent litigation settlement agreement, not the
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Lexapro Amendment. And the release of the antitrust claim was in the patent settlement
agreement, not the Lexapro Amendment. O’Shaughnessy Decl. I Ex. 33, FRX-AT-00000428 at
429-430 (§ 6). Thus, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
273. Mylan believed a portion of the consideration paid to Mylan in connection with
the Lexapro Amendment was in consideration for Mylan releasing its antitrust allegations against
Forest.
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 84:4-10.
Response: Admitted in part, denied in part. Plaintiffs admit that notwithstanding the
express language of the Lexapro Amendment that the consideration therein was “for the
amendments and modifications to the [Original Lexapro Agreement] ... and for the undertakings
of Mylan with respect to Manufacturing of [Generic Lexapro],” Mylan’s corporate representative
testified that the payment was to resolve Mylan’s threatened antitrust suit. Plaintiffs deny any
suggestion that the threatened antitrust claim was materially different from Mylan’s patent
defense in the Namenda IR patent infringement suit that was on the eve of trial. See Response to
¶ 270. Accordingly, Plaintiffs deny any suggestion that the payment was not a reverse payment.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Furthermore, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). DPPs also admit that “Mylan’s corporate representative
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testified that the payment was to resolve Mylan’s threatened antitrust suit.” Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
J. The Mylan Settlement Agreement
274. On July 21, 2010, Forest and Mylan entered into a Settlement and Licensing
Agreement (“Mylan Settlement Agreement”) resolving Forest Laboratories, Inc. et al. v. Lupin
Pharmaceuticals, Inc. et al., Civil Action No. 08-021-GMS-LPS (consolidated) in the United
States District Court for the District of Delaware.
Defendants’ Evidence: Ex. 33, FRX-AT-00000428.
Response: Admitted.
275. The Mylan Settlement Agreement was negotiated by a different team of Forest
employees than those that negotiated the Original Lexapro Agreement and the Lexapro
Amendment.
Defendants’ Evidence: Ex. 324, Solomon (Sept. 7) Dep. 95:5-96:8 (noting that Mr.
Solomon was not involved in the negotiation of the patent settlement agreement because
that was handled by, Charles Ryan and Eric Agovino, Forest’s patent counsel); Ex. 339,
Ryan (Sept. 7) Dep. 235:15-24 (indicating David Solomon, Rachel Mears, and Robert
Carnevale had no role in negotiating the settlement agreements with the generic
manufacturers).
Response: Denied. David Solomon was the primary negotiator of the Lexapro
Amendment and was also deeply involved in the Namenda IR patent litigation settlement. He
wrote in a self-evaluation that he “play[ed] a role personally in the management of various legal
and IP related matters – which fits into the Strategic Planning part of my responsibilities.... We
are now in the midst of major litigation with the many generic challengers to Namenda.” Litvin
Decl. Ex. 162, FRX-AT-03783935-45 at 43. See also Litvin Decl. Ex. 251,
WSGRMEMA_000100 (March 17, 2010 email from Forest’s in house counsel to Mylan’s
counsel attaching a draft Lexapro Amendment, and copying David Solomon.); Litvin Decl. Ex.
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318, Ryan Dep. (Nov. 7, 2017) at 344:12-346:8 (David Solomon was present at a February, 2010
Namenda patent litigation settlement meeting between Forest and Mylan where the Lexapro
Amendment, was discussed.); Litvin Decl. Ex. 333, Solomon Dep. Ex. 12 (excerpts from
Defendants’ privilege log identifying David Solomon as the author “deal concepts” for the
settlement of the Namenda patent litigation in conjunction with the Lexapro Amendment.).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Nothing DPPs cite contradicts the fact that the Mylan
Settlement Agreement was negotiated by different teams. At most, DPPs response shows that
David Solomon had a role in high-level management of different matters. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
276. Section 13 of the Settlement Agreement states that “Exhibits A through C,
constitutes the complete, final and exclusive agreement between the Parties with respect to the
subject matter hereof and supersedes and terminates any prior or contemporaneous agreements
and/or understandings between the Parties, whether oral or in writing, relating to such subject
matter.”
Defendants’ Evidence: Ex. 33, FRX-AT-00000428, at 434 (§ 13).
Response: Admitted in part, denied in part. Plaintiffs admit that Defendants have
accurately reproduced text from the Namenda Settlement agreement. Plaintiffs deny that the
statement is accurate. First, the “Material Contracts” section of the Agreement and Plan of
Merger between Actavis plc and Forest Laboratories listed, along with all the other ‘703
Namenda patent settlements, the Mylan ‘703 patent settlement, “together with” the Lexapro
Amendment, as agreements entered into “in connection with the settlement of NAMENDA
patent dispute.” Litvin Decl. Ex. 132, FRX-AT-03598911 at 9069 (emphasis added). Second,
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Forest’s in-house and outside counsel repeatedly referred to the Lexapro Amendment as a “side-
deal” to the Namenda patent dispute. See Litvin Decl. Ex. 192, FRX-AT-04272344-47 at 44;
Litvin Decl. Ex. 208, FRX-AT-04595004. Third Forest’s patent counsel also confirmed that the
Lexapro Amendment was a component to the Namenda patent settlement. See Litvin Decl. Ex.
318, Ryan Dep. (Nov. 7, 2017) at 364:14-365:13. Fourth, Forest’s counsel submitted to the
Federal Trade Commission and the Department of Justice, a copy of the Lexapro Amendment,
along with the ‘703 patent settlement, pursuant to Section 1112(a) of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003, which requires the parties to certain
Hatch-Waxman related patent settlements to “file with the Assistant Attorney General and the
Commission the text of any agreements between the parties that are ... contingent upon, provide
a contingent condition for, or are otherwise related to” a patent settlement agreement.
MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF
2003, 108 P.L. 173, 117 Stat. 2066, 2462. See Litvin Decl. Ex. 124, FRX-AT-03515722; Litvin
Decl. Ex. 125, FRX-AT-03515775. Fifth, the “Mylan Deal Concept” and February 11, 2010
powerpoint explicitly portrayed and linked the Lexapro Amendment as a component to the
Namenda patent litigation and portrayed the value of winning the Namenda patent settlement as
“miniscule” compared to the value offered via the Lexapro amendment. See Responses to ¶¶
215, 270.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. The fact in question simply referred to the language of
agreement, which DPPs admit has been accurately reproduced. Accordingly, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
277. Section 1.13 of the Mylan Settlement Agreement permitted Mylan to launch three
calendar months prior to the expiration of the ‘703 patent, and any extensions or pediatric
exclusivity, provided that Mylan had obtained final approval from the FDA of its ANDA.
Defendants’ Evidence: Ex. 33, FRX-AT-00000428 at 447;
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 22:17-23:4.
Response: Admitted in part, denied in part. Plaintiffs admit that Mylan was able to
launch generic Namenda IR three months before the expiry of the ‘703 patent. Plaintiffs deny
that those were the only circumstances under which Mylan was able to launch generic Namenda
IR. See O’Shaughnessy Decl. Ex. 121, Elhauge Report at ¶ 8.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
278. In Section 2.5 of the License Agreement, included as Exhibit B to the Mylan
Settlement Agreement, Mylan represented that its attorney fees and costs in the action had
exceeded $2 million, and Forest agreed to pay Mylan $2 million to “defray a portion of the paid
attorney fees and costs that Mylan has already expended in the Action and to reflect a portion of
the saved attorney fees and costs that Plaintiffs will not have to expend in the Action ....”
Defendants’ Evidence: Ex. 33, FRX-AT-00000428 at 449 (§ 2.5).
Response: Admitted that Defendants have accurately transcribed the text of Section
2.5 of the License Agreement.
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279. The terms of the settlement had been agreed in principle in early 2010, while
Forest’s business development teams continued to negotiate the terms of the Lexapro
Amendment.
Defendants’ Evidence: Ex. 329, Silber (Mylan) Dep. 26:12-27:5, 61:16-24, 73:10-21,
81:5-14.
Response: Denied. The evidence cited does not support the proposition set forth in
¶279. In O’Shaughnessy Decl. Ex. 329, at 26:12-27:5, 61:16-24, Mr. Silber says nothing about
any agreement in principle or its timing. Moreover, an agreement in principle as to the Lexapro
Amendment was also reached in early 2010, specifically no later than March 15, 2010. See
Litvin Decl. Ex. 437, FRX-AT-04579626 (March 16, 2010 joint letter from Mylan and Forest
informing Judge Sleet that the day before (March 15), the parties reached an agreement-in-
principle.). The day after that letter, Forest’s in house counsel sent Mylan’s counsel a draft copy
of the Lexapro Amendment that contained the same material terms as the final agreement. See
Litvin Decl. Ex. 251, WSGRMEMA_000100 (March 17, 2010 email from Forest’s in house
counsel to Mylan’s counsel attaching a draft Lexapro Amendment, but not the Namenda IR
patent settlement agreement.).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. While Mr. Silber did not use the words “agreement in principle,”
he clearly testitified that the only material term of the patent settlement (the entry date) was
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agreed to by the parties prior to February 2010. See also O’Shaughnessy Decl. I Ex. 329, Silber
(Mylan) Dep. 73:15-21.
Additionally, DPPs’ discussion of the Lexapro Amendement does not dispute the fact, as
Mylan and Forest continued to negotiate the terms of the Lexapro Amendment after early 2010.
Litvin Decl. Ex. 437, FRX-AT-04579626 only states that Mylan and Forest reached an
“agreement-in-principle.” See also O’Shaughnessy Decl. I Ex. 329, Silber (Mylan) Dep. 26:12-
27:5, 61:17-24. It does not mention anything about the Lexapro Amendment. Accordingly, the
fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
280. Forest estimated that, at the time of the Mylan Settlement Agreement, Forest’s
future litigation costs were in the “high single digit millions” and up to $10 million.
Defendants’ Evidence: Ex. 325, Snyder Dep. 29:7-15; Ex. 324, Solomon (Sept. 7) Dep.
236:2-237:24 (“My understanding is our internal projections were we had, you know,
probably another 10 million dollars of legal expenses and associated costs left.”).
Response: Denied. Forest’s own lawyers estimated that Forest’s “total litigation
costs” for “trial and post trial briefs” and “appeal costs” beginning in the second quarter of 2010
were $3.5 million. Litvin Decl. Ex. 440, Solomon Dep. at Ex. 26, FRX-AT-04248512. And the
settlement-in-principle between Mylan and Forest was reached in the beginning of the second
quarter of 2010 (March 15, 2010). Litvin Decl. Ex. 437, Solomon Dep. at Ex. 13, FRX-
AT-04579626. At the time of the settlement-in-principle between Mylan and Forest, the April 5
trial was only weeks away. Id.; see also Litvin Decl. Ex. 443, Supplemental Scheduling Order,
ECF No. 117. Accordingly, Forest’s future litigation costs at the time of the Mylan settlement
were no more than $3.5 million. Litvin Decl. Ex. 442, Johnston Op. Report at ¶¶ 417-432.
Forest’s cited testimony identifying future litigation costs in the “high single digit
millions” and “up to $10 million” directly contradicts Forest’s own lawyers’ estimate of $3.5
million. Litvin Decl. Ex. 440, Solomon Dep. at Ex. 26, FRX-AT-04248512. It also contradicts
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the AIPLA 2009 Economic Survey, which estimates that in patent infringement litigations where
more than $25 million is at stake (like the Namenda Patent Litigation), it costs about $3 million
from the end of discovery through trial and appeal. Litvin Decl. Ex. 441, Solomon Dep. at Ex.
27, I-131,
That Forest’s cited testimony conflicts with the evidence is not surprising, as neither
witness had any first-hand knowledge of Forest’s litigation expenditures. Mr. Solomon’s only
knowledge came during a conversation that occurred eight years earlier with someone he could
not recall. Litvin Decl. Ex. 460, Solomon Dep. (Sept. 7, 2017) at 238:2-239:15. And Ms.
Snyder’s only knowledge came from a brief conversation with another Forest employee, Mr.
Ryan Coletti; she was not involved with the Namenda Patent Litigation and did not know how
Mr. Coletti calculated Forest’s litigation costs. Litvin Decl. Ex. 328, Snyder Dep. (Oct. 11, 2017)
at 11:23-12:16, 18:18-20, 19:19-21:22.
The statement is further denied to the extent that statements of a subjective basis for the
estimation described necessarily involve questions of credibility that cannot be characterized as
an undisputed fact.
Forest’s Objection: Litvin Decl. Ex. 440 does not dispute that, at the time of the
settlement, Forest expected to incur future litigation costs up to $10 million, as Exhibit 440 is
dated approximately 16 months before the settlement, and contains only rough estimates of
attorneys’ fees, not litigation costs, that were “currently estimated” at that time. Moreover,
Litvin Decl. Ex. 440 states that the “estimates are preliminary and subject to change based on
changes in the case schedule, the conduct of our adversaries, and various other factors that
impact litigation.” Finally, Litvin Decl. Ex. 441, the AIPLA 2009 Economic Survey, is
irrelevant here because it is estimating litigation costs for all types of patent infringement cases,
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not Hatch Waxman patent litigations in which value “at stake” are well in excess of $25 million.
Thus, the only exhibit that DPPs cite to in order to dispute the statement is the ipse dixit of their
purported expert, Mr. Johnston, which is not sufficient to create a genuine issue of fact.
Accordingly, DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement, and thus the fact should be admitted.
SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
GENERIC SETTLEMENTS: NO CAUSATIONIII.
A. The Namenda IR Patent Litigation Against Fifteen Generic Defendants
281. In late 2007 and early 2008, fifteen generic pharmaceutical companies (TEVA
Pharmaceuticals USA Inc. (“Teva”); Cobalt Laboratories, Inc. (“Cobalt”); Barr Pharmaceuticals
Inc. (“Barr”); Orchid Healthcare (“Orchid”); Lupin Pharmaceuticals, Inc. (“Lupin”);
Upsher-Smith Laboratories, Inc. (“Upsher-Smith”); Wockhardt USA Inc. (“Wockhardt”);
Genpharm LP (“Genpharm”); Mylan Pharmaceuticals Inc. (“Mylan”); Interpharm Inc
(“Amneal”); Ranbaxy Laboratories Limited (“Ranbaxy”); Sun India Pharmaceutical Industries
Limited (“Sun”); Dr. Reddy’s Laboratories Inc. (“DRL”); Synthon Laboratories, Inc.
(“Synthon”); and Apotex Inc. (“Apotex”) notified Forest of Abbreviated New Drug Applications
filed with the FDA, each seeking approval to market a generic version of Namenda® before the
expiration of the ‘703 patent.
Public Documents: Ex. 133, Forest Laboratories Inc. et al v. Lupin Pharmaceuticals Inc.
et al., Case No. 1:08-cv-00021-LPS, (“‘703 Patent Litigation”) Dkt. No. 1; Ex. 134,
Forest Laboratories, Inc. et al. v. Barr Laboratories, Inc. and Barr Pharmaceuticals Inc.,
Case No. 1:08-cv-00022-LPS, Dkt. No. 1; Ex. 135, Forest Laboratories, Inc. et al. v. Dr.
Reddy’s Laboratories, Inc. et al., Case No. 1:08-cv-00052-LPS, Dkt. No. 1; Ex. 136,
Forest Laboratories, Inc. et al. v. Orgenus Pharma, Inc., Case No. 1:08-cv-00291-LPS,
Dkt. No. 1; Ex. 137, Forest Laboratories, Inc. et al. v. Apotex Inc. and Apotex Corp.,
Case No. 1:08-cv-336-GMS-LPS, Dkt. No. 1.
Plaintiffs’ Admissions: Am. Compl., ¶¶ 102, 103, 106.
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Response: Admitted.
282. Forest responded by filing several patent infringement lawsuits in the District of
Delaware in early 2008, asserting infringement of the ‘703 patent under 35 U.S.C. §
271(e)(2)(A).
Public Documents: Ex. 133, ‘703 Patent Litigation, Dkt. No. 1; Ex. 134, Forest
Laboratories, Inc. et al. v. Barr Laboratories, Inc. and Barr Pharmaceuticals, Inc., Case
No. 1:08-cv-00022-LPS, Dkt. No. 1; Ex. 135, Forest Laboratories, Inc. et al. v. Dr.
Reddy’s Laboratories, Inc. et al., Case No. 1:08-cv-00052-LPS, Dkt. No. 1; Ex. 136,
Forest Laboratories, Inc. et al. v. Orgenus Pharma, Inc., Case No. 1:08-cv-00291-LPS,
Dkt. No. 1; Ex. 137, Forest Laboratories, Inc. et al. v. Apotex Inc. and Apotex Corp.,
Case No. 1:08-cv-336-GMS-LPS, Dkt. No. 1
Plaintiffs’ Admissions: Am. Compl., ¶¶ 104-105, 108; Ex. 3, Johnston Rep. ¶ 59-60.
Response: Admitted.
283. The court eventually consolidated the cases into a single action and scheduled a
claim construction hearing for December 15, 2008 and a trial from April 5 to April 9, 2010.
Public Documents: Exs. 316, 318, 317, 319, ‘703 Patent Litigation, Dkt. Nos. 76, 83,
114, 117.
Plaintiffs’ Admissions: Am. Compl. ¶ 104; DPPs’ Statement of Material Facts ISO
Count Three, ¶¶ 22, 36, 50, 64, 78, 91, 105; Ex. 3, Johnston Rep. ¶ 61.
Response: Admitted that the cases were consolidated into a single action, and that on
December 15, 2008, the Magistrate Judge held a Markman hearing. Plaintiffs do not dispute that
a Supplemental Scheduling Order was entered in which Judge Stark Ordered a five day bench
trial beginning at 9:00 a.m. on April 5, 2010 before Chief Judge Gregory Sleet. O’Shaughnessy
Decl. Ex. 319.
284. The consolidated case was before Chief Judge Sleet and Magistrate Judge Stark
(now a District Judge).
Public Documents: See generally ‘703 Patent Litigation docket.
Response: Admitted. Plaintiffs object to the statement that Magistrate Judge Stark is
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“now a District Judge” as immaterial to the resolution of the Defendants’ summary judgment
motion.
B. The Namenda Patent Litigation Claim-Construction Ruling
285. Magistrate Judge Stark conducted a claim construction hearing on December 15,
2008.
Public Documents: Ex. 138, ‘703 Patent Litigation, Dkt. No. 248.
Response: Admitted.
286. On July 2, 2009, Magistrate Judge Stark issued a Report and Recommendation
Regarding Claim Construction, interpreting certain terms of the ‘703 patent’s claims where the
parties could not agree on their meaning.
Public Documents: Ex. 139, ‘703 Patent Litigation, Dkt. No. 373.
Response: This statement is improperly stated as a mixed statement of fact and law.
To the extent a response is required, the statement is admitted.
287. In his Report and Recommendation, Magistrate Judge Stark explained that he
“largely sided with Plaintiffs” [i.e., Forest] and adopted Forest’s positions on 9 of the 13 disputed
issues.
Public Documents: See generally Ex. 139, ‘703 Patent Litigation, Dkt. No. 373; see also
id. at 21 (“Just as I have largely sided with Plaintiffs above, and for the same reasons. I
do so here as well.”).
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 56.
Plaintiffs’ Admissions: Ex. 140, Direct Purchaser Class Plaintiffs’ Amended Responses
to Forest’s Request for Admission No. 12, dated Jul. 19, 2017.
Response: This statement is improperly stated as a mixed statement of fact and law.
To the extent a response is required, this statement is admitted in part, denied in part. Plaintiffs
object to this statement as immaterial and improperly characterizing a public document. Whether
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or not Judge Stark agreed with one party’s “positions” over other parties’ “positions” is
immaterial because any such agreement with a particular party does not establish that the claim
construction(s) impacted any substantive issue in a meaningful way. Plaintiffs interpret Judge
Stark’s statement that he “largely sided with Plaintiffs above,” O’Shaughnessy Decl. Ex. 139 at
21 (emphasis added), to refer to the preceding claim construction. Assuming that each lettered
subsection A-M of the Report and Recommendation is viewed as a “claim construction issue[],”
Admitted that Judge Stark agreed with Forest on 9 out of 13 of those issues.
Forest’s Objection: Forest fully incorporates its objection to DPPs’ response to ¶ 79
herein. DPPs’ response does not provide any evidentiary basis to contest the statement, but
instead attempts to “contextualize or dispute the relevance of the statement,” which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
288. For the terms where he did not adopt Forest’s proposed constructions verbatim,
Magistrate Judge Stark rejected the generics’ proposals and instead crafted his own
constructions.
Public Documents: Ex. 139, ‘703 Patent Litigation, Dkt. No. 373 at 17 (For “prevention
of cerebral ischemia:” “The Defendants’ proposed constructions, however, are no more
persuasive.”), 24 (construing “Alzheimer’s disease” differently than Defendants proposed
and construing “Patient diagnosed with Alzheimer’s disease” in accordance with the
construction of “Alzheimer’s disease”), 27-28 (disagreeing with Defendants’ construction
of “Amount effective to prevent degeneration an loss of nerve cells after ischemia”).
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 56
Response: This statement is improperly stated as a mixed statement of fact and law.
To the extent a response is required, this statement is admitted in part, denied in part. Plaintiffs
object to this statement as immaterial and improperly characterizing a public document. Whether
or not Judge Stark agreed with one party’s “positions” over other parties’ “positions” is
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immaterial because any such agreement with a particular party does not establish that the claim
construction(s) impacted any substantive issue in a meaningful way. Judge Stark agreed with the
generics on a number of issues. For example, he agreed with generics that Alzheimer’s disease
“would be found to contain plaques and tangles.” O’Shaughnessy Decl. Ex. 139 at 23. To the
extent that this statement misleadingly suggests that Judge Stark only disagreed with the
generics, Judge Stark also noted disagreement with Forest, see, e.g., O’Shaughnessy Decl. Ex.
139 at 17 and n. 6, and noted at least once that “[he did] not agree with either side.”
O’Shaughnessy Decl. Ex. 139 at 28.
Forest’s Objection: DPPs’ response does not explain how ¶ 288 is “a mixed statement
of fact and law.” DPPs’ response does not explain how ¶ 288 “improperly characteriz[es]” a
public document. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
Forest fully incorporates its objection to DPPs’ response to ¶ 79 herein.
289. Magistrate Judge Stark rejected the generics’ argument that “cerebral ischemia” (a
component of several claim terms) be construed to mean “an acute interruption of blood supply
to the brain.”
Public Documents: Ex. 139, ‘703 Patent Litigation, Dkt. No. 373, at 7-17 (construing
“cerebral ischemia” and stating on page 9, “I agree that Defendants have properly framed
the question presented, but I have concluded that Plaintiffs’ answer is the correct one”).
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 58
Response: This statement is improperly stated as a mixed statement of fact and law.
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To the extent a response is required, this statement is admitted in part, denied in part. Plaintiffs
object to this statement as immaterial and improperly seeking to characterize a public document.
Plaintiffs admit that Judge Stark construed “cerebral ischemia” as that term is used in claims 1
and 14 to mean “an imbalance of neuronal stimulation mechanisms.” Plaintiffs further note that
there were competing generic proposals. For example, Apotex proposed that the term be
construed to have its “plain and ordinary meaning,” while other generics proposed that the term
be construed to mean “an acute interruption of blood supply to the brain characterized by a
destruction of brain cell,” O’Shaughnessy Decl. Ex. 139 at 7.
Forest’s Objection: DPPs’ response does not explain how ¶ 289 is “a mixed statement
of fact and law.” DPPs’ response does not explain how ¶ 289 “improperly characteriz[es]” a
public document. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact should
be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
290. After a review of the patent’s specification, the Court explained: “The main
points derived from these portions of the specification are that the invention has to do with the
central nervous system and not the bloodstream; the problem the invention is directed to
addressing is an imbalance of neuronal stimulation mechanisms; and the invention acts on
NMDA receptor channels,” all of which Magistrate Judge Stark found supported Forest’s
construction. Thus, Magistrate Judge Stark adopted Forest’s proposal and construed the term
“cerebral ischemia” to relate to an “imbalance of neuronal stimulation mechanisms.”
Public Documents: Ex. 139, ‘703 Patent Litigation, Dkt. No. 373, at 10-11, 14, 17.
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 58.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. Ex. K.
Response: This statement is improperly stated as a mixed statement of fact and law.
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To the extent a response is required, this statement is disputed in part. Plaintiffs object to this
statement as immaterial and improperly characterizing the district court’s ruling. Plaintiffs do not
dispute that the quoted language is from Judge Stark’s report and recommendation. Plaintiffs do,
however, object to Defendants’ attempt to re-write Judge Stark’s report and recommendation
(e.g., “all of which Magistrate Judge Stark found supported Forest’s construction.”).
Forest’s Objection: DPPs’ response does not explain how ¶ 290 is “a mixed statement
of fact and law.” DPPs’ response does not explain how ¶ 290 “improperly characteriz[es]” a
public document. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact should
be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Furthermore, Forest does not attempt to “re-write Judge Stark’s report and
recommendation” and instead refers to the language of Judge Stark’s report and recommendation
and cited public documents. O’Shaughnessy Decl. 139, ’703 Patent Litigation, Dkt. No. 373 at
10-11. (“All of these points support the Plaintiffs’ construction and detract from the proposed
constructions of the Defendants.”) (emphasis added).
291. Magistrate Judge Stark construed “prevention of cerebral ischemia” and
“treatment of cerebral ischemia” to mean “prevention of an imbalance of neuronal stimulation
mechanisms” and “an antagonistic intervention with regard to the ... (NMDA) receptor
channels,” respectively. Forest’s former chief intellectual property counsel, Charles Ryan,
testified “a magistrate judge, who is now a federal district court judge, write a comprehensive
Markman opinion, gave us a very strong ruling, and we were prepared to go to trial.”
Public Documents: Ex. 139, ‘703 Patent Litigation, Dkt. No. 373, at 17-20.
Defendants’ Evidence: Ex. 367, Charles Ryan Dep. (Nov. 7, 2017) 369:15-370:4.
Response: Admitted that Magistrate Judge Stark construed “prevention of cerebral
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ischemia” to mean “prevention of an imbalance of neuronal stimulation mechanisms” and
“treatment of cerebral ischemia” to mean “an antagonistic intervention with regard to the ...
(NMDA) receptor channels.”
Admitted that the quoted comment appears in the transcript of Mr. Ryan’s deposition, but
Plaintiffs object to the cited testimony because it constitutes evidence of Forest’s alleged
subjective beliefs, i.e., that Forest believed Judge Stark “gave [Forest] a very strong ruling,” and
that “[Forest was] prepared to go to trial.” Having precluded Plaintiffs from taking discovery on
its subjective beliefs on the patent merits, Forest is precluded from offering evidence regarding
its subjective beliefs of the merits of the infringement litigation having explicitly elected not to
assert a reliance on counsel defense. Litvin Decl. Ex. 444, Forest Disclosure Pursuant to the May
19, 2017 Order at 5 (“Forest does not intend to affirmatively rely on its subjective beliefs to rebut
any argument that (1) its position in the patent case was weak....”).
Forest’s Objection: Forest objects to DPPs’ argument that Forest cannot rely on the
quoted portion of Mr. Ryan’s deposition. DPPs sought to re-depose a witness and insisted on
asking questions relating to Forest’s subjective beliefs despite being told that Forest has no
intention of waiving and would not be waiving the attorney-client privilege by answering DPPs’
questions about the specific document under discussion. In addition, DPPs’ response does not
contest the statement or offer any evidentiary basis to do so. Accordingly, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
292. On September 21, 2009, District Judge Sleet issued a decision agreeing with
Judge Stark’s recommendations on the “cerebral ischemia” issue and nearly every other (save
one minor clerical change).
Public Documents: See generally Ex. 141, ‘703 Patent Litigation, Dkt. No. 426.
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 57.
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Plaintiffs’ Admissions: Ex. 140, Direct Purchaser Class Plaintiffs’ Amended Responses
to Forest’s Request for Admission No. 13, dated Jul. 19, 2017; Ex. 3, Johnston Rep. ¶ 65-
67, Ex. K.
Response: This statement is improperly stated as a mixed statement of fact and law.
To the extent a response is required, this statement is admitted in part, denied in part. Plaintiffs
object to this statement as immaterial and improperly characterizing the district court’s ruling.
Plaintiffs admit that Judge Sleet agreed with Judge Stark’s recommendations on the
interpretation of “cerebral ischemia.” Plaintiffs do, however, deny Defendants’ attempt to re-
write Judge Sleet’s Opinion, e.g., by characterizing the omission of “after Alzheimer’s disease”
as “one minor clerical change.” O’Shaughnessy Decl. Ex. 141 at 5.
Forest’s Objection: DPPs’ response does not explain how ¶ 292 is “a mixed statement
of fact and law.” DPPs’ response does not explain how ¶ 292 “improperly characteriz[es]” a
public document. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact should
be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Furthermore, Forest does not attempt to “re-write Judge Sleet’s Opinion” and instead
refers to the language of the court’s order and cited public document. O’Shaughnessy Decl. II
Ex. 409,’703 Patent Litigation, Dkt. No. 426 at 5. (“The court agrees with the plaintiffs that this
omission appears to be a clerical error or other inadvertent oversight on the part of the
Magistrate Judge.”) (emphasis added). DPPs’ purported expert, Mr. Johnston, agrees and
specifically refers to the omission of “after Alzheimer’s disease” as a “clerical error,” quoting
Judge Sleet’s Opinion: “The District Judge construed ‘Treatment of imbalance of neuronal
stimulation after Alzheimer’s disease,’ to mean ‘an antagonistic intervention with regard to the
excessive inflow of calcium through NMDA receptor channels after Alzheimer’s disease’ based
on a perceived ‘clerical error or other inadvertent oversight’ by the Magistrate Judge with respect
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to the phrase ‘after Alzheimer’s disease.’” O’Shaughnessy Decl. I Ex. 3, Johnston Rep. ¶ 67.
Accordingly, this fact is not in dispute.
C. Settlements and Dismissals
293. When Magistrate Judge Stark issued his Report and Recommendation on July 2,
2009, eleven of the fifteen generic companies Forest had sued remained in the consolidated
patent case: (1) Cobalt, (2) Lupin, (3) Teva, (4) Upsher-Smith, (5) Wockhardt, (6) DRL, (7)
Genpharm, (8) Interpharm/Amneal, (9) Mylan, (10) Sun, and (11) Apotex. As for the other four:
Orchid’s case was transferred to the District of New Jersey in April 2009; Barr and Synthon
withdrew their ANDAs in May 2009, causing Forest to dismiss its Complaints against them; and
in April 2008, Ranbaxy agreed to a consent judgment that the ‘703 patent is valid and Ranbaxy’s
generic product would fall within the claims as construed.
Public Documents: See generally Ex. 142, ‘703 Patent Litigation Docket; see also Ex.
142, ‘703 Patent Litigation Dkt. No. 407 (transferring Orchid to D.N.J.), Ex, 143, Dkt.
No. 329 (dismissing Barr); Ex. 144, Forest Laboratories, Inc. et al. v. Barr Laboratories,
Inc. and Barr Pharmaceuticals, Inc., Case No. 1:08-cv-00052-LPS Dkt. No. 78 (Ranbaxy
consent judgment), Ex. 145, Dkt. No. 87 (dismissing Synthon).
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 69.
Response: This statement is admitted in part, denied in part. Plaintiffs do not dispute
that there were eleven generic companies remaining in the consolidated patent case as of July 2,
2009. Plaintiffs dispute that Forest’s case against Orchid case was transferred to the District of
New Jersey in April 2009; Forest’s case against Orchid was not transferred until Judge Sleet’s
August 27, 2009 Order. O’Shaughnessy Decl. Ex. 142. Plaintiffs do not dispute that Forest’s
cases against Barr and Synthon were dismissed in April 2008. Plaintiffs object to Forest’s
characterization of Ranbaxy’s consent judgment. Ranbaxy did not agree that the ’703 patent was
valid; Ranbaxy merely agreed that “the ‘703 patent is presumed to be valid and enforceable and
Ranbaxy have not rebutted that presumption in this action.” Litvin Decl. Ex. 445, Ranbaxy
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Consent Judgment at 2 (emphasis added). Ranbaxy explicitly contemplated that generic
memantine hydrochloride products may not infringe the ‘703 patent. Id. at 4.
Forest’s Objection: Forest agrees that Forest’s case against Orchid was transferred to the
District of New Jersey on August 27, 2009, although Forest notes that the date of transfer is
immaterial. Accordingly, this fact should be admitted, with that qualification.
Additionally, the consent judgment lists occurrences that may result in Ranbaxy not
being held to the terms of the permanent injunction against selling their generic memantine
hydrochloride product. Litvin Decl. Ex. 445, Ranbaxy Consent Judgment at 4-5. Not one of
those conditions states that Ranbaxy’s generic memantine hydrochloride product may not
infringe the ‘703 patent. Id. Ranbaxy agreed that “[t]he generic products and proposed uses and
indications therefore, as set forth in [Ranbaxy’s] ANDA No. 79-236 fall within the scope of one
or more of the claims of the ‘703 patent as properly construed.” Id. at 2.
With the exception of the qualification as to the date that Forest’s case against Orchid
was transferred to the District of New Jersey, DPPs have not offered evidence that disputes the
statement of fact. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
294. Nine of the eleven remaining generic defendants (Cobalt, Lupin, Teva, Upsher-
Smith, Wockhardt, DRL, Amneal, Sun, and Apotex) reached settlements with Forest by the end
of 2009, i.e., within three months of Judge Sleet’s September 21, 2009 claim construction
decision. The settlements licensed the generics to begin selling generic memantine three months
before the expiration of the ‘703 patent, or three months before the expiration of Forest’s
pediatric exclusivity period, if Forest were to obtain pediatric exclusivity in the future. Forest
dismissed Genpharm from the case on October 9, 2009 after Genpharm withdrew its ANDA in
October 2009. DPPs’ expert, Prof. Elhauge agreed that the terms of the actual settlement
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agreements that Forest entered into is consistent with Forest’s believing it that it had an
extremely high—up to 94.9%—likelihood of success in the patent suit. O’Shaughnessy Decl. Ex.
121, Elhauge Report at ¶ 68.
Public Documents: ‘703 Patent Litigation Dkt. Nos. 409 (Ex. 147), 412 (Ex. 148), 413
(Ex. 149), 415 (Ex. 150), 416 (Ex. 320), 417 (Ex. 151), 418 (Ex. 152), 419 (Ex. 153), 432
(Ex. 154), 434 (Ex. 155), 437 (Ex. 156), 439 (Ex. 157), 450 (Ex. 158), 452 (Ex. 159), 453
(Ex. 160), 458 (Ex. 161), 464 (Ex. 162).
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 60; Ex. 340, Eric Agovino Dep. (Sept.
12, 2017) 86:22-87:7 (“I can’t remember exactly when, but the settlement started to pick
up pace after the Markman decision in this case.”); Ex. 339, Charles Ryan Dep. (Sept. 7,
2017) 186:4-9 (Q. Do you recall when the first settlement inquiries were made in
connection with the patent litigations? A. It was shortly after we had a successful
Markman hearing.”); Ex. 324, David Solomon Dep. (Sept. 7, 2017) 279:20-281:16; Ex.
29, Settlement Agreement between Forest, Merz, and Dr. Reddy’s (FRX-AT-00000001-
037); Ex. 27, Settlement Agreement between Forest, Merz, and Cobalt (FRX-AT-
00000038-061); Ex. 26, Settlement Agreement between Forest, Merz, and Sun (FRX-AT-
00000112-147); Ex. 24, Settlement Agreement between Forest, Merz, and Upsher-Smith
(FRX-AT-00000148-183); Ex. 28, Settlement Agreement between Forest, Merz, and
Teva (FRX-AT-00000184-217); Ex. 22, Settlement Agreement between Forest, Merz,
and Amneal (FRX-AT-00000218-252); Ex. 23, Settlement Agreement between Forest,
Merz, and Apotex (FRX-AT-00000274-298); Ex. 32, Settlement Agreement between
Forest, Merz, Orgenus, and Orchid (FRX-AT-00000380-402); Ex. 25, Settlement
Agreement between Forest, Merz, and Wockhardt (FRX-AT-00000076).
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
incomplete and misleading. Admitted that nine generic defendants settled with Forest before
December 31, 2009: Cobalt (10/15/09, see O’Shaughnessy Decl. Ex. 27); Lupin (12/11/09, see
O’Shaughnessy Decl. Ex. 31); Teva (11/3/09, see O’Shaughnessy Decl. Ex. 28); Upsher-Smith
(9/8/09, see O’Shaughnessy Decl. Ex. 24); Wockhardt (9/10/09, see O’Shaughnessy Decl. Ex.
25); DRL (11/13/09, see O’Shaughnessy Decl. Ex. 29); Amneal (9/1/09, see O’Shaughnessy
Decl. Ex. 22); Sun (10/9/09, see O’Shaughnessy Decl. Ex. 26); and Apotex (9/8/09, see
O’Shaughnessy Decl. Ex. 23). However, denied that the settlements were a direct result of Judge
Sleet’s September 21, 2009 claim construction decision. Forest admits that those generic
defendants settled because they “recognized that there is no financial upside to litigating” rather
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than as a result of concerns about the patent merits. Litvin Decl. Ex. 176, FRX-AT-03882414.
Thus, those generic defendants’ decisions to settle had nothing whatsoever to do with the patent
merits or the claim construction, but rather because there were fourteen first-filers who would
“share [the] 180-day exclusivity.” Id. at FRX-AT-03882418. As a result, “sales and profits for
generic memantine [were going to] be miniscule.” Id. Admitted that Forest dismissed Genpharm
in October 2009. O’Shaughnessy Decl. Ex. 154. Forest mischaracterizes Professor Elhauge’s
testimony; he actually opined that “Under the third scenario, Forest’s actual settlement payoff
exceeds its litigation payoff only if it perceives its likelihood of winning on both the patent
merits and the patent extension to be less than 94.9%.” O’Shaughnessy Decl. Ex. 121, Elhauge
Report ¶ 68. Professor Elhauge in fact says opines that anything in the range of 0% to 94.9%
would be consistent with the settlement. Defendants’ characterization of Professor Elhauge’s
testimony is therefore misleading, as it omits the fact that he also considered extremely low
patent strengths to be consistent with the observed settlement. See id.
Forest’s Objection: DPPs have admitted each part of this statement of fact, and their
only purported denial is about an issue of causation — that the settlements were caused by the
claim construction ruling — not presented in the statement. Thus, DPPs’ response consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response attempts to “contextualize . . . the statement,” but does not challenge any aspect of the
statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
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295. Within two months of Judge Sleet’s opinion, just two generics remained in the
consolidated case in the District of Delaware: Mylan and Lupin. Lupin settled by the end of the
year, leaving only Mylan. Orchid, which had been transferred to the District of New Jersey,
settled in April 2010.
Public Documents: Ex. 163, ‘703 Patent Litigation, Dkt. No. 466; Ex. 146, Forest
Laboratories, Inc., et al. v. Orgenus Pharma Inc., et al., Case No. 3:09-cv-05105-
MLCDEA (D. N. J.), Dkt. No. 26.
Defendants’ Evidence: Ex. 5, McKelvie Rep. ¶ 61; Ex. 31, Settlement Agreement
between Forest, Merz, and Lupin (FRX-AT-00000340-362).
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, ¶ 51; Ex. 3,
Johnston Rep. ¶ 69.
Response: Admitted in part, denied in part. Plaintiffs do not dispute that by
December 21, 2009 (i.e., two months after Judge Sleet’s opinion), Lupin and Mylan remained in
the consolidated case. The Orchid Settlement Agreement (O’Shaughnessy Decl. Ex. 32) was
dated March 23, 2010.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
296. The timing of the non-Mylan settlements is as follows:
Date Event
July 2, 2009 Judge Stark’s Claim Construction Decision
September 2, 2009 Amneal settlement
September 8, 2009 Upsher-Smith settlement
September 9, 2009 Apotex settlement
September 10, 2009 Wockhardt settlement
September 21, 2009 Judge Sleet’s Claim Construction Decision
October 8, 2009 Genpharm dismissed (ANDA withdrawn)
October 9, 2009 Sun settlement
October 19,2009 Cobalt settlement
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November 5, 2009 Teva settlement
December 14, 2009 DRL settlement
February 11, 2010 Lupin settlement
April 26, 2010 Orchid settlement (after transfer to D.N.J. in
March 2009)
Public Documents: ‘703 Patent Litigation Dkt. Nos. 409 (Ex. 147), 412 (Ex. 148), 413
(Ex. 149), 415 (Ex. 150), 416 (Ex. 320), 417 (Ex. 151), 418 (Ex. 152), 419 (Ex. 153), 432
(Ex. 154), 434 (Ex. 155), 437 (Ex. 156), 439 (Ex. 157), 450 (Ex. 158), 452 (Ex. 159), 453
(Ex. 160), 458 (Ex. 161), 464 (Ex. 162).
Defendants’ Evidence: Ex. 29, Settlement Agreement between Forest, Merz, and Dr.
Reddy’s (FRX-AT-00000001-037); Ex. 27, Settlement Agreement between Forest, Merz,
and Cobalt (FRX-AT-00000038-061); Ex. 26, Settlement Agreement between Forest,
Merz, and Sun (FRX-AT-00000112-147); Ex. 24, Settlement Agreement between Forest,
Merz, and Upsher-Smith (FRX-AT-00000148-183); Ex. 28, Settlement Agreement
between Forest, Merz, and Teva (FRX-AT-00000184-217); Ex. 22, Settlement
Agreement between Forest, Merz, and Amneal (FRX-AT-00000218-252); Ex. 23,
Settlement Agreement between Forest, Merz, and Apotex (FRX-AT-00000274-298); Ex.
31, Settlement Agreement between Forest, Merz, and Lupin (FRX-AT-00000340-362);
Ex. 32, Settlement Agreement between Forest, Merz, Orgenus, and Orchid (FRX-AT-
8700000380-402); Ex. 25, Settlement Agreement between Forest, Merz, and Wockhardt
(FRX-AT-00000076).
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, ¶¶ 23, 37,
51, 65, 79, 92, 106; Ex. 3, Johnston Rep. ¶ 69.
Response: Denied. The information in this chart is disputed as inaccurate and
incomplete. Forest conflates the “settlement” with the stipulation and dismissal dates. The
“settlements” (i.e., the settlement agreements) are dated as follows: O’Shaughnessy Decl. Ex.
22, Amneal Settlement Agreement, dated September 1st, 2009; O’Shaughnessy Decl. Ex. 23,
Apotex Settlement Agreement, dated September 8th, 2009; O’Shaughnessy Decl. Ex. 24,
Upsher-Smith Settlement Agreement, dated September 8th, 2009; O’Shaughnessy Decl. Ex. 25,
Wockhardt Settlement Agreement, dated September 10th, 2009; O’Shaughnessy Decl. Ex. 26,
Sun Settlement Agreement, dated October 9th, 2009; O’Shaughnessy Decl. Ex. 27, Cobalt
Settlement Agreement, dated October 15th, 2009; O’Shaughnessy Decl. Ex. 28, Teva Settlement
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Agreement, dated November 3rd, 2009; O’Shaughnessy Decl. Ex. 29, Dr. Reddy’s Settlement
Agreement, dated November 13th, 2009; O’Shaughnessy Decl. Ex. 30, Torrent Settlement
Agreement, dated December 7th, 2009; O’Shaughnessy Decl. Ex. 31, Lupin Settlement
Agreement, dated December 11th, 2009; O’Shaughnessy Decl. Ex. 32, Orchid Settlement
Agreement, dated March 23rd, 2010; O’Shaughnessy Decl. Ex. 33, Mylan Settlement
Agreement, dated July 21st, 2010.
Forest’s Objection: Forest agrees that the chart reflects the dismissal dates and DPPs
accurately list the settlement agreement dates. Thus, the timing of the non-Mylan settlements is
as follows:
Date Event
July 2, 2009 Judge Stark’s Claim Construction Decision
September 1, 2009 Amneal settlement
September 8, 2009 Upsher-Smith settlement
September 8, 2009 Apotex settlement
September 10, 2009 Wockhardt settlement
September 21, 2009 Judge Sleet’s Claim Construction Decision
October 8, 2009 Genpharm dismissed (ANDA withdrawn)
October 9, 2009 Sun settlement
October 15,2009 Cobalt settlement
November 3, 2009 Teva settlement
November 13, 2009 DRL settlement
December 11, 2009 Lupin settlement
March 23, 2010 Orchid settlement (after transfer to D.N.J. in
March 2009)
As the parties no longer appear to be in dispute over the facts, the fact should be deemed
admitted.
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D. The Mylan Litigation
297. Forest and Merz and Mylan filed a joint pretrial order on February 26, 2010,
which included witness lists and proposed findings of fact and conclusions of law from both
Forest and Mylan
Defendants’ Evidence: Ex. 166, Pretrial Order.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 70
Response: Admitted. This statement, however, is not material for purposes of
summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Infringementi.
298. Forest and Merz argued that the use of Mylan’s generic memantine product by
physicians or patients would infringe the asserted claims of the ‘703 patent and that Mylan also
induced or contributed to that infringement.
Public Documents: Ex. 135, Forest Laboratories Inc. v. Dr. Reddy’s Laboratories Inc. et
al., Case No. 1:08-cv-00052-LPS, Dkt. No. 1; Ex. 167, Forest Laboratories Inc. v. Dr.
Reddy’s Laboratories Inc. et al., Case No. 1:08-cv-00052-LPS, Dkt. No. 31.
Defendants’ Evidence: Ex. 166, Pretrial Order, Exhibit 12, ¶ 35.
Response: This statement is admitted in part, denied in part. Plaintiffs object to this
statement as potentially misleading and incomplete. Forest and Merz did not argue that Mylan
directly infringed any of the asserted claims of the ’703 patent; Forest and Merz only argued that
Mylan induced or contributed to infringement of the asserted claims. Further, this statement is
not material for purposes of summary judgment because this purported fact is not cited anywhere
in Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
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which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
299. Forest and Merz planned to call expert witnesses Dr. Rachelle Doody and Dr.
Roberto Malinow to address infringement.
Defendants’ Evidence: Ex. 166, Pretrial Order, Exhibit 7 and Exhibit 9 (Dr. Doody was
expected to testify as to whether users of Mylan’s generic product would “infringe any of
88 the asserted claims of the ‘703 patent” and “whether Mylan [would] induce or
contribute to such infringement[.]” Dr. Malinow was expected to address “memantine’s
mechanism of action, its neurobiological characteristics, and preclinical aspects of
Alzheimer’s disease[.]”
Response: Admitted in part, denied in part. Plaintiffs admit only, that Dr. Rachelle
Doody and Dr. Roberto Malinow appeared on Forest and Merz’s Expert Witness List, with the
statement that “[s]ubject to the availability of each witness at the time of trial, and any future
stipulations entered into by the parties, Plaintiffs will call the following expert witnesses ....”
O’Shaughnessy Decl. Ex. 166 at Ex. 9. Plaintiffs further note that Mylan had filed a motion to
strike Dr. Malinow’s opinions about infringement as untimely. Forest Laboratories Inc. et al v.
Lupin Pharmaceuticals Inc. et al., Case No. 1:08-cv-00021-LPS, (“‘703 Patent Litigation”) (ECF
No. 469). Accordingly, it is denied as to whether he would have been permitted to present those
opinions at trial. Further, this statement is not material for purposes of summary judgment
because this purported fact is not cited anywhere in Defendants’ Memorandum In Support of
their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
300. Mylan offered Dr. John Olney to address infringement.
Defendants’ Evidence: Ex. 166, Pretrial Order, Exhibit 8 and Exhibit 10 (“Dr. Olney
[was] expected to testify that Mylan’s proposed memantine hydrochloride ANDA
product (and methods for its administration) [would] not infringe the asserted claims of
the ‘703 patent. . . .”).
Response: Admitted, although Mylan identified a wealth of evidence beyond Dr.
Olney’s testimony. O’Shaughnessy Decl. Ex. 166 at Ex. 12 ¶¶ 88-118. ¶ 300, however, is not
material for purposes of summary judgment because this purported fact is not cited anywhere in
Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
301. Dr. Olney opined that the dosages of memantine indicated in Mylan’s package
insert would not “approach levels necessary to prevent an imbalance of neuronal stimulation
mechanisms” or act as an NMDA receptor antagonist. However, Dr. Olney admitted in his
deposition that memantine does antagonize NMDA receptors, and that the majority of the
scientific community does not question memantine’s mechanism of action in humans.
Defendants’ Evidence: Ex. 168, Rebuttal Expert Report of John Olney, M.D.,
MNAT_0001112-1157 (“Olney Rep.”) ¶ 66.
Undisputed Record Evidence: Ex. 342, Deposition Testimony of John Olney (“Olney
Dep.”) (Jan. 29, 2010) (MYLMEMA_005665-739) 63:15-20, 112:16-114:12 (testifying
that the scientific community does not question that memantine is an NMDA antagonist
at an effective dose).
Response: Denied. Plaintiffs object to this statement as incomplete and misleading.
Plaintiffs do not dispute that Dr. Olney’s report included the quoted language. Dr. Olney
explained during his deposition that memantine antagonizes NMDA receptors at a very high
dose that’s not used with Alzheimer’s patients, O’Shaughnessy Decl. Ex. 342 at 107:16-108:8
(Olney Dep.), and “[i]f memantine is not being used in Alzheimer’s disease at a dose that
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actually does interact with the NMDA receptor, then that is a pretty severe limiting factor that is
of overriding importance.” O’Shaughnessy Decl. Ex. 342 at 113:1-5. Dr. Olney further explained
that “[t]he medical community in a clinical sense uses memantine to treat Alzheimer’s disease
and they don’t really have an opinion regarding whether it’s effective as an NMDA antagonist.”
Id. at 113:22-25 (emphasis added). Accordingly, Dr. Olney’s testimony does not indicate that the
scientific community has considered and accepted that memantine functions as an NMDA
receptor antagonist at the relevant doses.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
302. The scientific community agrees that memantine works through NMDA receptor
antagonism. Forest’s experts Dr. Malinow, Dr. Farlow, and Dr. Doody all would have testified
that NMDA receptor antagonism is memantine’s accepted mechanism of action.
Defendants’ Evidence: See generally Ex. 169, Supplemental Expert Report of Roberto
Malinow, M.D., Ph.D., MNAT_0000937-945 (“Malinow Supp. Rep.”); Ex. 170,
Opposition Expert Report of Martin R. Farlow, M.D., MNAT_0000524-656 (“Farlow
Rep.”) ¶ 158; Ex. 171, Expert Report of Dr. Rachelle S. Doody Regarding Mylan,
MNAT_0000411-523 (“Doody Rep.”) ¶ 93.
Plaintiffs’ Admissions: Ex. 343, Deposition of Nathan Herrmann (“Herrmann Dep.”)
(Nov. 2, 2017) 59:19-60:6, 60:15-20 (testifying that the vast majority of the scientific
community accepts the proposition that memantine’s mechanism of action in Alzheimer’s
patients is NMDA receptor antagonism); Ex. 344, Deposition of Lon S. Schneider, M.D.
(“Schneider Dep.”) (Oct. 27, 2017) 50:15-22, 53:14-18 (“... Do you have any reason to
disagree that Memantine’s action is an NMDA antagonist?...” “... I have no reason to
disagree with it.”)
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Undisputed Record Evidence: Ex. 345, Deposition Testimony of Jerry Joseph
Buccafusco (“Buccafusco Dep.”) (Jan. 19, 2010) (MYLMEMA_005595-664) 28:18-
29:11 (testifying that the proposed mechanism of action of the compound in the ‘703
patent is “the ability of adamantane derivatives particularly memantine to interact with
the NMDA subtype of glutamate receptor and inhibit its function” which he believed is
“one of the mechanisms of action” for memantine.); Ex. 346, Deposition Testimony of
Paul Spencer Fishman (“Fishman Dep.”) (Jan. 20, 2010) (MYLMEMA_005089-155)
89:12-17 (“It is said in the product label” that Namenda operates through an NMDA
receptor channel antagonism.”); Ex. 342, Olney Dep. 63:15-20,112:16-113:25, 114:1-12
(testifying that the scientific community does not question that memantine is an NMDA
antagonist at an effective dose).
Response: Denied. Dr. Olney cited several papers to the contrary, as has Dr.
Herrmann. For example, the article Catherine Creeley et al., “Low Doses of Memantine Disrupt
Memory in Adult Rats,” The Journal of Neuroscience (2006) 26(15):3923-3932 states the
following:
“The suggestion that memantine, in human AD patients, can enter the brain in
concentrations sufficient to block NMDA receptors and, as a result, can
selectively produce desired antiexcitotoxic beneficial effects that include
improvement of cognitive functions while bypassing all side effects is
inconsistent with the bulk of research information pertaining to NMDA antagonist
drugs.”
“The fact that AD patients can be given memantine at a dose of 20 mg/d without
incurring any NMDA antagonist type of side effect suggests that this dose
produces concentrations of memantine in the human brain that are below the
threshold for NMDA receptor antagonism.”
“[B]oth animal and human data support the interpretation that memantine does
not produce intolerable side effects in human AD patients because it is being used
at doses that are below the threshold for interacting with NMDA receptors.”
“if our interpretation is correct, it is untenable to maintain that memantine arrests
neurodegeneration in AD, or has any other beneficial effect in AD, by blocking
NMDA receptors.” Litvin Decl. Ex. 446, FRX -AT-02713330.
Plaintiffs deny what Forest’s experts Dr. Malinow, Dr. Farlow, and Dr. Doody “would
have testified” to. Dr. Malinow may have been precluded from testifying on infringement issues
because, as explained infra, a motion was pending to strike his untimely report on infringement
issues.
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Forest’s Objection: DPPs’ response citing a single article does not refute the point that
the scientific community generally agrees that memantine works through NMDA receptor
antagonism — a fact that both Mylan’s and DPPs’ experts also agree with Forest’s experts on.
See documents cited in DRSUF ¶ 302.
DPPs’ response consists of improper argument or a recitation of different purported facts,
but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
303. Mylan admitted in an interrogatory response that memantine, the active ingredient
in Mylan’s product, worked through NMDA receptor antagonism: “the mechanism of action by
which memantine works is that of an NMDA receptor antagonism....”
Defendants’ Evidence: Ex. 172, Mylan’s Supplemental Response to Plaintiffs’
Interrogatory No. 2, FRX-AT-04228504-556 at FRX-AT-04228539; Ex. 166, Pretrial
Order, Exhibit 11, ¶ 80.
Response: Plaintiffs admit that the cropped quotation identified by Forest is present
in Mylan’s interrogatory response. However, the manner in which Forest has cropped the
quotation renders it misleading. First, elsewhere in the same set of interrogatory responses,
Mylan wrote: “Mylan will not directly or indirectly infringe claim 1 because Mylan’s proposed
label does not indicate the use of memantine according to the particular mechanism of action
covered by claim 1. As construed by the Court, claim 1 covers the use of memantine to cause an
antagonistic intervention with regard to ‘the [NMDA] receptor channels.’ Memantine, however,
has other mechanisms of action – not covered by claim 1 – that are partly, primarily, or
exclusively responsible for the effects of memantine in patients diagnosed with Alzheimer’s
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disease.” Litvin Decl. Ex. 448, Mylan’s Supplemental Responses and Objections to Plaintiff’s
First Set of Collective Interrogatories to Defendants (Nos. 1-4) at FRX-AT-04228522 (emphasis
added). Thus, to the extent Forest’s cropped quotation is intended to suggest that Mylan admitted
that at the relevant dose (i.e., 20 mg per day) memantine’s mechanism of action in patients
suffering from Alzheimer’s disease is NMDA receptor antagonism, Plaintiffs dispute Forest.
Moreover, the entire portion of Mylan’s response – as opposed to just the portion cropped by
Forest – merely indicates that Mylan’s position was that to the extent memantine’s mechanism of
action is NMDA receptor antagonism, that mechanism of action is inherently the same as the
prior art. Id. at FRX-AT-04228539; see also Litvin Decl. Ex., Johnston Reply Report ¶¶ 30-33
(interpreting Mylan’s interrogatory response).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
304. Mylan’s proposed prescribing information and other ANDA submissions to the
FDA recognized that memantine works as an NMDA receptor antagonist.
Defendants’ Evidence: Ex. 171, Doody Rep. ¶ 22-24.
Undisputed Record Evidence: Ex. 173, MYLMEMA_000343 (“Memantine
hydrochloride is an orally active N-methyl-D-aspartate (NMDA) receptor antagonist
which is used for the treatment of moderate to severe dementia of the Alzheimer’s
type.”); Ex. 174, MYLMEMA_000855; Ex. 175, MYLMEMA_000959; Ex. 176,
MYLMEMA_001181, 1207 (“Memantine hydrochloride is an orally active NMDA
receptor antagonist”) (“Memantine hydrochloride is a low to moderate affinity
uncompetitive NMDA antagonist”); Ex. 177, MYLMEMA_001824 (“Memantine is a 90
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low-moderate affinity, uncompetitive N-methyl-D-aspartate (NMDA) receptor antagonist
with strong voltage dependency...”).
Response: This statement is denied as immaterial to the issue of infringement. Mylan
explained in its Pre-Trial brief with respect to the language in its ANDA submissions, “[b]y
statute Mylan must use the identical language present in the branded product’s package insert,”
and so “Mylan’s proposed packaged insert merely copies certain information contained in
Namenda’s package insert (including information related to memantine’s hypothesized
mechanism of action).” O’Shaughnessy Decl. Ex. 166, Pretrial Order, Exhibit 12, ¶ 118.
Moreover, nowhere in Mylan’s proposed prescribing information and other ANDA submissions
does it state that memantine “works as an NMDA receptor antagonist” at the relevant dose.
Statements to the effect that memantine belongs to the class of NMDA receptor antagonists at
most would suggest that memantine antagonizes NMDA receptor antagonists when present at a
high enough dose, not that the relevant dose reached this threshold. Further, this statement is not
material for purposes of summary judgment because this purported fact is not cited anywhere in
Defendants’ Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
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Anticipationii.
305. Mylan identified five references for its anticipation argument: (1) Ambrozi; (2)
Memantine improves the cerebral performance in
the elderly, Psycho. 12:8-18 (1984); and (5) Fünfgeld (1988). The PTO considered at least
Ambrozi, Marcea, Tempel, and Fünfgeld.
Public Documents: Ex. 7, ‘703 Reexam File History, e.g. p. 5, 28, 46, 62, 115, 176, and
177.
Defendants’ Evidence: Ex. 166, Pretrial Order, Exhibit 12, ¶ 133; Ex. 178, Fishman Rep.
¶¶ 27-50.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶¶ 128, 130; Ex. 344, Deposition Testimony
of Lon Schneider (“Schneider Dep”) (Oct. 27, 2017) 30:4-15.
Response: Admitted in part, denied in part. Plaintiffs object to this statement as
misleading and incomplete. Plaintiffs admit that Mylan’s expert, Dr. Fishman, identified the five
above-identified references in his expert report, as anticipating the asserted claims of the ’703
Patent. O’Shaughnessy Decl. Ex. 178 (Fishman Report). None of these references, however, was
before the PTO during the prosecution of the original claims. See O’Shaughnessy Decl. Ex. 2
(’703 Patent, “References Cited”). In 2004, Merz submitted a “Request for Reexamination” in
which it identified, among others, Marcea and Ambrozi. O’Shaughnessy Decl. Ex. 7, ‘703
Reexam File History. After institution of a reexamination, Merz submitted an Information
Disclosure Statement (“IDS”), which identified Fünfgeld and Tempel, among others.
O’Shaughnessy Decl. Ex. 7, ‘703 Reexam File History.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
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the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
306. None of the references expressly disclosed a treatment of patients diagnosed with
Alzheimer’s disease, as characterized by the Diagnostic and Statistical Manual of Mental
Disorders, version III-R.
Defendants’ Evidence: Ex. 347, Deposition Testimony of David A. Greenberg, M.D.,
Ph.D. (Feb. 18, 2010) (“Greenberg Dep.”) (FRX-AT-04578462-FRX-AT-04578493)
39:1-17 (testifying that “organic brain syndrome” is a very nonspecific term and not
dispositive as to whether or not an individual has Alzheimer’s disease); Ex. 170, Farlow
Rep. ¶¶ 68, 72-77, 81; Ex. 166, Pretrial Order, Exhibit 11, ¶¶ 115-26.
Plaintiffs’ Admissions: Ex. 344, Schneider Dep. 135:11-136:10 (“[D]oes the paper
[Ambrozi] say this – at least one person or does the paper say these participants have
been diagnosed with Alzheimer’s disease? That quote – flat line doesn’t exist.”), 156:15-
157:1 (“I agree with you that it [Schafer] does not say the word ‘Alzheimer’s disease.’ It
does not say these patients had Alzheimer’s disease.”), 169:24-170:10 (“Similarly, there
is – there is no individual patient there [Marcea and Tempel] identified as – having
Alzheimer’s disease.”)
Undisputed Record Evidence: Ex. 346, Fishman Dep. 77:2-11, 78:9-23.
Response: Admitted in part, denied in part. First, this statement is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435). Second, this
statement is denied. Fünfgeld (1988) expressly discloses “[p]atients with different types of
dementia – diagnosed as Alzheimer, senile or multi-infarct dementia – were investigated” and
“SDAT,” i.e., senile dementia of the Alzheimer’s Type. Litvin Decl. Ex. 450, FRX-AT-
03498285-89 at 88 (Fünfgeld). Moreover, Ambrozi discusses a clinical trial testing “whether
Memantine has the ability to influence the mnestic [i.e., memory] disorders characteristic of
dementia as one category of the organic mental disorders (DSM-III).” Litvin Decl. Ex. 449,
FRX-AT-00106088 (Ambrozi). Marcea references patients having symptoms “established in
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accordance with the criteria of ICD.9 (Nr. 290.0, 290.1, 290.4).” Litvin Decl. Ex. 451, Torrent-
memantine 00009229 at -230 (Marcea). Dr. Schneider opines that “[t]he ICD-9 codes 290.0 and
290.1 correspond to primary degenerative dementia of the Alzheimer type (senile and presenile
onset, respectively; codes 290.00 and 290.10) in the DSM-III-R. The ICD codes constitute
‘accepted diagnostic criteria’ such as those set forth in the DSM-III-R, and as such is an express
disclosure of this diagnosis (Alzheimer’s disease) to a person of ordinary skill in the art who
would know the ICD codes and who knows what ICD-9 codes 290.0 and 290.1 mean.” Litvin
Decl. Ex. 325, Schneider Reply Report at ¶ 8.
Forest’s Objection: Forest is unclear whether DPPs’ admit or deny ¶ 306 as DPPs’ first
state the fact is “[a]dmitted in part, denied in part,” but then state “this statement is denied.” To
the extent DPPs’ deny ¶ 306, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. DPPs cite no evidence that the references expressly disclose
treatment of patients diagnosed with Alzheimer’s disease as characterized by the Diagnostic and
Statistical Manual of Mental Disorders, version III-R. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
307. Mylan’s anticipation expert, Dr. Fishman did not mention NMDA receptors in his
report. He testified in his deposition that he “did not consider” whether patients receiving
memantine in the prior art on which he relied experienced NMDA receptor antagonism, and that
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he saw “no direct evidence in those articles whether or not patients are being treated for an
imbalance of neuronal—I didn’t see any evidence for that claim.”
Plaintiffs’ Admissions: See generally Ex. 178, Expert Report of Paul Spencer Fishman,
MNAT_0000657-722 (“Fishman Rep.”)
Undisputed Record Evidence: Ex. 346, Fishman Dep. 76:22-78:23.
Response: Admitted in part, denied in part. First, this statement is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435). Second,
Plaintiffs object to this statement as immaterial because Mylan argued that memantine’s
mechanism of action (NMDA receptor antagonism) was inherent in the prior art: “Schafer &
Thiery, Marcea & Tempel, Ambrozi & Danielczyk, Tempel and Fünfgeld (1988) all necessarily
result in the same effect of the method being claimed: memantine hydrochloride acts on the
patient according to its naturally occurring mechanism of action.” O’Shaughnessy Decl. Ex. 166,
Pretrial Order, Exhibit 12, ¶ 159 (emphases added); O’Shaughnessy Decl. Ex. 178 at ¶ 57
(Fishman Report). Accordingly, whatever memantine’s mechanism of action is, it is necessarily
present whether memantine is administered before or after April 1989. Litvin Decl. Ex. 273,
Farlow Dep. (Nov. 11, 2017) at 98:9-14; 99:22-100:12; 101:6-12; 102:11-17; 103:2-15. Forest
did not argue that the mechanism of action was not inherent during the Namenda Patent
Litigation. See, e.g., O’Shaughnessy Decl. Ex. 166, Pretrial Order, Exhibit 11.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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Obviousnessiii.
308. Mylan’s obviousness theory was based on the same articles it identified in its
anticipation argument.
Defendants’ Evidence: Ex. 166, Pretrial Order, Exhibit 12, ¶¶ 133-34, 159; Ex. 178,
Fishman Rep. ¶ 57.
Response: Denied. Mylan identified several additional the references as “pertinent
prior art to the ‘703 patent” in its Pretrial Brief including Fleischhacker and the Rote Liste.
O’Shaughnessy Decl. Ex. 166, Pretrial Order, Exhibit 12, ¶ 169. Mylan then asserted that
“[t]here are no differences between the prior art and the asserted claims, as established by fact
and expert witness testimony and documentary evidence.” O’Shaughnessy Decl. Ex. 166,
Pretrial Order, Exhibit 12, ¶ 171.
Forest’s Objection: Mylan focused its obviousness case on the identified articles — its
Pretrial Order and expert testimony both primarily relied on the identified articles. See
O’Shuaghnessy Decl. I Ex. 166, Pretrial Order at Exhibit 12, ¶¶ 133, 159; O’Shaughnessy Decl. I
Ex. 178, Fishman Rep. ¶ 57. That Mylan cursorily listed other references as “pertinent prior art”
does not dispute the fact that Mylan’s obviousness theory was primarily based on the same
articles it identified in its anticipation argument. Accordingly, the fact should be deemed
admitted.
309. Mylan’s expert Dr. Fishman opined that one of ordinary skill in the art would
have known to administer memantine to patients with Alzheimer’s disease because the patients
treated with memantine in Mylan’s identified studies likely included individuals with
Alzheimer’s disease.
Defendants’ Evidence: Ex. 178, Fishman Rep. ¶¶ 57-58.
Response: Admitted in part, denied in part. First, this statement is not material for
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purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435). Second,
Plaintiffs object to this statement as inaccurate and potentially misleading. Dr. Fishman opined
that “patients suffering from Alzheimer’s disease are included among patients with a diagnosis
of OBS” – not that such patients are “likely included,” as stated above. O’Shaughnessy Decl. Ex.
178 at ¶ 57 (Fishman Report) (emphases added).
Forest’s Objection: DPPs’ ignore that the quote they cite from Dr. Fishman’s report
relied on additional detail from other parts of Dr. Fishman’s report. See O’Shaughnessy Decl. I
Ex. 178 at ¶ 57 (“As discussed in detail above, one of ordinary skill in the art would have known.
. . .”) (emphasss added). As stated previously, and as Dr. Fishman agreed, “[n]one of the
references expressly disclosed a treatment of patients diagnosed with Alzheimer’s disease, as
characterized by the Diagnostic and Statistical Manual of Mental Disorders, version III-R.” See
¶ 306; O’Shaughnessy Decl. Ex. I 346, Fishman Dep. 77:2-11, 78:9-23. Thus, Dr. Fishman’s
quote does not support the assertion that “patients suffering from Alzheimer’s disease are
included among patients with a diagnosis of OBS.”
310. Separately, Mylan’s expert Dr. Buccafusco opined that it would have been
obvious to administer memantine to patients with Alzheimer’s disease based on the fact that a
different molecule, amantadine, had previously been administered to patients with Alzheimer’s
disease prior to 1989.
Defendants’ Evidence: See generally Ex. 179, Expert Report of Jerry Joseph
Buccafusco, MNAT_0000333-388 (“Buccafusco Rep.”)
Response: Denied. However, ¶ 310 is not material for purposes of summary
judgment because this purported fact is not cited anywhere in Defendants’ Memorandum In
Support of their Motion for Summary Judgment (ECF No. 435). Second, ¶ 310 is also immaterial
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because Plaintiffs are not relying on this invalidity theory in the antitrust litigation.
Forest’s Objection: DPPs’ response consists of no evidentiary basis to contest the
statement. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
311. No prior art to the ‘703 patent makes any express statement regarding
memantine’s ability to antagonize NMDA receptors. Neither Dr. Buccafusco nor Dr. Fishman
offered any opinion in their report as to why memantine’s NMDA receptor antagonism would
have been obvious.
Defendants’ Evidence: Ex. 347, Greenberg Dep. 93:20-94:5; Ex. 166, Pretrial Order,
Exhibit 11, ¶ 129; Ex. 170, Farlow Rep. ¶¶ 53-60; see also Ex. 178, Fishman Rep. and
Ex. 179, Buccafusco Rep.
Response: Admitted in part, denied in part. First, this statement is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435). Second,
Plaintiffs object to this as immaterial because Mylan argued that the mechanism of action was
inherent, O’Shaughnessy Decl. Ex. 166, Pretrial Order, Exhibit 12, ¶ 159; accordingly, their
expert proffered this opinion, O’Shaughnessy Decl. Ex. 178 at ¶ 56 (Fishman Report). Third,
Plaintiffs object to this as misleading. Prior art references (such as U.S. Patent 4,122,193 and the
Schneider reference) recognized that memantine was used in the treatment of Parkinson’s
disease, and the Olney reference recognized that antiparkinsonian drugs showed NMDA
antagonistic activity. See Litvin Decl. Ex. 453, Schneider et al., Effects of Oral Memantine on
Symptoms of Parkinson’s Disease, Dtsch. Med. Wschr. 109, 987 (1984); Litvin Decl. Ex. 452,
Olney et al., Anti-parkinsonian agents are phencyclidine agonists and N-methyl-aspartate
antagonists, European J. Pharmacol. 142, 319 (1987); see also O’Shaughnessy Decl. Ex. 181 at ¶
45 (Malinow Report) (prior to 1989, “[o]ne of the pathophysiological mechanisms believed to
underlie Alzheimer’s disease was an overstimulation of NMDA receptors.”).
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Forest’s Objection: DPPs’ cited evidence does not dispute the statement.
O’Shaughnessy Decl. I Ex. 178, Fishman Rep. at ¶ 56 merely states that “memantine
hydrochloride acts on the patient according to its naturally occurring mechanism of action.” Dr.
Fishman does not mention NMDA receptors in his report and accordingly does not offer an
opinion on how NMDA receptor antagonism would have been obvious in memantine
hydrochloride. See O’Shaughnessy Decl. II Ex. 381, Johnston Dep. 69:9-70:1. DPPs’ response
thus consists of improper argument or a recitation of different purported facts, but no evidentiary
basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
312. Prior to 1989, memantine was believed to be a dopamine agonist. Dr. Buccafusco
testified that “it would be—would have been surprising [to person of skill in the art that
memantine acted through an NMDA mechanism of action]. It was surprising to me when I first
heard about it.
Defendants’ Evidence: Ex. 345, Buccafusco Dep. 30:14-31:4.
Response: Admitted in part, denied in part. First, this statement is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435). Second,
Plaintiffs further object to this statement as immaterial because Mylan argued that the
mechanism of action was inherent, O’Shaughnessy Decl. Ex. 166, Pretrial Order, Exhibit 12, ¶
159; accordingly, their experts proffered this opinion, O’Shaughnessy Decl. Ex. 178 at ¶ 56
(Fishman Report). Third, Dr. Buccafusco does not necessarily possess the knowledge of all of
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the relevant references (including the references cited in the above response), but a person of
ordinary skill in the art would have known of those references. Accordingly, while Dr.
Buccafusco may have found the mechanism of action surprising, a person of ordinary skill in the
art in 1989 would not have found it surprising in view of the above cited references.
Forest’s Objection: DPPs cite no evidence to show that “a personal of ordinary skill in
the art in 1989 would not have found it surprising in view of the above cited references,” and
therefore DPPs’ conjecture alone cannot create a genuine issue as to this fact. DPPs’ response
consists of improper argument or a recitation of different purported facts, but no evidentiary
basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
313. Plaintiffs’ purported expert witness George Johnston admitted, “Mylan did not
present a strong rebuttal to Forest and Merz’s arguments on secondary considerations” of
nonobviousness.
Plaintiffs’ Admissions: Ex. 3, Johnston Rep. ¶ 185.
Response: Admitted in part, denied in part. First, this statement is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435). Second,
Plaintiffs object to this statement as misleading. Mylan rebutted Forest and Merz’s arguments on
secondary considerations. See, e.g., Litvin Decl. Ex. 454, Boghigian Report; O’Shaughnessy
Decl. Ex. 166, Pretrial Order, Exhibit 12, ¶¶ 8, 173-176, 266-269. Mr. Johnston opined that
Mylan made “a strong showing that the claimed subject matter was prima facie obvious,”
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O’Shaughnessy Decl. Ex. 3 a ¶ 170 (Johnston Report), and that “[s]econdary considerations,
however, tend not to overcome cases involving a strong showing of prima facie obviousness.” id.
at ¶ 185. Third, Plaintiffs object to this statement as incomplete. Specifically, with respect to the
above-cited sentence, Mr. Johnston concluded with a footnote that states “[w]hile Mylan would
have had the opportunity to present a more substantial rebuttal at trial, my estimate is based on
the conservative assumption that Mylan’s rebuttal evidence would not be substantial.” Id. at n.
75 (emphasis added).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
Enablementiv.
314. Mylan and its experts Dr. Buccafusco and Dr. Greenberg contended that a person
of ordinary skill in the art would not have been convinced that an NMDA receptor antagonist
would be beneficial for Alzheimer’s disease. Mylan argued that “[e]nablement is also closely
related to the utility requirement under 35 U.S.C. § 101, ‘prevent[ing] mere ideas from being
patented.’” According to Mylan, “enablement requires that the patent’s written description
disclose a credible and practical utility of the invention at the time of filing of the application.”
Mylan claimed that the ‘703 patent did not do so because its data suggested to persons of skill in
the art that memantine would not treat Alzheimer’s disease and might actually be harmful for
Alzheimer’s patients.
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Defendants’ Evidence: Ex. 166, Pretrial Order, Exhibit 12, ¶ 179-180; Ex. 179,
Buccafusco Rep. ¶¶ 22-25; Ex. 180, Expert Report by David A. Greenberg,
MNAT_0001158-184 (“Greenberg Rep.”) ¶¶ 12-17.
Response: Admitted in part, denied in part. this statement is not material for purposes
of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Plaintiffs admit that Dr. Buccafusco’s report includes the second above-identified
quotation.
Plaintiffs object to the first quotation, as none of the citations provided include the first
quotation. Plaintiffs further object to the last sentence as inaccurate and misleading. Mylan did
not claim “that the ‘703 patent did not do so because its data suggested to persons of skill in the
art that memantine would not treat Alzheimer’s disease and might actually be harmful for
Alzheimer’s patients.” (emphasis added). Instead, Mylan contended that a person of ordinary
skill in the art would not understand memantine to be useful as a therapeutic agent in the
treatment of patients diagnosed with Alzheimer’s disease via NMDA receptor antagonism as
required by the claims. See, e.g., O’Shaughnessy Decl. Ex. 179 at ¶¶ 23, 24 (Buccafusco Report);
O’Shaughnessy Decl. Ex. 180 at ¶¶ 12-16 (Greenberg Report) (“[T]he ’703 patent would have
taught one of ordinary skill in the art that, as NMDA receptor antagonists, the claimed
adamantine derivatives, including memantine, would not have been reasonably expected to be
beneficial to patients diagnosed with Alzheimer’s disease.”) (emphases added).
Forest’s Objection: Forest agrees that the evidence cited should also include a reference
to O’Shaughnessy Decl. I Ex. 166, Pretrial Order at Exhibit 12, ¶ 272. DPPs’ response otherwise
consists of improper argument or a recitation of different purported facts, but no evidentiary
basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
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statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
315. Forest’s expert, Dr. Malinow opined that the information disclosed in the ‘703
patent was sufficient for a person of ordinary skill to understand how to administer memantine to
a patient suffering from Alzheimer’s disease. The ‘703 patent states: “It has been found
unexpectedly that the use of these compounds [including memantine] prevents an impairment or
further impairment, i.e., degeneration and loss of nerve cells, after ischemia. Therefore, the
[compounds disclosed in the ‘703 patent] ... are especially suited for the prevention and
treatment of cerebral ischemia after ... Alzheimer’s disease.”
Public Documents: Ex. 2, ‘703 patent, col.3 ll.7-16.
Defendants’ Evidence: Ex. 181, Malinow Opp. Rep. ¶¶ 52, 54-73.
Response: This statement is not material for purposes of summary judgment because
this purported fact is not cited anywhere in Defendants’ Memorandum In Support of their
Motion for Summary Judgment (ECF No. 435).
Plaintiffs admit that the ‘703 Patent includes the above-identified quote.
316. Mylan’s expert Dr. Buccafusco’s testimony was inconsistent and contradictory in
that he testified both that a person of skill would have expected memantine to treat Alzheimer’s
disease, and that a person of ordinary skill would not have a reasonable expectation in carrying
out the methods of the claimed invention, i.e., using memantine to treat Alzheimer’s disease. For
example, he testified both that a person of skill in the relevant art in 1989 would “not have been
surprised that memantine could be used to treat Alzheimer’s,” and that “that same person” would
not have had “a reasonable expectation of success in practicing the claimed invention.”
Undisputed Record Evidence: Ex. 345, Buccafusco Dep. 42:1-11, 42:1-48:4.
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Response: Denied. First, this statement is not material for purposes of summary
judgment because this purported fact is not cited anywhere in Defendants’ Memorandum In
Support of their Motion for Summary Judgment (ECF No. 435).
Second, there is nothing inconsistent or contradictory in Dr. Buccafusco’s opinions. A
person of skill in the relevant art in 1989 would “not have been surprised that memantine could
be used to treat Alzheimer’s,” because memantine had been administered safely to patients with
Alzheimer’s disease in the prior art (e.g., the Fleischhacker reference) and the prior art reported
that memantine was effective to treat the symptoms of OBS, which largely align with the
symptoms of Alzheimer’s disease. Litvin Decl. Ex. 455, Reisberg, et al., Diagnosis and
Assessment of the Older Patient, Hospital & Community Psychiatry, 104-110 at 105 (“Primary
degenerative dementia” is the “psychiatric terminology of DSM-III, for the majority of cases of
what was formerly more loosely conceived of as chronic organic brain syndrome. It is
synonymous with what neurologists refer to as Alzheimer’s disease[.]”); O’Shaughnessy Decl.
Ex. 166, Pretrial Order, Exhibit 12, ¶¶ 122-124. At the same time, a person of skill in the
relevant art in 1989 would not have had “a reasonable expectation of success in practicing the
claimed invention” because the ’703 patent does not teach a person of ordinary skill how to use
memantine as an NMDA receptor antagonist to treat Alzheimer’s disease via NMDA receptor
antagonism as required by the claims.
Forest’s Objection: Forest agrees that the evidence cited should also include a reference
to O’Shaughnessy Decl. I Ex. 166 at ¶ 272. DPPs’ response otherwise consists of improper
argument or a recitation of different purported facts, but no evidentiary basis to contest the
statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
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not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
317. Mylan’s expert Dr. Fishman testified that as of 1989, a person of skill who was
aware of what was well-known in the art and had read the ‘703 patent’s specification “would
have been able to apply the invention.”
Undisputed Record Evidence: Ex. 346, Fishman Dep. 81:15-83:1.
Response: Admitted in part, denied in part. First, this statement is not material for
purposes of summary judgment because this purported fact is not cited anywhere in Defendants’
Memorandum In Support of their Motion for Summary Judgment (ECF No. 435).
Plaintiffs further object to this statement as incomplete, misleading, and immaterial. Dr.
Fishman was not offered to testify as Mylan’s expert on enablement, he was not instructed about
legal concepts relating to enablement, and his testimony about whether a person of ordinary skill
would have been able “to apply” the invention does not accurately reflect the legal standard for
enablement. Directly following the cited quote, Dr. Fishman clarified that his opinion was that
the “prior art would certainly allow for ... the oral treatment of memantine for the treatment relief
of symptoms of Alzheimer’s disease.” O’Shaughnessy Decl. Ex. 346, Fishman Dep. (Jan. 20,
2010) at 82:21-83:1. He was not opining about whether or not the ’703 Patent adequately taught
a person of ordinary skill how to use memantine as an NMDA receptor antagonist to treat
Alzheimer’s disease via NMDA receptor antagonism as required by the claims, which is the crux
of the enablement argument.
Forest’s Objection: DPPs do not dispute any part of the fact, but instead consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
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response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
E. No Evidence of Any Generics Planning an “At-Risk” Launch
318. Plaintiffs’ expert Prof. Einer Elhauge assumes that no at-risk entry would occur
during litigation “given the low generic profits” and “the large potential damages” from at-risk
entry.
Plaintiffs’ Admissions: Ex. 121, Elhauge Rep. I at19; Ex. 335, Elhauge (Sep. 29) Dep.
87:7-9.
Response: Admitted in part, denied in part. Plaintiffs admit that Prof. Elhauge’s
report contains these assumptions as to pre-settlement expectations of Forest and Mylan
regarding at risk entry; however, Prof. Elhauge’s report is based on specific assumptions made
for the purposes outlined in the report. Prof. Elhauge’s analysis does not depend upon and makes
no assumption as to what would occur.
Further, the prospects of Mylan potentially launching “at risk” absent settlement was a
material factor negotiated between Forest and the other settling generic companies. Prior to
Mylan settling with Forest, at least eleven other generic companies also settled with Forest. See
Defendants’ Statement at ¶¶ 75, 76, 86, 90, 95, 100, 105, 115, 121, 127, 132, 138, 143. As
admitted by Forest, those eleven settlement agreements contain an early launch provision
allowing each settling generic to come to market earlier than the agreed-upon date should any of
the three following occurrences take place: (1) in the event Forest granted another generic
manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2) in the event any
other generic company, such as Mylan, obtained a final court decision that the ’703 Patent was
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invalid, unenforceable, or non-infringed; or (3) in the event any other generic company, such as
Mylan, launched “at risk” (i.e., during the pendency of the ’703 patent litigation). As further
admitted by Forest, “each Generic Entry Early Acceleration Clause was valuable to each of the
Generic Manufacturers,” “was included in the settlement agreements at the demand of the
Generic Manufacturers,” and “ensured competition amongst the first filing Generic
Manufacturers should any generic have negotiated an earlier settlement date.” Defendants’
Statement at ¶¶ 351, 352, and 356. Plaintiffs agree. These eleven sophisticated, experienced
settling generic companies would not have demanded and received an early entry clause without
having a confirmed belief that the three early launch triggers — including the prospects of an “at
risk” launch by a non-settling generic company such as Mylan — were reasonably achievable by
other generic companies that had not yet settled. Further, such clauses could only have “value” to
the settling generics and “ensured competition amongst” the settling generics if such earlier
launch outcomes were reasonably probabilistic.
Forest’s Objection: DPPs admit that Prof. Elhauge made the assumption as stated above.
The remainder of DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or
dispute the relevance of the statement,” but does not challenge any aspect of the statement itself,
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Additionally, the presence of an acceleration clause says nothing about
whether any party expects an at risk launch to occur. Rather, the acceleration clauses provided a
standard provision for each party to ensure that it would be able to launch if another party
launched earlier. As DPPs’ expert explained, “the cost of writing [an acceleration clause]. . .is
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not high and . . . seems it could just be boilerplate. I don’t think the fact that they wrote it means
that they attributed any significant odds to it.” O’Shaughnessy Decl. II Ex. 387, Elhauge (Sept.
29) Dep. 192:20-193:4. Finally, as DPPs’ response does not rest on what “would occur,” it is
irrelevant. SJM at § II.A; RSJM at 8. Finally, DPPs have abandoned at-risk launch as a but-for
world in their summary judgment opposition brief. See Opp. at 39-45 (DPPs assert two but-for
worlds: (1) an alternative settlement agreement between Forest and Mylan; and (2) Mylan
prevailing in the patent litigation.)Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
319. Generics would not have expected Mylan to enter at risk.
Plaintiffs’ Admissions: Ex. 121, Elhauge Rep. I ¶ 19.
Response: Denied. Prior to Mylan settling with Forest, at least eleven other generic
companies also settled with Forest. See Defendants’ Statement at ¶¶ 75, 76, 86, 90, 95, 100, 105,
115, 121, 127, 132, 138, 143. As admitted by Forest, those eleven settlement agreements contain
an early launch provision allowing each settling generic to come to market earlier than the
agreed-upon date should any of the three following occurrences take place: (1) in the event
Forest granted another generic manufacturer, such as Mylan, an earlier entry date by settlement
agreement; (2) in the event any other generic company, such as Mylan, obtained a final court
decision that the ’703 patent was invalid, unenforceable, or non-infringed; or (3) in the event any
other generic company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703
Patent Litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause
was valuable to each of the Generic Manufacturers,” “was included in the settlement agreements
at the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.” DRSUF
at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. I Ex. 121, Elhauge Rep. at ¶ 8. Plaintiffs agree.
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These eleven sophisticated, experienced settling generic companies would not have demanded
and received an early entry clause without having a confirmed belief that the three early launch
triggers — including the prospects of an “at risk” launch by a non-settling generic company such
as Mylan — were reasonably achievable by other generic companies that had not yet settled.
Further, such clauses could only have “value” to the settling generics and “ensured competition
amongst” the settling generics if such earlier launch outcomes were reasonably probabilistic.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). The Generic Entry Early Acceleration Clauses are irrelevant
as to this fact, and the inferences that DPPs draw from them regarding the generics’ beliefs and
the probability of an early entry are speculative and hence cannot create a genuine issue of fact
sufficient to defeat summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir.
2005) (“The law is well established that conclusory statements, conjecture, or speculation are
inadequate to defeat a motion for summary judgment.”) (internal quotation marks omitted).
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Forest
incorporates its response to ¶ 318. Additionally, DPPs have abandoned at-risk launch as a but-
for world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an alternative
settlement agreement between Forest and Mylan; and (2) Mylan prevailing in the patent
litigation. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
320. Dr. Reddy’s did not consider launching generic memantine at risk.
Undisputed Record Evidence: Ex. 328, McCormick Dep. (Dr. Reddy’s) 123:10-14.
Response: Denied and irrelevant. Plaintiffs are not alleging that Dr. Reddy’s would
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have launched “at risk.”
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
321. Amneal had no plans of launching generic memantine earlier than January 2015.
Undisputed Record Evidence: Ex. 327, K. Gupta (Amneal) Dep. 91:5-8.
Response: Denied. Amneal submitted its ANDA on October 16, 2007, with a
Paragraph IV Certification. See O’Shaughnessy Decl. Ex. 310 (FDA final approval letter to
Amneal). This submission indicates Amneal intended to launch its product before the ’703 Patent
expired. See Litvin Decl. Ex. 253, Gupta (Amneal) Dep. (July 27, 2017) at 20:2-9 (confirming
that Amneal always tries to market its product “as soon as possible”). Notably, when Amneal
filed its ANDA, the ’703 Patent was set to expire on April 11, 2010. See O’Shaughnessy Decl.
Ex. 186 (U.S. Patent and Trademark Office, Notice of Final Determination, dated March 3,
2009). Furthermore, Plaintiffs object to this statement as misleading to the extent it implies that
Amneal should have been planning to launch before it settled its patent litigation with Forest on
September 1, 2009. O’Shaughnessy Decl. Ex. 22 (Amneal patent litigation settlement). As that
settlement occurred over a year and a half before the expiration of the 7.5-year stay (April 16,
2011), at the time of the settlement, Amneal was not yet faced with a decision of whether it
should launch at-risk.
Furthermore, as admitted by Forest, Amneal’s settlement agreement contains an early
launch provision allowing Amneal to come to market earlier than the agreed-upon date should
any of the three following occurrences take place: (1) in the event Forest granted another generic
manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2) in the event any
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other generic company, such as Mylan, obtained a final court decision that the ’703 Patent was
invalid, unenforceable, or non-infringed; or (3) in the event any other generic company, such as
Mylan, launched “at risk” (i.e., during the pendency of the ’703 Patent Litigation). See Response
to ¶ 86. As further admitted by Forest, “each Generic Entry Early Acceleration Clause was
valuable to each of the Generic Manufacturers’” “was included in the settlement agreements at
the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. A sophisticated, experienced generic company such as Amneal would not
have demanded and received an early entry clause without having a confirmed belief that the
three early launch triggers — including the prospects of Mylan negotiating a 2012 launch date —
were reasonably achievable by other generic companies that had not yet settled. Further, such
clauses could only have “value” to Amneal and “ensured competition amongst” the settling
generics if such earlier launch outcomes were reasonably probabilistic.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). The Generic Entry Early Acceleration Clauses are irrelevant
as to this fact, and the inferences that DPPs draw from them regarding the generics’ beliefs and
the probability of an early entry are speculative and hence cannot create a genuine issue of fact
sufficient to defeat summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir.
2005) (“The law is well established that conclusory statements, conjecture, or speculation are
inadequate to defeat a motion for summary judgment.”) (internal quotation marks omitted).
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
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statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Additionally,
Forest incorporates by reference its response to ¶ 318.
DPPs cite no support for the erroneous contention that a Paragraph IV Certification
indicates a generic’s intention to launch its product at risk. A Paragraph IV Certification
indicates a desire to receive FDA approval before a patent expires because the filer believes the
patent is invalid, not a desire to actually begin selling a product before the resolution of any
dispute with the patent owner. See 21 U.S.C. §§ 355(j)(1), 335(j)(2)(A)(vii)(IV) (“approval of a
new drug” requires an applicant making a Paragraph IV Certification to certify that it believes
that the “patent is invalid or will not be infringed by the manufacture, use, or sale of the new
drug for which the application is submitted.”); see, e.g., Litvin Decl. Ex. 534, FRX-AT-
03169504-531 (DRL Paragraph IV Letter dated 1/2/08) (“DRL is seeking approval from the
FDA to market and sell the DRL Memantine Hydrochloride Tablets for the treatment of
moderate to severe dementia of the Alzheimer's type”). Additionally, DPPs have abandoned at-
risk launch as a but-for world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds:
(1) an alternative settlement agreement between Forest and Mylan; and (2) Mylan prevailing in
the patent litigation.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
322. Sun did not consider launching generic memantine at risk and testified that an at
risk launch occurs in very rare circumstances.
Undisputed Record Evidence: Ex. 330, Nadkarni (Sun) Dep. 128:18-129:6.
Response: Denied and irrelevant. Plaintiffs are not alleging that Sun would have
launched at risk.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
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statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
323. As of October 2015 Teva decided to shut down its launch of generic memantine
due to analytical issues.
Undisputed Record Evidence: Ex. 350, Cavanaugh (Teva) Dep. 72:25-73:11.
Response: Denied and irrelevant. Plaintiffs object to and deny this statement as
irrelevant as Plaintiffs are not attempting to prove Teva would have come to the market earlier in
the but-for world. Plaintiffs further deny this statement as misleading and materially incomplete
to the extent it omits that Teva’s decision not to launch was based on the fact that it would not be
one of the first companies to market generic Namenda. See O’Shaughnessy Decl. Ex. 350, Teva
Dep. At 71:1-21 (“What changes the forecast ... is being able to launch in the first wave on day
one or launching late after everyone else. That changes our forecast assumptions. And our
forecast assumptions would then inform – and our forecast would inform the decision on whether
we wanted to launch or not.”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
324. Wockhardt has an internal policy of never launching a product at risk unless
approved by the legal department.
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Undisputed Record Evidence: Ex. 351, Venkatesan (Wockhardt) Dep. 209:9-15, 210:19-
211:11.
Response: Denied and irrelevant. Plaintiffs are not alleging that Wockhardt would
have launched “at risk.”
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
325. Torrent’s witness testified that was preferable to have a license agreement in place
to launch its generic memantine product.
Undisputed Record Evidence: Ex. 352, S. Gupta (Torrent) Dep. 138:22-139:21.
Response: Denied and irrelevant. Plaintiffs further object to and deny this statement
to the extent it omits that Torrent’s witness testified that, in the absence of its settlement and
license agreement, Torrent could consider whether to launch at risk. O’Shaughnessy Decl. Ex.
352, Gupta (Torrent) Dep. (June 15, 2017) at 141:12-18.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
326. Torrent has only launched one product at risk, out of its approximately 60
products. Torrent has not launched more at risk based on legal advice.
Undisputed Record Evidence: Ex. 352, S. Gupta (Torrent) Dep. 59:2-15.
Response: Denied and irrelevant. Plaintiffs object to and deny this statement as
irrelevant because there is no evidence Torrent’s legal counsel considered whether Torrent
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should launch its generic Namenda product at risk. See O’Shaughnessy Decl. Ex. 352, Gupta
(Torrent) Dep. (June 15, 2017) at 59:11-60:5. Additionally, this statement is irrelevant as
Plaintiffs are not alleging that Torrent would have launched “at risk.”
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
327. Lupin did not consider launching generic memantine at risk.
Undisputed Record Evidence: Ex. 188, Lupin’s Motion to Quash Hr. Tr. 37:4-18.
Response: Denied and irrelevant. Plaintiffs are not alleging that Lupin would have
launched “at risk.”
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
F. No Evidence that Forest Considered Launching a Namenda IR Authorized
Generic in the 2010-2012 Timeframe
328. Forest did not consider launching a Namenda IR Authorized Generic because
there were multiple first filers and the value for Forest would not be significant.
Defendants’ Evidence: Ex. 353, Solomon (NYAG) Dep. 83:7-9, 85:23-87:3
(When “there is a single generic entrant, then the value of an authorized generic is
much greater because you have a six-month period where there may only be one
generic product and so you as a branded company might say, well, we can share
that generic market and so we’re going to create an authorized generic. In this
case Venkatesanwo, this was a five year Waxman-Hatch [sic] product, there was a
date certain, there were multiple filers, the day this product goes generic there will
be many generic versions of Namenda IR, so the value for us of an authorized
generic was not significant. Now, now that the company is party of Actavis, they
might take a different view, I don’t know, but certainly for Forest, we never
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viewed an authorized generic of Namenda IR as being something of – we had a
few generic products, but we were not able to effectively compete in these big
generic markets against people like Teva, Mylan, Actavis, and so on, so we
wouldn’t have considered that as something that made sense for us.”); Ex. 354,
Saunders (NYAG) Dep. 354:9-356:19 (“[A]s of today I am not allowing them to
do an authorized generic ... I want our people focused on XR and we certainly
don’t have the fixed dose combination out yet so we’ve got a lot of work to do
there, it is only one part of the equation.”); Ex. 324, Solomon (Sep. 7) Dep. 58:7-
60:15; Ex. 325, Snyder Dep. 80:6-23 (“there was never any discussion about
launching [a Namenda IR] authorized generic at Forest”), 95:4-17.
Response: Denied. Plaintiffs deny and object to this statement as misleading to the
extent it omits that, after Actavis acquired Forest, it launched an authorized generic version of
Namenda on July 11, 2015. See O’Shaughnessy Decl. Ex. 325 (Snyder Dep. (Oct. 11, 2017) at
76:9-22). Furthermore, Plaintiffs dispute and object to this statement as materially incomplete to
the extent it omits that a reason for Forest not considering the launch of an authorized generic
earlier was its focus on the product hop to Namenda XR. See O’Shaughnessy Decl. Ex. 354
(Saunders (NYAG) Dep. at 354:9-356:19) (“[A]s of today I am not allowing them to do an
authorized generic ... I want our people focused on XR and we certainly don’t have the fixed
dose combination out yet so we’ve got a lot of work to do there, it is only one part of the
equation.”). Additionally, Plaintiffs object to and dispute this statement as materially incomplete
to the extent it omits Forest’s history of launching other authorized generic products at least five
times before it was acquired by Actavis. See Litvin Decl. Ex. 460, Solomon Dep. (Sept. 7, 2017)
at 63:20-72:18.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). In particular, DPPs refer to facts relevant to 2015, but not
the 2010-12 timeframe. Moreover, DPPs grossly mischaracterize Forest’s “focus[] on XR” as
releating to the product hop. In any event, Forest’s motivations for not wanting to do an
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authorized generic of memantine in 2010-12 are not responsive to the stated fact. Furthermore,
DPPs’ response merely attempts to “contextualize or dispute the relevance of the statement,” but
does not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
329. Actavis was in the generics business and found that there would be interest it
launching generic memantine in 2015.
Defendants’ Evidence: Ex. 325, Snyder Dep. 97:22-98:14.
Response: Denied in part. Further, Plaintiffs object to this statement as vague and
confusing. To the extent this statement is construed to a particular meaning other than “Actavis
was in the generics business,” Plaintiffs deny this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
330. “[W]hat Actavis did would not necessarily have been the same thing that Forest
would have done had Actavis not acquired Forest.”
Defendants’ Evidence: Ex. 325, Snyder Dep. 76:14-22.
Response: Denied. Plaintiffs object to and deny this statement as materially
incomplete and materially misleading to the extent it omits Forest’s history of launching other
authorized generic products at least five times before it was acquired by Actavis. See Litvin
Decl. Ex. 460, Solomon Dep. (Sept. 7, 2017) at 63:20-72:18.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
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at 186 n.3; Fed. R. Civ. P. 56(e)(2). The testimony that DPPs cite makes no mention of
memantine, or plans by Forest to launch an authorized generic version of memantine.
Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of the
statement,” but does not challenge any aspect of the statement itself, which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
G. No Evidence an Earlier Entry Date Was Considered for Settlements
331. Forest was unwilling to negotiate with the Generic Defendants a launch date
earlier than three months prior to the ‘703 patent expiration.
Defendants’ Evidence: Ex. 340, Agovino Dep. 75:6-76:20; Ex. 339, Ryan (Sep. 7) Dep.
199:9-200:15.
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 24:8-25:20; Ex. 34,
KE00000169; Ex. 190, KE00000302.
Plaintiffs’ Admissions: Ex. 335, Elhauge (Sep. 29) Dep. 56:19-57:1 (conceding that no
witness involved in real life negotiations between Forest and Mylan has testified that a
2012 settlement was clearly feasible).
Response: Denied. Prior to Mylan settling with Forest, at least eleven other generic
companies also settled with Forest. See Defendants’ Statement at ¶¶ 75, 76, 86, 90, 95, 100, 105,
115, 121, 127, 132, 138, 143. As admitted by Forest, those eleven settlement agreements contain
an early launch provision allowing each settling generic to come to market earlier than the
agreed-upon date should any of the three following occurrences take place: (1) in the event
Forest granted another generic manufacturer, such as Mylan, an earlier entry date by settlement
agreement; (2) in the event any other generic company, such as Mylan, obtained a final court
decision that the ’703 patent was invalid, unenforceable, or non-infringed; or (3) in the event any
other generic company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703
patent litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause
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was valuable to each of the Generic Manufacturers,” “was included in the settlement agreements
at the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. These eleven sophisticated, experienced settling generic companies would
not have demanded and received an early entry clause without having a confirmed belief that the
three early launch triggers — including the prospects of an earlier entry date by a later settler —
were reasonably achievable by other generic companies, including Mylan, that had not yet
settled. Further, the provisions accelerating the generic’s launch date in the event that Forest
granted another generic manufacturer, such as Mylan, an earlier entry date by settlement
agreement could only have “value” to the settling generics and “ensured competition amongst”
the settling generics if such earlier outcomes were reasonably probabilistic. See also Response to
¶ 356.
Additionally, on April 17, 2009, Forest offered Wockhardt entry four months before the
’703 Patent Expired. See Litvin Decl. Ex. 351, Venkatesan (Wockhardt) Dep. (July 13, 2017) at
221:7-17. Further denied to the extent defendants are suggesting that any bargaining position
they held in the reverse payment negotiations would have been equally maintained in the but-for
negotiations without a reverse payment.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). The Generic Entry Early Acceleration Clauses are irrelevant
as to this fact, and the inferences that DPPs draw from them regarding the generics’ beliefs and
the probability of an early entry are speculative and hence cannot create a genuine issue of fact
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sufficient to defeat summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir.
2005) (“The law is well established that conclusory statements, conjecture, or speculation are
inadequate to defeat a motion for summary judgment.”) (internal quotation marks omitted).
Forest incorporates by reference its response to ¶ 318.
Furthermore, Wockhardt’s witness testified that, following the Markman Report and
Recommendation issued by Judge Stark, Forest re-contacted the generic manufacturers and
notified them Forest was only offering three months early entry. See O’Shaughnessy Decl. II Ex.
384, Ex. 12 of Venkatesan (Wockhardt) Dep., (“Following the decision on claim construction,
Forest informs Wockhardt that it is contacting each defendant about settling. The new proposal
from Forest is 3 months early entry. . . . Forest refuses to negotiate the entry date any further, and
the issue is not addressed again during negotiations.”); Litvin Decl. Ex. 351 (Venkatesan
(Wockhardt) Dep.) at 222:4-21 (indicating that Forest “changed the offer from four months to
three months following the Markman decision”). None of the above cited evidence disputes that
Forest’s position was that Forest was “unwilling to allow any first filer to launch more than 3
months before the patent expires” after Forest received the favorable Markman decision.
O’Shaughnessy Decl. I Ex. 34, KE00000169 (August 2009 email). Additionally, DPPs have
abandoned at-risk launch as a proposed but-for world in their briefs. See Opp. at 39-45 (DPPs
assert two but-for worlds: (1) an alternative settlement agreement between Forest and Mylan;
and (2) Mylan prevailing in the patent litigation. As such there is no factual dispute and the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
H. There is No Evidence that Generics Could Have Entered in 2012
332. There is no evidence that Mylan could have negotiated with Forest for a 2012
settlement date in the real world.
Defendants’ Evidence: Ex. 339, Ryan (Sep. 7) Dep. 199:9-200:15 (Forest was not
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willing to negotiate with Mylan for a 2012 launch date), Ex. 367, Ryan (Nov. 7) Dep.
394:21-395:2; Ex. 340, Agovino Dep. 75:6-76:20 (Forest was unwilling to negotiate with
Mylan a launch date earlier than three months prior to the ‘703 patent expiration); Ex.
366, Solomon (Nov. 15) Dep. 421:12-422:6 (“We wouldn’t have considered that at all.”).
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 24:8-25:20; Ex. 34,
KE00000169; Ex. 190, KE00000302.
Plaintiffs’ Admissions: Ex. 335, Elhauge (Sep. 29) Dep. 56:19-57:1 (conceding that no
witness involved in real life negotiation.
Response: Denied. Professor Elhauge testified that he relied on documents from
Forest and Mylan, including profit projections, in determining that a November 2, 2012 entry
date for Mylan was clearly feasible absent the reverse payment, O’Shaughnessy Decl. Ex. 335 at
54:18-56:9 (Elhauge Dep. (Sept. 29, 2017)), and further, that “but for” the ability of Forest to
make an anticompetitive payment to Mylan, those parties, as rational economic actors, would
have settled their patent litigation with Mylan receiving an earlier market entry date in 2012.
O’Shaughnessy Decl. Ex. 121 Elhauge Rpt. ¶¶ 2, 64, 65 and §IV. Moreover, Prof. Elhauge
opined based, on the evidence and opinions offered by Plaintiffs’ patent expert George W.
Johnston, that had Mylan and Forest not settled at all, Mylan would have entered on October 1,
2011. Id. ¶ 78.
Furthermore, prior to Mylan settling with Forest, at least eleven other generic companies
also settled with Forest. See Defendants’ Statement at ¶¶ 75, 76, 86, 90, 95, 100, 105, 115, 121,
127, 132, 138, 143. As admitted by Forest, those eleven settlement agreements contain an early
launch provision allowing each settling generic to come to market earlier than the agreed-upon
date should any of the three following occurrences take place: (1) in the event Forest granted
another generic manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2)
in the event any other generic company, such as Mylan, obtained a final court decision that the
’703 patent was invalid, unenforceable, or non-infringed; or (3) in the event any other generic
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company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703 patent
litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause was
valuable to each of the Generic Manufacturers,” “was included in the settlement agreements at
the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. These eleven sophisticated, experienced settling generic companies would
not have demanded and received an early entry clause without having a confirmed belief that the
three early launch triggers — including the prospects of Mylan negotiating a 2012 launch date —
were reasonably achievable by other generic companies that had not yet settled. Further, such
clauses could only have “value” to the settling generics and “ensured competition amongst” the
settling generics if such earlier launch outcomes were reasonably probabilistic. See also
Response to ¶ 356.
Forest’s Objection: DPPs’ response consists of evidence that is inadmissible, irrelevant,
and speculative. First, Prof. Elhauge’s opinions are inadmissible because they do not comport
with Actavis, they are speculative, inconsistent, and contradict the evidence, and they usurp the
role of the jury. Mem. of Law in Supp. of Forest’s Mot. to Exclude Certain Opinions and
Proposed Testimony of Prof. Einer Elhauge, dated Nov. 17, 2017. Prof. Elhauge also has
confirmed that just because his model finds a potential settlement to be feasible or rational, that
does not mean the settlement would happen: “you always have to compare it to what [the parties]
own perception of but-for alternatives were.” O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov.
10) Dep. 259:13-260:2. In any event, DPPs have asserted that Prof. Elhauge will not testify as to
“the but-for settlement that parties would have reached,” and thus will not offer the cited
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testimony at trial in order to rebut this fact. Direct Purchaser Class Pls.’ Mem. of Law in Opp’n
to Forest’s Mot. to Exclude Certain Opinions and Proposed Testimony of Prof. Einer Elhauge,
dated Dec. 11, 2017 (emphasis in original). Further, “Prof. Elhauge’s analysis does not depend
upon and makes no assumption as to what would occur.” DRSUF ¶ 318 (emphasis in original).
Second, Johnston’s opinions are based on his legal conclusions about the outcome of the
patent litigation, and thus are irrelevant to a potential negotiated entry date, in addition to being
inadmissible. Mem. of Law in Supp. Of Forest’s Mot. to Exclude Opinions and Proposed
Testimony of George W. Johnston, Esq., dated Nov. 17, 2017.
Finally, the Generic Entry Early Acceleration Clauses are irrelevant as to this fact, and
the inferences that DPPs draw from them regarding the generics’ beliefs and the probability of an
early entry are speculative and hence cannot create a genuine issue of fact sufficient to defeat
summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is
well established that conclusory statements, conjecture, or speculation are inadequate to defeat a
motion for summary judgment.”) (internal quotation marks omitted). Additionally, DPPs have
abandoned at-risk launch as a proposed but-for world in their briefs. See Opp. at 39-45 (DPPs
assert two but-for worlds: (1) an alternative settlement agreement between Forest and Mylan;
and (2) Mylan prevailing in the patent litigation.Forest incorporates by reference its response to ¶
318.
DPPs have offered nothing but their purported experts’ ipse dixit to dispute this point, but
purported expert opinion, untethered to the evidence in the case, cannot create a genuine issue of
fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997)
(“[A]n expert’s report is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v.
British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony
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without a factual foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256
(2d Cir. 2001); see also Brooke Grp. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 242
(1993) (“When an expert opinion is not supported by sufficient facts to validate it in the eyes of
the law, or when indisputable record facts contradict or otherwise render the opinion
unreasonable, it cannot support a jury’s verdict.”).
Accordingly, the fact should be deemed admitted.
333. At the depositions of generic manufacturers, Plaintiffs’ did not ask any questions
regarding the generics’ ability to manufacture and launch generic Namenda in 2012.
Undisputed Record Evidence: Ex. 355, Curia (Mylan) Dep. 112:19-119:24 (asking Ms.
Curia about manufacturing capabilities in 2013-2015); Ex. 328, McCormick (DRL) Dep.
137:6-138:4 (asking whether there were any problems with other products DRL 98
manufactured in 2013, or whether there were supply issues starting in 2013), 204:9-24
(asking whether DRL could have launched in 2013), 215:24-5 (asking questions based on
witness’ time at DRL, witness started working at DRL in 2013), 228:23-229:7 (asking
about 2013-2015), (no reference to 2012 in entire deposition); Ex. 327, Gupta (Amneal)
Dep. 12:4-7 (only reference to 2012 in the Amneal deposition refers to witness’ start date
at company), 165:7-167:5 (asking whether anything would have prevented Amneal from
requesting final approval in 2013), 201:24-203:12 (asking whether anything would
prevent Amneal from manufacturing and launching in 2013 or 2014); Ex. 352, Gupta
(Torrent) Dep. 60:6-8 (the only mention of 2012 in Torrent deposition refers to witness’
start date at company); Ex. 330, Nadkarni (Sun) Dep. 216:21-217:2 (asks merely whether
Sun would take same preparatory steps in 2012 that it did for 2015 launch and whether
Sun would have wanted to be on the market as early as possible in 2012); Ex. 350,
Cavanaugh (Teva) Dep. (witness was not asked about ability to launch in 2012); Ex. 331,
Rabinovic (Teva) Dep. (no mention of 2012 in entire deposition); Ex. 351, Venkatesan
(Wockhardt) Dep. (no mention of 2012 in entire deposition); Ex. 334, Wilk (Orgenus)
58:17-59:2 (first two mentions of 2012 are about a change to the settlement agreement),
146:23-147:2 (third mention of 2012 is about date of final approval).
Response: Denied. Plaintiffs have substantial evidence that Amneal, Dr. Reddy’s,
Lupin, Mylan, and Sun either had, or would have obtained, regulatory approval as early as 2012
as required before launching generic Namenda. See O’Shaughnessy Decl. Ex. 327 at 64:4-65:18
(Gupta (Amneal) Dep. (July 27, 2017)) (Amneal obtained tentative approval on January 8,
2010); O’Shaughnessy Decl. Ex. 265 at 42:5-23 (McCormick (Dr. Reddy’s) Dep. (July 20,
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2017)) (Dr. Reddy’s obtained final approval on April 14, 2010); Litvin Decl. Ex. 225, LPI-
NMDA-00000572–LPI-NMDA-00000577 (Lupin obtained tentative approval on January 19,
2010); Litvin Decl. Ex. 295, Curia (Mylan) Dep. (Aug. 3, 2017) at 64:2–69:5 (Mylan obtained
tentative approval on April 2, 2010); and Litvin Decl. Ex. 334, Nadkarni (Sun) Dep. (Aug. 31,
2017) at 40:19–22 (Sun obtained tentative approval on April 9, 2010). See also Litvin Decl. Ex.
343, Thomas Report, ¶¶ 126, 129, 134, 139, 142.
Furthermore, Plaintiffs confirmed that Amneal, Dr. Reddy’s, Lupin, Mylan, and Sun each
successfully manufactured and launched its respective generic Namenda product on the agreed-
upon July, 2015 launch date. See Litvin Decl. Ex. 253, Gupta (Amneal) Dep. (July 27, 2017) at
25:5-20, 69:21-25; Litvin Decl. Ex. 265, McCormick (Dr. Reddy’s) Dep. (July 20, 2017) at
47:19-23, 48:14-18; Litvin Decl. Ex. 229, LPI-NMDA-00004775 (Lupin email announcing
launch, dated July 13, 2015); O’Shaughnessy Decl. Ex. 355 at 56:10-13 (Curia (Mylan) Dep.
(Aug. 3, 2017)); O’Shaughnessy Decl. Ex. 330 at 64:18-65:4 (Nadkarni (Sun) Dep. (Aug. 31,
2017)). This established their ability to successfully manufacture their products when faced with
a known launch date. Furthermore, there is no record evidence indicating that these five generic
companies could not have manufactured and launched in 2012 in a substantially similar manner.
In fact, Forest failed to provide any evidence showing that would have prevented any generic
from launching earlier in its response to Plaintiffs’ Interrogatories. See Litvin Decl. Ex. 457,
Forest’s Responses and Objections to Second Set of Interrogatories of Direct Purchaser Class
Plaintiffs, served June 12, 2017, at Response to Plaintiffs’ Interrogatory No. 9.
Furthermore, there were no actual launch preparation efforts in 2012 because the generics
focused on the 2015 launch date, and 2012 was too soon to start the launch preparations for a
2015 launch. See Litvin Decl. Ex. 456, DeLeon Dep. (Oct. 26, 2017) at 132:14-25, 173:24-174:9
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(explaining that a generic company would not manufacture product more than two years before
the planned launch date and let it expire before the planned launch date). Moreover, 11 of the
generics had settled at least 9 months prior to the earliest possible generic entry on April 16,
2011, when the statutory 7.5 year stay would have expired. See O’Shaughnessy Decl. Exs. 22-32.
Additionally, as admitted by Forest, the settlement agreements contain an early launch
provision allowing each settling generic to come to market earlier than the agreed-upon date
should any of the three following occurrences take place: (1) in the event Forest granted another
generic manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2) in the
event any other generic company, such as Mylan, obtained a final court decision that the ’703
patent was invalid, unenforceable, or non-infringed; or (3) in the event any other generic
company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703 patent
litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause was
valuable to each of the Generic Manufacturers,” “was included in the settlement agreements at
the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. These sophisticated, experienced settling generic companies would not have
demanded and received an early entry clause without having a confirmed belief that the three
early launch triggers were reasonably achievable by other generic companies. Further, such
clauses could only have “value” to the settling generics and “ensured competition amongst” the
settling generics if such earlier launch outcomes were reasonably probabilistic.
Finally, Plaintiffs object to this statement as irrelevant to the extent the term “Generics”
is vague and overbroad, including companies that the Plaintiffs are not alleging would have
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come to market earlier in the but-for world.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Second, The Generic Entry Early Acceleration Clauses are irrelevant as to this fact, and
the inferences that DPPs draw from them regarding the generics’ beliefs and the probability of an
early entry are speculative and hence cannot create a genuine issue of fact sufficient to defeat
summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is
well established that conclusory statements, conjecture, or speculation are inadequate to defeat a
motion for summary judgment.”) (internal quotation marks omitted).
Moreover, the statement addresses whether DPPs questioned the witnesses about
manufacturing and launching in 2012, and DPPs’ response confirms that they did not, but instead
DPPs seek to draw the inference that because they launched in 2015, they would have launched
in 2012. Additionally, DPPs have abandoned at-risk launch as a proposed but-for world in their
briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an alternative settlement
agreement between Forest and Mylan; and (2) Mylan prevailing in the patent litigation.Forest
incorporates by reference its response to ¶ 318. Because DPPs have not offered evidence to
show that they did ask the generic manufacturers about manufacturing and launching in 2012,
this fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2). See Mem. of Law in Supp. of
Forest’s Mot. to Exclude Opinions and Testimony of Janet K. Deleon, dated Nov. 17, 2017;
Reply Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Proposed Testimony of
Janet K. DeLeon, dated Dec. 29, 2017.
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334. Plaintiffs’ expert, Janet DeLeon admitted that there are no documents that
demonstrate the generics’ ability to launch in 2012 and explained that she did not examine any
documents or evidence demonstrating the generics’ supply capabilities, manufacturing
equipment, or capacity as of 2012.
Plaintiffs’ Admissions: Ex. 356, DeLeon Dep. 90:17-91:11, 133:2-15, 143:24-144:8.
Response: Denied. Plaintiffs object to and dispute this statement for the same reasons
explained in Response to ¶ 333. This statement is also misleading to the extent that it implies that
there was an inability for generics to launch in 2012. As Ms. DeLeon explained in her
deposition, she does not expect documents demonstrating launch activities to exist from 2012
because the generic companies would have prioritized the production of other products at that
time due to the agreed-upon 2015 launch date, as 2012 would have been too early to start
manufacturing preparations for a 2015 launch. Litvin Decl. Ex. 456, DeLeon Dep. (Oct. 26,
2017) at 163:5-164:3. Furthermore, Plaintiffs object to and dispute this statement as misleading
as DeLeon testified that she examined documents from the actual-world launch and used her
knowledge of industry practices and her experience to determine that the same steps could have
been taken in the lead up to a but-for world launch in 2012. Litvin Decl. Ex. 456, DeLeon Dep.
(Oct. 26, 2017) at 116:1-16, 132:3-13. Furthermore, Plaintiffs object to this statement as
irrelevant to the extent the term “Generics” is overbroad, including companies that the Plaintiffs
are not alleging would have come to market earlier in the but-for world, e.g. Cobalt and Orchid.
Additionally, as admitted by Forest, the settlement agreements contain an early launch
provision allowing each settling generic to come to market earlier than the agreed-upon date
should any of the three following occurrences take place: (1) in the event Forest granted another
generic manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2) in the
event any other generic company, such as Mylan, obtained a final court decision that the ’703
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patent was invalid, unenforceable, or non-infringed; or (3) in the event any other generic
company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703 patent
litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause was
valuable to each of the Generic Manufacturers,” “was included in the settlement agreements at
the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. These sophisticated, experienced settling generic companies would not have
demanded and received an early entry clause without having a confirmed belief that the three
early launch triggers were reasonably achievable by other generic companies that had not yet
settled. Further, such clauses could only have “value” to the settling generics and “ensured
competition amongst” the settling generics if such earlier launch outcomes were possible in that
these generics either could have earlier final approval from FDA and had the manufacturing
wherewithal to enter the market earlier. In fact, by 2012, FDA final approval or tentative
approval had been obtained by the five generic companies at issue, Amneal, Dr. Reddy’s, Lupin,
Mylan, and Sun. See O’Shaughnessy Decl. Ex. 327 at 64:4–65:18 (Gupta (Amneal) Dep. (July
27, 2017)) (Amneal obtained tentative approval on January 8, 2010); O’Shaughnessy Decl. Ex.
328 at 42:5-23 (McCormick (Dr. Reddy’s) Dep. (July 20, 2017)) (Dr. Reddy’s obtained final
approval on April 14, 2010); Litvin Decl. Ex. 225, LPI-NMDA-00000572–LPI-NMDA-
00000577 (Lupin obtained tentative approval on January 19, 2010); Litvin Decl. Ex. 295, Curia
(Mylan) Dep. (Aug. 3, 2017) at 64:2–69:5 (Mylan obtained tentative approval on April 2, 2010);
and Litvin Decl. Ex. 334, Nadkarni (Sun) Dep. (Aug. 31, 2017) 40:19–22 (Sun obtained tentative
approval on April 9, 2010). See also Litvin Decl. Ex. 343, Thomas Report ¶¶ 126, 129, 134, 139,
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142.
Forest’s Objection: DPPs’ response is nonresponsive to the stated fact. Further, DPPs’
response consists of evidence that is inadmissible, irrelevant, and speculative. First, Forest has
moved to exclude Ms. DeLeon’s opinions because they are inadmissible. Mem. of Law in Supp.
of Forest’s Mot. to Exclude Opinions and Testimony of Janet K. DeLeon, dated Nov. 17, 2017.
Second, the Generic Entry Early Acceleration Clauses are irrelevant as to this fact, and
the inferences that DPPs draw from them regarding the generics’ beliefs and the probability of an
early entry are speculative and hence cannot create a genuine issue of fact sufficient to defeat
summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is
well established that conclusory statements, conjecture, or speculation are inadequate to defeat a
motion for summary judgment.”) (internal quotation marks omitted).
Thus, DPPs have offered nothing but their purported experts’ ipse dixit to dispute this
point, but purported expert opinion, untethered to the evidence in the case, cannot create a
genuine issue of fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55,
66 (2d Cir. 1997) (“[A]n expert’s report is not a talisman against summary judgment.”); Virgin
Atl. Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that
“expert testimony without a factual foundation cannot defeat a motion for summary judgment”),
aff’d 257 F.3d 256 (2d Cir. 2001); see also Brooke Grp. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209, 242 (1993) (“When an expert opinion is not supported by sufficient facts to
validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render
the opinion unreasonable, it cannot support a jury’s verdict.”). Forest further incorporates by
reference its response to ¶ 318. Additionally, DPPs have abandoned at-risk launch as a proposed
but-for world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an
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alternative settlement agreement between Forest and Mylan; and (2) Mylan prevailing in the
patent litigation.
Accordingly, the fact should be deemed admitted.
335. Many generic companies had issues during launch planning or expressed doubts
about the business justifications for launching, such that it is not certain they would have
launched in 2012.
Undisputed Record Evidence: Ex. 355, Curia (Mylan) Dep. 112:19-113:23 (Mylan had
fewer manufacturing facilities worldwide in 2013 than it does now); Ex. 328, McCormick
(DRL) Dep. 18:8-19:23 (DRL expressed that the more competition targeting the same
product, the less attractive an opportunity becomes); Ex. 191, Sun Exhibit 10; Ex. 330,
(Sun) Dep. 71:11-73:7 (showing that manufacturing, supply, and other issues have
prevented Sun from hitting launch date targets in the past); Ex. 350, Cavanaugh (Teva)
Dep. 69:16-73:11 (in 2015 Teva was dissuaded to continue working on resolving USP
method issues because there was too much competition in the market); Ex. 192, LPI99
NMDA-00004892 at 4895 (showing that in 2013 Lupin’s API manufacturing was on hold
due to issues with raw material quality).
Response: Denied. None of the Defendants’ cited evidence directly concerns launch
planning in 2012. Furthermore, Plaintiffs specifically dispute the Defendants’ reference to
O’Shaughnessy Decl. Ex. 328, which describes Dr. Reddy’s process for identifying what
ANDAs to submit, not its process for deciding which drugs to launch. O’Shaughnessy Decl. Ex.
328 at 18:8-17 (McCormick (Dr. Reddy’s) Dep. (July 20, 2017)) (“why don’t we start with
what’s your understanding of how Dr. Reddy’s decides what drugs it wants to target for
submitting an ANDA?”). Additionally, Plaintiffs object to this statement as vague and not
material.
This statement is also misleading to the extent that it implies that there was an inability
for generics to launch in 2012. As Plaintiffs’ expert, Ms. DeLeon, explained in her deposition,
she does not expect documents demonstrating launch activities to exist from 2012 because the
generic companies would have prioritized the production of other products at that time due to the
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agreed-upon 2015 launch date, as 2012 would have been too early to start manufacturing
preparations for a 2015 launch. Litvin Decl. Ex. 456, DeLeon Dep. (Oct. 26, 2017) at 163:5-
164:3. Furthermore, Plaintiffs object to and dispute this statement as misleading as DeLeon
testified that she examined documents from the actual-world launch and used her knowledge of
industry practices and her experience to determine that the same steps could have been taken in
the lead up to a but-for world launch in 2012. See Litvin Decl. Ex. 456, DeLeon Dep. (Oct. 26,
2017) at 116:1-16, 132:3-13.
Additionally, as admitted by Forest, the settlement agreements contain an early launch
provision allowing each settling generic to come to market earlier than the agreed-upon date
should any of the three following occurrences take place: (1) in the event Forest granted another
generic manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2) in the
event any other generic company, such as Mylan, obtained a final court decision that the ’703
patent was invalid, unenforceable, or non-infringed; or (3) in the event any other generic
company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703 patent
litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause was
valuable to each of the Generic Manufacturers,” “was included in the settlement agreements at
the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. These sophisticated, experienced settling generic companies would not have
demanded and received an early entry clause without having a confirmed belief that the three
early launch triggers were reasonably achievable by other generic companies that had not yet
settled. Further, such clauses could only have “value” to the settling generics and “ensured
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competition amongst” the settling generics if such earlier launch outcomes were possible in that
these generics either had or could have had earlier final approval from FDA and had the
manufacturing wherewithal to enter the market earlier.
Forest’s Objection: DPPs’ response consists of evidence that is inadmissible, irrelevant,
and speculative. First, Forest has moved to exclude Ms. DeLeon’s opinions because they are
inadmissible. Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of
Janet K. DeLeon, dated Nov. 17, 2017.
Second, the Generic Entry Early Acceleration Clauses are irrelevant as to this fact, and
the inferences that DPPs draw from them regarding the generics’ beliefs and the probability of an
early entry are speculative and hence cannot create a genuine issue of fact sufficient to defeat
summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is
well established that conclusory statements, conjecture, or speculation are inadequate to defeat a
motion for summary judgment.”) (internal quotation marks omitted).
Third, DPPs responses do not actually contradict the fact in question, which is simply that
several companies had issues in 2015, showing that issues with generic launch often arise.
Thus, DPPs have offered nothing but their purported experts’ ipse dixit to dispute this
point, but purported expert opinion, untethered to the evidence in the case, cannot create a
genuine issue of fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55,
66 (2d Cir. 1997) (“[A]n expert’s report is not a talisman against summary judgment.”); Virgin
Atl. Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that
“expert testimony without a factual foundation cannot defeat a motion for summary judgment”),
aff’d 257 F.3d 256 (2d Cir. 2001); see also Brooke Grp. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209, 242 (1993) (“When an expert opinion is not supported by sufficient facts to
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310
validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render
the opinion unreasonable, it cannot support a jury’s verdict.”). Forest further incorporates by
reference its response to ¶ 318.
Accordingly, the fact should be deemed admitted.
336. Several generic companies had issues launching on time in 2015, demonstrating
that many issues can prevent a timely launch.
Undisputed Record Evidence: Ex. 352, Gupta (Torrent) Dep. 30:9-31:10 (Torrent did not
begin selling generic Namenda IR until December 2015, two months after it received
final approval from the FDA); Ex. 350, Cavanaugh (Teva) Dep. 58:22-60:23 (Teva was
unable to launch in 2015 due to USP method issues that it was unable to resolve before
its scheduled launch date); Ex. 351, Venkatesan (Wockhardt) Dep. 47:18-51:5
(Wockhardt was unable to obtain final approval from the FDA until September 4, 2015,
and could not launch generic Namenda IR until November 2015, four months after it
could have entered with FDA approval under Wockhardt’s settlement agreement with
Forest).
Response: Denied. Plaintiffs deny the substance of this statement as Amneal, Dr.
Reddy’s, Lupin, Mylan, and Sun launched on the agreed-upon date in in 2015. This is direct
evidence of these companies’ ability to launch on agreed-upon dates.
This statement is also misleading to the extent that it implies that there was an inability
for generics to launch in 2012. As Plaintiffs’ expert, Ms. DeLeon, explained in her deposition,
she does not expect documents demonstrating launch activities to exist from 2012 because the
generic companies would have prioritized the production of other products at that time due to the
agreed-upon 2015 launch date, as 2012 would have been too early to start manufacturing
preparations for a 2015 launch. Litvin Decl. Ex. 456, DeLeon Dep. (Oct. 26, 2017) at 163:5-
164:3. Furthermore, Plaintiffs object to and dispute this statement as misleading as DeLeon
testified that she examined documents from the actual-world launch and used her knowledge of
industry practices and her experience to determine that the same steps could have been taken in
the lead up to a but-for world launch in 2012. See Litvin Decl. Ex. 456, DeLeon Dep. (Oct. 26,
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2017) at 116:1-16, 132:3-13.
Additionally, as admitted by Forest, the settlement agreements contain an early launch
provision allowing each settling generic to come to market earlier than the agreed-upon date
should any of the three following occurrences take place: (1) in the event Forest granted another
generic manufacturer, such as Mylan, an earlier entry date by settlement agreement; (2) in the
event any other generic company, such as Mylan, obtained a final court decision that the ’703
patent was invalid, unenforceable, or non-infringed; or (3) in the event any other generic
company, such as Mylan, launched “at risk” (i.e., during the pendency of the ’703 patent
litigation). As further admitted by Forest, “each Generic Entry Early Acceleration Clause was
valuable to each of the Generic Manufacturers,” “was included in the settlement agreements at
the demand of the Generic Manufacturers,” and “ensured competition amongst the first filing
Generic Manufacturers should any generic have negotiated an earlier settlement date.”
Defendants’ Statement at ¶¶ 351, 352, and 356; O’Shaughnessy Decl. Ex. 121, Elhauge Report at
¶ 8. Plaintiffs agree. These sophisticated, experienced settling generic companies would not have
demanded and received an early entry clause without having a confirmed belief that the three
early launch triggers were reasonably achievable by other generic companies, including Mylan,
that had not yet settled. Further, such clauses could only have “value” to the settling generics and
“ensured competition amongst” the settling generics if such earlier launch outcomes were
reasonably probabilistic.
Plaintiffs object to this statement as irrelevant to the extent the term “Generics” or
“generic companies” is vague and overbroad, including companies that the Plaintiffs are not
alleging would have come to market earlier in the but-for world. e.g. Torrent, Teva, and
Wockhardt. Plaintiffs further object that this statement is vague, failing to define the specific
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“issues,” if any, to which it refers. Plaintiffs further object that this statement is vague to the
extent it fails to specify the dates on which the unspecified “issues” could have prevented launch.
Forest’s Objection: DPPs’ response consists of evidence that is inadmissible, irrelevant,
and speculative. First, Forest has moved to exclude Ms. DeLeon’s opinions because they are
inadmissible. Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of
Janet K. DeLeon, dated Nov. 17, 2017.
Second, the Generic Entry Early Acceleration Clauses are irrelevant as to this fact, and
the inferences that DPPs draw from them regarding the generics’ beliefs and the probability of an
early entry are speculative and hence cannot create a genuine issue of fact sufficient to defeat
summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is
well established that conclusory statements, conjecture, or speculation are inadequate to defeat a
motion for summary judgment.”) (internal quotation marks omitted).
Third, DPPs responses do not actually contradict the fact in question, which is simply that
several companies had issues in 2015, showing that issues with generic launch often arise.
Thus, DPPs have offered nothing but their purported experts’ ipse dixit to dispute this
point, but purported expert opinion, untethered to the evidence in the case, cannot create a
genuine issue of fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55,
66 (2d Cir. 1997) (“[A]n expert’s report is not a talisman against summary judgment.”); Virgin
Atl. Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that
“expert testimony without a factual foundation cannot defeat a motion for summary judgment”),
aff’d 257 F.3d 256 (2d Cir. 2001); see also Brooke Grp. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209, 242 (1993) (“When an expert opinion is not supported by sufficient facts to
validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render
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the opinion unreasonable, it cannot support a jury’s verdict.”). Forest incorporates by reference
its response to ¶ 318.
Accordingly, the fact should be deemed admitted.
GENERIC SETTLEMENTS: NO CONSPIRACY4IV.
A. The Namenda IR Patent Settlements Contained Generic Entry Early
Acceleration Clauses
337. Each of the Generic Manufacturer’s settlement agreements contained a provision
that permitted the Generic Manufacturer’s entry date to automatically accelerate under certain
conditions.
Defendants’ Evidence: Ex. 29, FRX-AT-00000001 at 0023-0024 §§ 4.3-4.5; Ex. 27,
FRX-AT-00000038 at 0061 §§ 4.3-4.5; Ex. 25, FRX-AT-00000076 at 0098 §§ 4.3-4.5;
Ex. 26, FRX-AT-00000112 at 0134 §§ 4.3-4.5; Ex. 24, FRX-AT-00000148 at 0169-0170
§§ 4.3-4.5; Ex. 28, FRX-AT-00000184 at 0207 §§ 4.3-4.5; Ex. 22, FRX-AT-00000218 at
0239-0240 §§ 4.3-4.5; Ex. 31, FRX-AT-00000340 at 0364 §§ 4.3-4.5; Ex. 32, FRX-AT-
00000380 at 0403 §§ 4.3-4.5; Ex. 33, FRX-AT-00000428 at 0450-0451 §§ 4.3-4.5.
Plaintiffs’ Admissions: DPPs’ Opp’n to Mot. to Dismiss at 3, 12.
Response: Admitted in part, denied in part. Admitted that the settlement agreements
with each of the Generic Manufacturers had provisions that accelerated the licensed launch date
in the event of a third party generic launch: (a) after a court decision finding the ‘703 patent
invalid of not infringed by the proposed generic product, (b) after an at-risk generic launch, and
(3) pursuant to a license agreement with Forest. Denied to the extent it implies that the Generics
Manufacturers were unable, without the permission of Forest, to launch their respective products
earlier than the “Launch Date” provided in the Settlement and License Agreement with Forest.
See Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
4 Forest notes that DPPs have expressly abandoned their conspiracy allegations. Direct
Purchaser Class Pls.’ Mem. in Opp’n to Defs.’ Mot. for Summ. J. at 1 n.1, dated December 11,
2017. Nevertheless, as a reservation of rights, Forest responds to DPPs objections.
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DPPs’ response does not provide any evidentiary basis to contest the statement and does not
actually contest the statement, but instead attempts to “contextualize or dispute the relevance of
the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Rather than raising a dispute, DPPs’ reponse actually admits the
fact. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
338. In the event Forest granted another generic manufacturer an earlier entry date via
a settlement and license agreement, the Generic Entry Early Acceleration Clause provided for the
settling Generic Manufacturer’s entry date to automatically accelerate to match the earlier entry
date.
Defendants’ Evidence: Ex. 29, FRX-AT-00000001 at 0023-0024 § 4.3; Ex. 27, FRX-
AT-00000038 at 0061 § 4.3; Ex. 25, FRX-AT-00000076 at 0098 § 4.3; Ex. 26, FRX-AT-
00000112 at 0134 § 4.3; Ex. 24, FRX-AT-00000148 at 0169-0170 § 4.3; Ex.28,
FRX-AT-00000184 at 0207 § 4.3; Ex. 22, FRX-AT-00000218 at 0239-0240 § 4.3; Ex.
31, FRX-AT-00000340 at 0364 § 4.3; Ex. 32, FRX-AT-00000380 at 0403 § 4.3; Ex. 33,
FRX-AT-00000428 at 0450-0451 § 4.3.
Response: Admitted in part, denied in part. Admitted that the settlement agreements
with each of the Generic Manufacturers had provisions that accelerated the licensed launch date
in the event of a third party generic launch: (a) after a court decision finding the ‘703 patent
invalid of not infringed by the proposed generic product, (b) after an at-risk generic launch, and
(3) pursuant to a license agreement with Forest. Denied to the extent it implies that the Generics
Manufacturers were unable, without the permission of Forest, to launch their respective products
earlier than the “Launch Date” provided in the Settlement and License Agreement with Forest.
See Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement and does not
actually contest the statement, but instead attempts to “contextualize or dispute the relevance of
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the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Rather than raising a dispute, DPPs’ reponse actually admits the
fact. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
339. In the event a third party obtained a final court decision that the ‘703 patent was
invalid, unenforceable, or non-infringed, the Generic Entry Early Acceleration Clause provided
for each of the settling Generic Manufacturer’s entry date to automatically accelerate to match
the earlier entry date.
Defendants’ Evidence: Ex. 29, FRX-AT-00000001 at 0024 § 4.4; Ex. 27, FRX-
AT-00000038 at 0061 § 4.4; Ex. 25, FRX-AT-00000076 at 0098 § 4.4; Ex. 26, FRX-
AT-00000112 at 0134 § 4.4; Ex. 24, FRX-AT-00000148 at 0170 § 4.4; Ex. 28, FRX-
AT-00000184 at 0207 § 4.4; Ex. 22, FRX-AT-00000218 at 0240 § 4.4; Ex. 31, FRX-
AT-00000340 at 0364-0365 § 4.4; Ex. 32, FRX-AT-00000380 at 0404 § 4.4; Ex. 33,
FRXAT-00000428 at 0451 § 4.4.
Response: Admitted in part, denied in part. Admitted that the settlement agreements
with each of the Generic Manufacturers had provisions that accelerated the licensed launch date
in the event of a third party generic launch: (a) after a court decision finding the ‘703 patent
invalid of not infringed by the proposed generic product, (b) after an at-risk generic launch, and
(3) pursuant to a license agreement with Forest. Denied to the extent it implies that the Generics
Manufacturers were unable, without the permission of Forest, to launch their respective products
earlier than the “Launch Date” provided in the Settlement and License Agreement with Forest.
See Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement and does not
actually contest the statement, but instead attempts to “contextualize or dispute the relevance of
the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Rather than raising a dispute, DPPs’ reponse actually admits the
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fact. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
340. In the event a third party launched a product “at-risk”—that is, during the patent
period and prior to a court finding of invalidity, unenforceability, or non-infringement—the
Generic Entry Early Acceleration Clause allowed each settling Generic Manufacturer to
accelerate its entry date and enter at-risk.
Defendants’ Evidence: Ex. 29, FRX-AT-00000001 at 0024 § 4.5; Ex. 27, FRX-AT-
00000038 at 0061-0062; Ex. 25, FRX-AT-00000076 at 0098-0099; Ex. 26, FRX-AT-
00000112 at 0134-0135; Ex. 24, FRX-AT-00000148 at 0170-0171; Ex. 28, FRX-AT-
00000184 at 0207-0208; Ex. 22, FRX-AT-00000218 at 0240-0241; Ex. 31, FRX-AT-
00000340 at 0365-0366; Ex. 32, FRX-AT-00000380 at 0404; Ex. 33, FRX-AT-00000428
at 0451-0452.
Response: Admitted in part, denied in part. Admitted that the settlement agreements
with each of the Generic Manufacturers had provisions that accelerated the licensed launch date
in the event of a third party generic launch: (a) after a court decision finding the ‘703 patent
invalid of not infringed by the proposed generic product, (b) after an at-risk generic launch, and
(3) pursuant to a license agreement with Forest. Denied to the extent it implies that the Generics
Manufacturers were unable, without the permission of Forest, to launch their respective products
earlier than the “Launch Date” provided in the Settlement and License Agreement with Forest.
See Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement and does not
actually contest the statement, but instead attempts to “contextualize or dispute the relevance of
the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Rather than raising a dispute, DPPs’ reponse actually admits the
fact. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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B. Generic Entry Early Acceleration Clauses Provided the Same Protection that
Generics Manufacturer Were Entitled to Under Hatch-Waxman
341. Under the Hatch-Waxman statutory scheme, each first filing Generic
Manufacturer, with an approved ANDA share the 180-day exclusivity period and may enter the
market concurrently with the other first filing generic manufacturers.
Plaintiffs’ Admissions: Ex. 193, Amended Expert Report of Dr. Russell L. Lamb
(“Lamb Rep. I”) ¶ 20.
Public Sources: Maryll Toufanian, J.D., Capt. Martin Shumer, R.Ph., Hatch-Waxman
101, FDA, https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/Small
BusinessAssistance/UCM445610.pdf
Response: Admitted in part and denied in part. Admitted that under the current
Hatch-Waxman statutory scheme, a first-filing generic manufacturer with an approved ANDA is
not prevented by the 180-day exclusivity period from entering the market concurrently with
other first-filing generic manufacturers. Denied to the extent the statement implies that the
circumstances behind the entry of each individual generic manufacturer would be the same. For
example, one first-filing generic manufacturer may enter pursuant to a license while a second
generic manufacturer without a license may be faced with the prospect of entering at risk of
patent damages if it were to choose to enter the market concurrently with the first generic
manufacturer.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Additionally, DPPs have abandoned at-risk launch as a proposed
but-for world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an
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alternative settlement agreement between Forest and Mylan; and (2) Mylan prevailing in the
patent litigation.). Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
342. The Generic Entry Early Acceleration Clause included in each settlement
agreement provided each first filing Generic Manufacturers with the same rights to enter the
market that each Generic Manufacturer had under the Hatch-Waxman statutory scheme.
Undisputed Record Evidence: Ex. 352, Gupta (Torrent) Dep. 53:16-54:5, 56:8-15.
Defendants’ Evidence: Ex. 29, FRX-AT-00000001 at 0023-0024 §§ 4.3-4.5; Ex. 27,
FRX-AT-00000038 at 0061 §§ 4.3-4.5; Ex. 25, FRX-AT-00000076 at 0098 §§ 4.3-4.5;
Ex. 26, FRX-AT-00000112 at 0134 §§ 4.3-4.5; Ex. 24, FRX-AT-00000148 at 0169-0170
§§ 4.3-4.5; Ex. 28, FRX-AT-00000184 at 0207 §§ 4.3-4.5; Ex. 22, FRX-AT-00000218 at
0239-0240 §§ 4.3-4.5; Ex. 31, FRX-AT-00000340 at 0364 §§ 4.3-4.5; Ex. 32, FRX-AT-
00000380 at 0403 §§ 4.3-4.5; Ex. 33, FRX-AT-00000428 at 0450-0451 §§ 4.3-4.5; Ex.
54, Fowdur Rep. ¶¶ 78-79, 83.
Plaintiffs’ Admissions: Ex. 193, Lamb Rep. I ¶ 20.
Public Sources: Maryll Toufanian, J.D., Capt. Martin Shumer, R.Ph., Hatch-Waxman
101, FDA, https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/Small
BusinessAssistance/UCM445610.pdf
Response: Denied. Under the current Hatch-Waxman statutory scheme, a first-filing
generic manufacturer with an approved ANDA is not prevented by the 180-day exclusivity
period from entering the market concurrently with other first-filing generic manufacturers. There
is no distinction under the Hatch-Waxman statute regarding the circumstances behind the entry
of each individual first-filing generic manufacturer. For example, one first-filing generic
manufacturer may enter pursuant to a license while a second generic manufacturer without a
license may be faced with the prospect of entering at risk of patent damages if it were to choose
to enter the market concurrently with the first generic manufacturer.
Forest’s Objection: DPPs’ response consists of improper argument, but no evidentiary
basis to contest the statement. Additionally, DPPs have abandoned at-risk launch as a proposed
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but-for world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an
alternative settlement agreement between Forest and Mylan; and (2) Mylan prevailing in the
patent litigation.). Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at
186 n.3; Fed. R. Civ. P. 56(e)(2)
C. No Evidence of a Conspiracy with or Between Generic Defendants
343. Plaintiffs have identified no evidence that the settlement agreements were a
product of an agreement between and among each Generic Manufacturer.
Plaintiffs have not identified any such evidence.
Response: The settlement agreements themselves, which ensure that any agreed delay
of market entry by the generic would be conditioned upon all other generics’ agreement to delay
market entry, is direct evidence of a conspiracy among generic manufacturers to delay entry,
organized and implemented through Forest, acting as hub. See Litvin Decl. Ex. 319, Ryan Dep.
(Sept. 7, 2017) at 207:10-21 (“[S]o they agreed to withhold a launch until three months prior to
the expiry”); cf. settlement terms “Confidentiality”, “Launch Date”, “Third Party Licenses”,
“Impact of Granting Certain Licenses to Third Parties”, “Effect of Final Court Decision”, and
“Effect of Launch At Risk” in O’Shaughnessy Decl. Ex. 22 (Amneal) at 222, 236, 239-241;
O’Shaughnessy Decl. Ex. 23 (Apotex) at 278, 292, 295-297; O’Shaughnessy Decl. Ex. 24
(Upsher-Smith) at 152, 166, 169-172; O’Shaughnessy Decl. Ex. 25 (Wockhardt) at 80, 94, 97-
100; O’Shaughnessy Decl. Ex. 26 (Sun) at 116, 130, 133-135; O’Shaughnessy Decl. Ex. 27
(Cobalt) at 42, 57, 60-63; O’Shaughnessy Dec. Ex. 28 (Teva) at 188, 202, 207-209;
O’Shaughnessy Decl. Ex. 29 (Dr. Reddy’s) at 5, 19, 23-25; O’Shaughnessy Decl. Ex. 30
(Torrent) at 312-313, 322, 325-327; O’Shaughnessy Decl. Ex. 31 (Lupin) at 344, 360, 364-367;
O’Shaughnessy Decl. Ex. 32 (Orchid) at 384, 398, 403-405; O’Shaughnessy Decl. Ex. 33
(Mylan) at 432, 447, 450-452, for circumstantial evidence of that conspiracy.
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Forest’s Objection: DPPs have expressly averred that “Plaintiffs are not pursuing their
inter-generic conspiracy claim (Count 4 of Plaintiffs’ First Amended Class Action Complaint,
ECF No. 26).” Opp. at 1 n.1, dated Dec. 11, 2017. DPPs’ response thus consists of improper
argument and advances a claim that they have expressly abandoned. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
344. Plaintiffs have identified no evidence that any Generic Manufacturer
communicated with one another during their negotiations of the Namenda Patent Settlements
Agreements.
Plaintiffs have not identified any such evidence.
Response: Denied. During negotiations with Forest, Generic Manufacturers were
aware of the status and/or terms of other generic defendants’ patent litigation settlement
negotiations. See Litvin Decl. Ex. 344, Gupta (Torrent) Dep. (June 15, 2017) at 103:25-105:8;
Litvin Decl. Ex. 250,Torrent-Memantine00009196-198 (Gupta Dep. Ex. 15); Litvin Decl. Ex.
458, Forest Laboratories, Inc. SEC Form 10-Q for the Quarterly Period Ended September 30,
2009 at 15, available at: https://www.sec.gov/Archives/edgar/data/38074/000003807409000048/
forest10qsep09.htm; O’Shaughnessy Dec. Ex. 29 (Dr. Reddy’s) at 26 (License Agreement § 7.5);
Litvin Decl. Ex. 319, Ryan (Sept. 7, 2017) Dep. at 318:19-319:10; Litvin Decl. Ex. 322, FRX-
AT-04247293-295 (Ryan Dep. Ex. 44); Litvin Decl. Ex. 359, Silber (Mylan) Dep. (Aug. 3, 2017)
at 24:8-19; 25:1-20; Litvin Decl. Ex. 303, Wilk (Orchid) Dep. (Aug. 17, 2017) at 81:7-15; 84:1-
14; 97:23-99:5; Litvin Decl. Ex. 305, FRX-AT-04395427-429 (Wilk Dep. Ex. 8); Litvin Decl.
Ex. 307, FRX-AT-04284560-561 (Wilk Dep. Ex. 10); Litvin Decl. Ex. 308, FRX-AT-04321799-
835 at 799 (Wilk Ex. 16); Litvin Decl. Ex. 359, Silber (Mylan) Dep. (Aug. 3, 2017) at 60:10-20.
Further, the generics all allowed Forest to share the terms of their settlement agreements with
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other generics. See Litvin Decl. Ex. 252, Agovino Dep. at 77:17-79:2; see also Litvin Decl. Ex
334, Nadkarni (Sun) Dep. (Aug. 31, 2017) at 171:14-172:8; Litvin Decl. Ex. 339, Rabinovic
(Teva) Dep. (July 18, 2017) at 74:22-76:7; 76:24-77:12; 78:17-79:16; Litvin Decl. Ex. 351,
Venkatesan (Wockhardt) Dep. (July 13, 2017) at 165:9-167:3; Litvin Decl. Ex 265, McCormick
(DRL) Dep. (July 20, 2017) at 152:7-19; 153:9-157:3; Litvin Decl. Ex 344, Gupta (Torrent) Dep.
(June 15, 2017) at 179:13-180:20.
Forest’s Objection: DPPs have expressly averred that “Plaintiffs are not pursuing their
inter-generic conspiracy claim (Count 4 of Plaintiffs’ First Amended Class Action Complaint,
ECF No. 26).” Opp. at 1 n.1, dated Dec. 11, 2017. DPPs’ response thus consists of improper
argument and advances a claim that they have expressly abandoned. Moreover, evidence that
generics’ were “aware of the status” of other negotiations does not dispute the stated fact.
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
345. Each Generic Manufacturer who testified in this case stated they did not speak
with other Generic Manufacturers about their negotiations with Forest during the Patent
Litigation, and there is no contrary evidence.
Undisputed Record Evidence: Ex. 328, McCormick (DRL) Dep. 152:20-153:8 (“I was
not aware of any discussions that happened between Dr. Reddy’s and others, ANDA
filers.”); Ex. 329, Silber (Mylan) Dep. 93:3-8; Ex. 331, Rabinovic (Teva) Dep. 44:1845:5
(“Q. At no time during those settlement negotiations did Teva communicate with any
other generic defendants in that case regarding the terms of the Namenda settlement
agreement that they were entering into with Forest. Correct? ... A. That is correct.”); Ex.
352, Gupta (Torrent) Dep. 60:12-15 (“Torrent didn’t discuss the terms of this settlement
agreement with other generic manufacturers, did it? A. No, it did not.”); Ex. 351,
Venkatesan (Wockhardt) Dep. 159:2-160:4 (A. “It is my understanding in speaking with
our former general counsel that we had no knowledge what other defendants are [sic]
doing [in their settlement negotiations with Forest].)”; Ex. 334, Wilk (Orgenus) Dep.
210:8-12; Ex. 327, Gupta (Amneal) Dep. 119:8-119:9 (Q. “At no time during those
negotiations did Amneal communicate with any of the other generic defendants regarding
the terms of any Namenda settlement agreements that they were negotiating, correct? A.
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Yes.”); Ex. 330, Nadkarni (Sun) Dep. 129:18-131:3 (“Q. Before Sun settle the patent
litigation, did it discuss the terms of the patent litigation settlements with any other
generic memantine manufacturers? A. No.”).
Response: Denied. Certain designees of the Generic Manufacturers testified at
deposition that they did not have direct communications with other generics about the terms of
their settlement agreements with Forest and/or the details of their settlement negotiations with
Forest. Others testified that they had no knowledge of such communications. Still others were
not asked specifically about their communications with other manufacturers. See Response to ¶
344.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. DPPs have, as admitted in their Memorandum in Opposition to Defendants’
Motion for Summary Judgment, abandoned their inter-generic conspiracy claim. Opp. At 1 n. 1.
Forest incorporates by reference its response to ¶ 344. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
346. Forest never engaged in joint settlement negotiations with multiple Generic
Manufacturers.
Defendants’ Evidence: Ex. 340, Agovino Dep. 80:12-81:1, 147:13-16.
Response: Denied to the extent it implies the generics were not aware of the status
and/or nature of the other generics’ settlement agreements and/or negotiations, for the reasons
stated in Response to ¶ 344.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. DPPs have, as
admitted in their Memorandum in Opposition to Defendants’ Motion for Summary Judgment,
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abandoned their inter-generic conspiracy claim. Opp. at 1 n. 1. Forest incorporates by reference
its response to ¶ 344. Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2).
347. Forest refused to offer any earlier entry date than three months prior to patent
expiration including any regulatory exclusivities to any Generic Manufacturer.
Undisputed Record Evidence: Ex. 329, Silber (Mylan) Dep. 26:5-11.
Defendants’ Evidence: Ex. 339, Ryan (Sep. 7) Dep. 200:5-15, 209:2-9; Ex. 340,
Agovino Dep. 75:19-76:6; Ex. 34, KE00000169 (“As discussed, Forest and Merz are
unwilling to pay Apotex, a non-first filer, any attorney’s fees. They are unwilling to allow
any first filer to launch more than 3 months before the patent expires, so are even less
willing to allow a non-first-filer to do so.”).
Response: Denied. Forest offered Teva, Upsher-Smith, Orchid, Lupin, and Sun a
license entry date four (4) months prior to expiration of the ‘703 patent including any regulatory
exclusivities. See Litvin Decl. Ex. 391, Rabinovic Dep. Ex. 20, FRX-AT-03633179-187 at 181;
Litvin Decl. Ex. 388, FRX-AT-04314619-629 at 623; Litvin Decl. Ex. 382, FRX-AT-
04315180-193 at 183-184; Litvin Decl. Ex. 390, FRX-AT-0431519406 at 199. Further denied to
the extent defendants are suggesting that any bargaining position they held in the reverse
payment negotiations would have been equally maintained in the but-for negotiations without a
reverse payment.
Forest’s Objection: None of DPPs’ cited evidence disputes the above fact because none
of the evidence supports DPPs’ claim that Forest would have ultimately settled on a date earlier
than three months prior to patent expiry (including any regulatory exclusivities). Specifically,
Teva’s corporate representative, when asked about Litvin Decl. Ex. 391, stated that the
individual negotiating the settlement on behalf of Teva believed Forest’s settlement offer “was
always three months.” O’Shaughnessy Decl. II Ex. 383, Rabinovic (Teva) Dep. at 90:9-91:1.
Furthermore, Litvin Decl. Ex. 388 consists of an internal email amongst Forest employees
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discussing draft settlement agreements. Additionally, Litvin Decl. Exs. 388 and 390 evidence
negotiations with third parties prior to the Markman decisions that largely adopted Forest’s claim
construction proposals. Following the Markman Report and Recommendation issued by Judge
Stark, Forest re-contacted the generic manufacturers and notified them Forest was only offering
three months early entry. See O’Shaughnessy Decl. II Ex. 384, Ex. 12 to Venkatesan
(Wockhardt) Dep. (“Following the decision on claim construction, Forest informs Wockhardt
that it is contacting each defendant about settling. The new proposal from Forest is 3 months
early entry. . . . Forest refuses to negotiate the entry date any further, and the issue is not
addressed again during negotiations.”); Litvin Decl. Ex. 351, Venkatesan (Wockhardt) Dep.
222:4-21 (indicating that Forest “changed the offer from four months to three months following
the Markman decision”). Furthermore, Forest’s counsel followed up on the discussion from
Litvin Decl. Ex. 382 in August of 2009, at which time Forest’s counsel offered Lupin three
months early entry, consistent with its position regarding acceptable settlement terms after the
Markman decision. See Litvin Decl. Ex. 381, KE00000203, KE00000204-0235. None of the
above cited evidence disputes that Forest’s position was that Forest was “unwilling to allow any
first filer to launch more than 3 months before the patent expires” after Forest received the
favorable Markman decision. O’Shaughnessy Decl. I Ex. 34, KE00000169 (August 2009 email).
As such there is no factual dispute and the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
D. Settlements were in Each Generic Defendant’s Individual Best Interest
348. Each Generic Manufacturer desired to launch its generic Namenda product as
early as possible and the Generic Entry Early Acceleration Clause permitted each first-filing
Generic Manufacturer to enter as early as any other generic manufacturer.
Undisputed Record Evidence: Ex. 331, Rabinovic (Teva) Dep. 42:24-43:12; Ex. 328,
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McCormick (DRL) Dep. 157:4-24; Ex. 327, Gupta (Amneal) Dep. 118:17-25; Ex. 330,
Nadkarni (Sun) Dep. 127:14-18; Ex. 351, Venkatesan (Wockhardt) Dep. 168:22-169:3.
Defendants’ Evidence: Ex. 29, FRX-AT-00000001 at 0023-0024 §§ 4.3-4.5; Ex. 27,
FRX-AT-00000038 at 0061 §§ 4.3-4.5; Ex. 25, FRX-AT-00000076 at 0098 §§ 4.3-4.5;
Ex. 26, FRX-AT-00000112 at 0134 §§ 4.3-4.5; Ex. 24, FRX-AT-00000148 at 0169-0170
§§ 4.3-4.5; Ex. 28, FRX-AT-00000184 at 0207 §§ 4.3-4.5; Ex. 22, FRX-AT-00000218 at
0239-0240 §§ 4.3-4.5; Ex. 31, FRX-AT-00000340 at 0364 §§ 4.3-4.5; Ex. 32, FRX-AT-
00000380 at 0403 §§ 4.3-4.5; Ex. 33, FRX-AT-00000428 at 0450-0451 §§ 4.3-4.5.
Response: Admitted in part, denied in part. Admitted that each Generic Manufacturer
desired to launch its generic Namenda product as early as possible. Denied to the extent it
implies that absent the agreement with Forest, the generics could not have launched their
respective products earlier than the “Launch Date” provided in the Settlement and License
Agreement with Forest, for the reasons stated in Response to ¶ 81.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶ 81.
DPPs’ response does not provide any evidentiary basis to contest the statement and does not
actually contest the statement, but instead attempts to “contextualize or dispute the relevance of
the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
349. First filing exclusivity is valuable to generic manufacturers because it provides
generic manufactures with a first mover advantage.
Plaintiffs’ Admissions. Ex. 189, FRX-AT-01775574, Berndt (NYAG) Decl. ¶ 18
(describing first mover advantage and noting, “Thus, the right to be the exclusive generic
for a 180-day period is a valuable one.”).
Response: Admitted.
350. Because of the first mover advantage, the first generic manufacturer (or cohort of
generic manufacturers) is able to capture and maintain a large share of the market.
Plaintiffs’ Admission: Ex. 349, Berndt Dep. 214:25-216:3 (“But first mover advantage
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typically means that, that you can capture more market share if you’re the first entrant.”).
Public Sources. Federal Trade Commission, Authorized Generic Drugs: Short-Term
Effects and Long-Term Impact 103-04 (August 2011).
Response: Denied insofar as it does not define what “market” generic first filers
would be able to capture and maintain as result of obtaining a first mover advantage.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
351. Each Generic Entry Early Acceleration Clause was valuable to each of the
Generic Manufacturers.
Defendants’ Evidence: Ex. 194, FRX-AT-03626446 at 6447 (“USL would like ‘most-
favored nation’ status for clauses pertaining to pre-booking activities in Sec. 2.2.... USL’s
view is that we cannot be at a competitive disadvantage to other defendants who settle.”).
Undisputed Record Evidence: Ex. 328, McCormick (DRL) Dep. 157:4-13; Ex. 327,
Gupta (Amneal) Dep. 118:17-119:4; Ex. 330, Nadkarni (Sun) Dep. 127:23-128:7; Ex.
331, Rabinovic (Teva) Dep. 42:24-44:17.
Response: Admitted.
352. Each Generic Entry Early Acceleration Clause was included in the settlement
agreements at the demand of the Generic Manufacturers.
Defendants’ Evidence: Ex. 339, Ryan (Sep. 7) Dep. 202:10-203:11 (“Q. When you say
they demand it, was it your expectation that there were generics that would not have
settled the patent litigation without those most favored nation clauses? ... A. I don’t think
any of them would have settled without it.”), 251:13-252:10, Ex. 367, Ryan (Nov. 7)
Dep. 375:22-376:16 (“The generics require a most favored nation clause.”); Ex. 340,
Agovino Dep. 160:24-161:6 (“Q. Why did the settlement agreements with the Namenda
first filers include acceleration provisions? A. The generic companies wouldn’t have
settled without those provisions.”); Ex. 194, FRX-AT-03626446 at 6447 (“USL would
like ‘most-favored nation’ status for clauses pertaining to pre-booking activities in Sec.
2.2….USL’s view is that we cannot be at a competitive disadvantage to other defendants
who settle.”).
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Undisputed Record Evidence: Ex. 328, McCormick (DRL) Dep. 157:4-13 (“Q. So Dr.
Reddy’s got the MFN – most favored nations, with the respect to the launch date, is that
right? A. Yes. Q. Would there be a reason for Dr. Reddy’s not to expect that other
generic companies would want the same thing? A. Of course everyone wants the best
term for themselves.”); Ex. 331, Rabinovic (Teva) Dep. 43:14-44:12 (“[W]e would want
to have [a Generic Entry Early Acceleration] provision[] in a settlement agreement
because ... we’d want to make sure that we were getting as good a deal as anybody else
was.”).
Response: Admitted.
353. Dr. Fowdur’s economic analysis that the settlement agreements were in each
Generic Manufacturer’s independent self-interest stands unrebutted, as none of Plaintiffs’ experts
have analyzed the issue.
Defendants’ Evidence: Ex. 54, Fowdur Rep. ¶¶ 83-84.
Plaintiffs’ Admissions: Ex. 335, Elhauge (Sept. 29) Dep. 39:16-19 (“Q. You are offering
no opinion on whether there was an overarching conspiracy between Forest and all of the
generics. Correct? A. Correct.”).
Response: Denied. The Generic Manufacturers testified that it was in their individual
best interests to launch their products as quickly as possible, not to delay launch as the
agreements mandated. See Litvin Decl. Ex. 253, K. Gupta (Amneal) Dep. (July 27, 2017) at
138:5-11; Litvin Decl. Ex. 334, Nadkarni (Sun) Dep. (Aug. 31, 2017) at 69:13-25; 81:17-21;
Litvin Decl. Ex. 339, Rabinovic (Teva) Dep. (July 18, 2017) at 79:18-80:2; Litvin Decl. Ex. 265,
McCormick (DRL) Dep. (July 20, 2017) at 132:22-133:3; 151:14-152:5; Litvin Decl. Ex. 344, S.
Gupta (Torrent) Dep. (June 15, 2017) at 31:4-34:10; Litvin Decl. Ex. 351, Venkatesan
(Wockhardt) Dep. (July 13, 2017) at 168:22-169:3; 208:3-13; Litvin Decl. Ex. 303, Wilk
(Orchid) Dep. (Aug. 17, 2017) at 59:3-15; 62:13-15; 120:9-121:15. Dr. Fowdur’s opinion is
therefore inconsistent with the testimony of the Generic Manufacturers whose interests she
purports to analyze.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. DPPs have not cited
any expert testimony that rebuts the stated fact. Accordingly, the fact should be deemed
admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
E. No Motive for Generic Defendants to Conspire
354. Each Generic Manufacturer was able to secure the earliest entry date Forest would
have been willing to prove through unilateral negotiation of a Generic Entry Early Acceleration
Clause.
Undisputed Record Evidence: Ex. 328, McCormick (DRL) Dep. 152:20-153:8, 157:4-
24; Ex. 329, Silber (Mylan) Dep. 93:3-8; Ex. 331, Rabinovic (Teva) Dep. 42:24-45:5; Ex.
352, Gupta (Torrent) Dep. 60:12-15; Ex. 351, Venkatesan (Wockhardt) Dep. 159:2160:4,
168:22-169:3; Ex. 334, Wilk (Orgenus) Dep. 210:8-12; Ex. 327, Gupta (Amneal) Dep.
118:17-119:19; Ex. 330, Nadkarni (Sun) Dep. 127:14-18, 129:18-131:3.
Defendants’ Evidence: Ex. 340, Agovino Dep. 80:12-81:1 (“Q. Mr. Agovino, how is the
effect of this provision any different than Forest negotiating jointly with more than one
generic? ... A. The difference is that these were terms that were finalized, and each
company, each generic company separately negotiated these very vigorously. And it’s
very different than putting people in the same rom. This was used if, for example, they
wanted to know did you give a launch date that was earlier to someone else, and we said
– we would have to say no, we didn’t.”), 147:13-16; Ex. 29, FRX-AT-00000001 at 0023-
0024 §§ 4.3-4.5; Ex. 27, FRX-AT-00000038 at 0061 §§ 4.3-4.5; Ex. 25, FRX-AT-
00000076 at 0098 §§ 4.3-4.5; Ex. 26, FRX-AT-00000112 at 0134 §§ 4.3-4.5; Ex. 24,
FRX-AT-00000148 at 0169-0170 §§ 4.3-4.5; Ex. 28, FRX-AT-00000184 at 0207 §§ 4.3-
4.5; Ex. 22, FRX-AT-00000218 at 0239-0240 §§ 4.3-4.5; Ex. 31, FRX-AT-00000340 at
0364 §§ 4.3-4.5; Ex. 32, FRX-AT-00000380 at 0403 §§ 4.3-4.5; Ex. 33, FRX-AT-
00000428 at 0450-0451 §§ 4.3-4.5.
Response: Denied as incorrect. Forest drafted the initial settlement agreements, all of
which contained the same provisions accelerating the “Launch Date” in the event of a court
decision of invalidity or noninfringement of the ‘703 Patent, at risk launch by a third party
generic, or a licensed launch by a third party generic. See Litvin Decl. Ex. 319, Ryan Dep. (Sept.
7, 2017) at 194:23-195:12; Litvin Decl. Ex. 252, Agovino Dep. (Sept. 12, 2017) at 55:4-21;
Litvin Decl. Ex. 321, Ryan Dep., Ex. 23, FRX-AT-0426910-434. These provisions were
included in the final settlement agreements of all settling generics: (Amneal) O’Shaughnessy
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Decl. Ex. 22; (Apotex) O’Shaughnessy Decl. Ex. 23; (Upsher-Smith) O’Shaughnessy Decl. Ex.
24; (Wockhardt) O’Shaughnessy Decl. Ex. 25; (Sun) O’Shaughnessy Decl. Ex. 26; (Cobalt)
O’Shaughnessy Decl. Ex. 27; (Teva) O’Shaughnessy Decl. Ex. 28; (Dr. Reddy’s)
O’Shaughnessy Decl. Ex. 29; (Torrent) O’Shaughnessy Decl. Ex. 30; (Lupin) O’Shaughnessy
Decl. Ex. 31; (Orchid) O’Shaughnessy Decl. Ex. 32; (Mylan) O’Shaughnessy Decl. Ex. 33.
Further, Forest offered Teva, Upsher-Smith, Orchid, Lupin, and Sun a license entry date
four (4) months prior to expiration of the ‘703 patent including any regulatory exclusivities. See
Litvin Decl. Ex. 391, Rabinovic (Teva) Dep. Ex. 20, FRX-AT-03633179-187 at 181; Litvin
Decl. Ex. 388, FRX-AT-04314619-629 at 623; Litvin Decl. Ex. 382, FRX-AT-04315180-193 at
183-184; Litvin Decl. Ex. 390, FRX-AT-04315194-206 at 199.
Moreover, had Forest not agreed to pay Mylan a $32.5 reverse payment to delay Mylan’s
entry, the parties would have entered into an agreement that permitted Mylan to enter on
November 2, 2012, or a range around that date that would have been financially beneficial to
both parties. O’Shaughnessy Decl. Ex. 121 Elhauge Rpt. ¶¶ 2, 64, 65 and §IV. Further denied
because each ANDA filer demanded and received a contingent launch provision that enabled it
to launch under a license on the same day as any other ANDA filer, if Forest agreed with any
other ANDA filer to a launch date earlier than three months prior to patent expiry, thereby
deferring the final determination of the launch date to the last ANDA filer to settle. See Litvin
Decl. Ex. 252, Agovino Dep. at 160:24-161:3 (“the generic companies wouldn’t have settled
without those provisions.”); Litvin Decl. Ex. 318, Ryan (Nov. 7, 2011) Dep. at 374:17-376:25;
Litvin Decl. Ex. 176, Forest-Mylan Meeting, February 11, 2010, FRX-AT-03882414 at 415-420.
(The Forest-Mylan settlement presentation explained that if Mylan that if they successfully
invalidated the ‘703 patent or launched at risk, it would cause “immediate genericization” of the
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market.); O’Shaughnessy Decl. Ex. 22, Amneal Settlement Agreement, FRX-AT-00000218-252
at 236 (L.A. Section 1.14 “Launch Date”), 239 (L.A. Section 4.2 “Third Party Licenses”), 239-
240 (L.A. Section 4.3 “Impact of Granting Certain Licenses to Third Parties”); O’Shaughnessy
Decl. Exs. 23-33 (remainder of Namenda IR patent settlements).
Prof. Elhauge opines that the contingent launch provisions provided Mylan with leverage
to demand a large reverse payment from Forest, because if Mylan, the last to settle, continued to
litigate against Forest and won, it would trigger the entry of the other generic settlers and
“eliminate the vast majority of Forest’s brand profits for Namenda.” O’Shaughnessy Decl. Ex.
121, Elhauge Report ¶¶8-9.
Forest’s Objection: Forest hereby incorporates its objection to DPPs’ response to ¶¶
332 and 347. DPPs’ response consists of evidence that is inadmissible, irrelevant, and
speculative. First, Prof. Elhauge’s opinions are inadmissible because they do not comport with
Actavis, they are speculative, inconsistent, and contradict the evidence, and they usurp the role of
the jury. Mem. of Law in Supp. of Forest’s Mot. to Exclude Certain Opinions and Proposed
Testimony of Prof. Einer Elhauge, dated Nov. 17, 2017. Prof. Elhauge also has confirmed that
just because his model finds a potential settlement to be feasible or rational, that does not mean
the settlement would happen: “you always have to compare it to what [the parties’] own
perception of but-for alternatives were.” O’Shaughnessy Decl. II Ex. 386, Elhauge (Nov. 10)
Dep. 259:13-260:2. In any event, DPPs have asserted that Prof. Elhauge will not testify as to
“the but-for settlement that parties would have reached,” and thus will not offer the cited
testimony at trial in order to rebut this fact. Direct Purchaser Class Pls.’ Mem. of Law in Opp’n
to Forest’s Mot. to Exclude Certain Opinions and Proposed Testimony of Prof. Einer Elhauge,
dated Dec. 11, 2017 (emphasis in original).
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Forest further objects because the first paragraph of DPPs’ response, that the generic
manufacturers did not negotiate for the ability to launch at the earliest date any other generic
manufacturer was permitted to enter, directly conflicts with the third paragraph of DPPs’
response, in which DPPs assert that “each ANDA filer demanded and received a contingent
launch provision that enabled it to launch under a license on the same day as any other ANDA
filer.”
Additionally, to the extent DPPs argue that any generic manufacturer would have
launched at-risk in their response, DPPs have abandoned at-risk launch as a proposed but-for
world in their briefs. See Opp. at 39-45 (DPPs assert two but-for worlds: (1) an alternative
settlement agreement between Forest and Mylan; and (2) Mylan prevailing in the patent
litigation.).
Furthermore, Forest objects because the evidence cited for the argumentative proposed
facts in DPPs final paragraph is the ipse dixit opinion testimony of DPPs’ proposed expert,
which cites no evidence in the case, and thus cannot create a genuine issue of fact sufficient to
defeat summary judgment. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The
law is well established that conclusory statements, conjecture, or speculation are inadequate to
defeat a motion for summary judgment.”) (internal quotation marks omitted); Raskin v. Wyatt
Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report is not a talisman against summary
judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y.
1999) (holding that “expert testimony without a factual foundation cannot defeat a motion for
summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001); see also Brooke Grp. v. Brown &
Williamson Tobacco Corp., 509 U.S. 209, 242 (1993) (“When an expert opinion is not supported
by sufficient facts to validate it in the eyes of the law, or when indisputable record facts
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contradict or otherwise render the opinion unreasonable, it cannot support a jury’s verdict.”).
Indeed, Plaintiffs’ expert, Einer Elhauge, freely conceded that as long as an earlier-in-time settler
had procured an acceleration clause in their agreement (which they had), later-in-time settling
generics had the same leverage as Mylan due to their ability to fully genericize the market.
O’Shaughnessy Decl. II Ex. 387, Elhauge (Sept. 29) Dep. at 107:12-108:22.
Forest also objects that the second paragraph has nothing to do with whether the Generic
Entry Early Acceleration Clauses permitted entry at the earliest date that Forest actually agreed
to with any generic manufacturer, and therefore it does not dispute the stated fact. Because
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement, the fact should be deemed admitted. SESAC, 1 F.
Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
355. The Generic Entry Early Acceleration Clause made each generic manufacturer
indifferent to the entry dates negotiated by any other generic manufacturer.
Undisputed Record Evidence: Ex. 331, Rabinovic (Teva) Dep. 43:17-44:12 (“Q.
Including these provisions in the patent settlement is in Teva’s independent self-interest.
Correct? ... A. I mean, from a business perspective, I would ... want to have these
provisions in a settlement agreement because we’re settling the case. There were other
filers, and so we’d want to make sure that we were getting as good a deal as anybody else
was. So my business is going to have a really hard time accepting an agreement where
I’m not allowed to go to market even though somebody else got that right to go to the
market.”); Ex. 327, Gupta (Amneal) Dep. 118:17-119:7 (“Q. You do understand Section
4.3 as well as 4.4. and 4.5 to be MFN clauses or acceleration clauses? A. Yes, I do
understand acceleration clauses. Q. And that means if any other generic is able to launch,
the entry date for Amneal accelerates to that date, right? A. That’s correct. Q. Including a
provision like this in the settlement agreement is in Amneal’s independent best interest; is
it not? A. Yes. Q. Because it assures that Amneal has the earlies entry possible, correct?
A. That’s correct.”); Ex. 330, Nadkarni (Sun) Dep. 127:23-128:7; Ex. 351, Venkatesan
(Wockhardt) Dep. 168:22-169:3 (“Q. Any other reasons why the launch date was
important to Wockhardt; did they want to assure they would launch at the earliest date
possible? ... A. Yes.”).
Response: Denied. Each generic wanted to be able to launch its product as soon as
possible. See Response to ¶ 353. Forest attempted to eliminate the motivation, particularly of the
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last four generic first-filers to settle, to negotiate an earlier launch date or attempt to launch
sooner by agreeing to an option allowing the generics to adopt the terms of the settlement
agreement of the last generic to settle (O’Shaughnessy Decl. Ex. 30 (Lupin) at 364;
O’Shaughnessy Decl. Ex. 32 (Orchid) at 403), compensating the generics for litigation costs in
excess of their actual sunk costs (See Response to ¶¶ 81 and 176), entering into lucrative side
agreements (O’Shaughnessy Decl. Ex. 62 (Ceftaroline Binding Term Sheet) and O’Shaughnessy
Decl. Ex. 126 (Lexapro Amendment), and creating a situation where the early entry acceleration
clauses in the agreements with all other first-filing generics would result in “immediate
genericization” of the market and eliminate any financial motivation to continue to challenge the
patent or seek an earlier agreed launch date. Litvin Decl. Ex. 176, (Ryan Ex. 50) FRX-AT-
03882414-420.
Forest’s Objection: Forest fully incorporates its objections to DPPs’ responses to ¶¶ 81,
176, 353, and 354. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. DPPs have, as admitted in
their Memorandum in Opposition to Defendants’ Motion for Summary Judgment, abandoned
their inter-generic conspiracy claim. Accordingly, the fact should be deemed admitted. SESAC,
1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
F. The Generic Entry Early Acceleration Clauses Ensured Substantial Generic
Entry
356. The Generic Entry Early Acceleration Clause ensured competition amongst the
first filing Generics Manufacturers should any generic have negotiated an earlier settlement entry
date.
Plaintiffs’ Admissions: Ex. 335, Elhauge (Sep. 29) Dep. 91:14-21 (noting that the
contingent entry clauses would have accelerated entry for all generic manufacturers); Ex.
121, Elhauge Rep. I ¶¶ 8-9 (“Because of the contingent entry clauses, if Mylan continued
to litigate the patent and won, it could cause many generics to enter the Namenda market,
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eliminating the vast majority of Forest’s brand profits for Namenda.”); Ex. 193, Lamb
Rep. I ¶ 129 (basing his damages claim on the fact that several generic manufacturers
would have been able to launch with Mylan, which is a result of the most favored nation
provision).
Defendants’ Evidence: Ex. 54, Fowdur Rep. ¶ 76.
Response: Admitted in part, denied in part. The contingent launch provisions did not
“ensure competition” but rather ensured a lack of competition. Forest knew that first-filers would
not have settled without assurances that no other generic were permitted to launch earlier than
they could to preserve their shared first-filer exclusivity. See Litvin Decl. Ex. 319, Ryan Dep. At
203:4-10; Litvin Decl. Ex. 252, Agovino Dep. at 45:1-18; 160:24-161:6; Litvin Decl. Ex. 339,
Rabinovic (Teva) Dep. at 50:18-23. Moreover, Prof. Elhauge opines that the contingent launch
provisions provided Mylan with leverage to demand a large reverse payment from Forest,
because if Mylan, the last to settle, continued to litigate against Forest and won, it would trigger
the entry of the other generic settlers and “eliminate the vast majority of Forest’s brand profits
for Namenda.” O’Shaughnessy Decl. Ex. 121, Elhauge Report ¶ 9. Thus, the contingent entry
provisions were anticompetitive. Admitted to the extent the contingent launch provision
permitted a settling first filing Generic Manufacturer to enter the market at the same time as a
later settling generic that negotiated an earlier entry date.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. DPPs have expressly
averred that “Plaintiffs are not pursuing their inter-generic conspiracy claim (Count 4 of
Plaintiffs’ First Amended Class Action Complaint, ECF No. 26).” Opp. at 1 n.1. As explained
in Section I of Defendants’ Reply Memorandum in Support of Their Motion for Summary
Judgment, DPPs also have functionally abandoned many of their claims, including their claim
that the patent litigation settlements with non-Mylan generics were anticompetitive, and DPPs’
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response appears to be intended to support this abandoned claim. DPPs’ response thus consists
of improper argument and advances a claim that they have abandoned. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
357. If triggered, the Generic Entry Early Acceleration Clauses would result in
procompetitive effects.
Plaintiffs’ Admissions: Ex. 121, Elhauge Rep. I ¶ 8; Ex. 335, Elhauge (Sep. 29) Dep,
91:14-21, Ex. 368 337:4-11 (agreeing that it is not his position that “when it comes to the
first-filers other than Mylan” the Generic Entry Early Acceleration Clause was not a
reverse payment); Ex. 193, Lamb Rep. I ¶ 129 (basing his damages claim on the fact that
several generic manufacturers would have been able to launch with Mylan, which is a
result of the most favored nation provision).
Defendants’ Evidence: Ex. 54, Fowdur Rep. ¶¶ 76-77.
Response: This assertion is a legal conclusion and thus does not require a response.
To the extent a response is required, the assertion is denied. Defendants cite no evidence that
supports their contention. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002)
(Rule 56 “places the initial burden on the moving party to identify ‘those portions of the
‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material
fact.’”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Neither Prof. Elhauge nor
Dr. Lamb conclude that the contingent entry provisions are pro-competitive. Instead, Prof.
Elhauge opines that the contingent launch provisions provided Mylan with leverage to demand a
large reverse payment from Forest, because if Mylan, the last to settle, continued to litigate
against Forest and won, it would trigger the entry of the other generic settlers and “eliminate the
vast majority of Forest’s brand profits for Namenda.” O’Shaughnessy Decl. Ex. 121, Elhauge
Report ¶ 9. Thus, the contingent entry provisions were anticompetitive.
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Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. DPPs have expressly
averred that “Plaintiffs are not pursuing their inter-generic conspiracy claim (Count 4 of
Plaintiffs’ First Amended Class Action Complaint, ECF No. 26).” Opp. at 1 n.1. As explained
in Section I of Defendants’ Reply Memorandum in Support of Their Motion for Summary
Judgment, DPPs also have functionally abandoned many of their claims, including their claim
that the patent litigation settlements with non-Mylan generics were anticompetitive, and DPPs’
response appears to be intended to support this abandoned claim. DPPs’ response thus consists
of improper argument and advances a claim that they have abandoned. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
HARD SWITCH: NO ANTITRUST INJURYV.
A. The June 2013 Launch of Namenda XR
358. Forest launched Namenda XR on June 13, 2013.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 52.
Defendants’ Evidence: Ex. 14, FRX-AT-01909674.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One at ¶ 14.
Response: Admitted in part, denied in part. See Response to ¶ 52.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Forest, also, hereby incorporates its objections to DPPs’ response
to ¶ 52. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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359. Forest invested approximately $175 million in developing Namenda XR, the
“improved version of Namenda,” in a once-daily extended release formulation to conform to
prescribers’ preferences for once-a-day treatments for Alzheimer’s patients.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 45-46.
Defendants’ Evidence: Ex. 11, Meury (NYAG) Decl. at ¶¶ 6, 8.
Response: This statement is irrelevant and no response is required. By way of further
response, it is admitted in part and denied in part. It is admitted that Forest claims it spent $175
million on efforts to market a once-daily release formulation and thereby preserve sales and
extend its monopoly concerning memantine hydrochloride. It is denied that the cited evidence
demonstrates that all of the claimed $175 million was actually spent on development costs. It is
further denied that Namenda XR is an “improved version of Namenda” or that Namenda XR
“conform[ed] to prescribers’ preferences for once-a-day treatments for Alzheimer’s patients.” To
the contrary, the record evidence shows many prescribers did not prefer Forest’s once-a-day
Alzheimer’s treatment, Namenda XR. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 26 &
n.31 & nn 54-56. Comments in Forest’s surveys of physicians reflect significant concerns about
moving patients from Namenda IR to Namenda XR. See Litvin Decl. Ex. 88, FRX-AT-01774324
(NYAG PX548 - Copy of Doctor Survey Analysis) at column CC, rows 37, 48, 57, 109, 141,
disadvantages of XR: “having to change to a new med”, “may skip too many days if partially
non-compliant”, “once dose is missed it is missed”, “missed doses more significant”, “confusion
when changing to it”; column CF, rows 16, 19, 27, 43, 59, 134, 145, 154 providing reasons for
likelihood of giving Namenda XR to new patients as opposed to switching current patients from
IR to XR: “once patient stable on[] bid, no reason to switch unless poor compliance”, “too hard
to change”, “some patients are adjusted to taking their treatment BID and it may be difficult to
change habits”, “Patients who are stable on bid dosing have no cause to switch to XR”, “concern
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about completely new medicine in a dementia patient”, “BID dosing does not in itself present
that much more of a burden than daily dosing”, “will not likely change bid patients unless there
is an issue”, “conversion to once daily from BID may be a source of confusion or treatment
destabilization”; column EJ, rows 37, 38, 42, 50, 62, 126 explaining why they would keep a
patient on BID dosing if Q.D. dosing is available: “they are resistant to change”, “why rock the
boat if stable on that custom dose”, “don’t want to rock the boat and change what is working”,
“disruption of routine adversely [a]ffects patient”, “patient and caregiver preference”, “if stable
would not want to transition”; column GD, row 23, explaining their reaction to scenario where
there are pharmacy call backs related to switching patient from IR to XR Namenda: “1. why in
the world is this happening 2. this makes no sense 3. this will disrupt my ability to care for
patients 4. this must be a greed/or power situation on someone’s part.”).
Based on having marketed Namenda for almost a decade, Forest was very familiar with
its patient population, and knew that Alzheimer’s patients are a particularly fragile patient
population. See, e.g., Litvin Decl. Ex. 183, FRX-AT-04120185 (powerpoint presentation
describing Alzheimer’s patients); New York v. Actavis, PLC, No. 14 Civ. 7473, 2014 U.S. Dist.
LEXIS 172918, at *52-53 (S.D.N.Y. Dec. 11, 2014); Litvin Decl. Ex. 78, FRX-AT-01747928 at
941 (April 2014 Earnings call: Alzheimer’s patients are a “fragile population of patients”);
Litvin Decl. Ex. 70, FRX-AT-01726785-792 at 788 (Sept. 8, 2014 Declaration of James Lah,
M.D., Ph.D at ¶ 24): “For Alzheimer’s patients, stability is key: this is a very vulnerable group
of patients Any small change in medication raises the risk of adverse effect. As Namenda is
typically prescribed in the mid to later phases of Alzheimer’s disease, the patients taking
Namenda are at a stage in the disease when they are especially vulnerable.”); Litvin Decl. Ex.
167, FRX-AT-03800258-76 at 58 (Nov. 8, 2013 email from Julie Zaidler to William Kane re
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“Namenda LTC Rep Research, Sept. 2013,” attaching “Namenda LTC Reps Panels Summary,”
at ’58: “MDs hesitate to change regimen in elderly fragile patients,” at ’73: “some MDs do not
want to ‘rock the boat’ by switching elderly patients to XR”). Given the potential risks, without
studies that show that a new medication has meaningful benefits over a patient’s current
medication, physicians frequently will not switch an Alzheimer’s patient from a medicine on
which the patient is doing well. Actavis, 2014 U.S. Dist. LEXIS 172918, at *53; Litvin Decl. Ex.
70, FRX-AT-01726785-792 at 788 (Sept. 8, 2014 Decl. of James Lah, M.D., Ph.D. at ¶25).
There would have to be a “good foundation” for such a switch. Litvin Decl. Ex. 84, FRX-AT-
01750895-1082 at ‘0952 (Hearing Transcript, The People of the State of New York v. Forest
Laboratories, LLC, 14-cv-7473) (Nov. 10, 2014) at 58:5-15). Given the multiple medications
that often elderly, mid-to-late Alzheimer’s patients take, the fact that Namenda XR changes a
twice a day regimen to a once a day regimen is of only marginal benefit to such a patient. Litvin
Decl. Ex. 70, FRX-AT-01726785-792 at 88, Declaration of James Lah, M.D., Ph.D., Sept. 8,
2014 (“absent a patient request, I would not switch an Alzheimer’s patient who is doing well on
a drug that is taken twice daily to an extended release form of the same drug, unless there is a
medical reason for doing so”); id. at 790 (“As explained above, switching Alzheimer’s patients
from one drug to another without any medical reason for doing so is inconsistent with my best
professional judgment in the treatment of Alzheimer’s patients.”). Particularly in long-term care
settings, where medication is routinely dispensed by caregivers multiple times a day, the benefit
of reducing Namenda to once-daily XR is minimal. As Forest learned from Pharmerica, a
provider of Long-Term Care pharmacy services, it was “not of the view that a once-daily is cost
effective for their business model and see no impact to touching patients once versus twice a day
but do see cost effectiveness in a generic versus branded product.” Litvin Decl. Ex. 108, FRX-
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AT-01808336 (March 18, 2014 email string involving Frank Murdolo, William Meury and Mark
Devlin). Forest executive Mark Devlin agreed noting, “the point about dosing frequency not
mattering is probably accurate ... they dispense meds multiple times a day to institutionalized
patients anyway, so QD vs BID isn’t a real factor.” Id. See also Litvin Decl. Ex. 172, FRX-AT-
03861621-58 at 28 (September 12, 2012 “Namenda XR Roadmap to Launch,” “Initial
positioning research told us differentiating on convenience wouldn’t be enough to drive
successful conversions”) (emphasis in original).
Hence, as Judge Sweet found, “Defendants’ surveys show that many physicians,
caregivers, and pharmacists are concerned about potential harm to patients from the forced
switch.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. at ¶ 157. See also id. ¶ 159
(“reasons provided by such caregivers [for preferring IR versus XR] include “patient used to it,”
“keep things the same for now,” “he likes having his schedule stay the same,” “doing well [with]
it, no reason [to] change” and “I prefer not to change up her medication at this point.”); id. ¶ 151
“(Physicians are reluctant to disrupt patients’ medical routines without a medical reason to do
so.”); id. ¶ 155 (“Physicians can also be reluctant to switch medications because the patients and
others, such as their caretakers, must be educated on how the new medication is taken.”).
Forest’s Objection: DPPs’ purported evidence does not dispute the above fact.
Specifically, O’Shaughnessy Decl. I Ex. 11 states that Forest “invest[ed] approximately $175
million in research and development for Namenda XR®.” O’Shaughnessy Decl. I Ex. 11,
Meury (NYAG) Decl. at ¶ 8 (emphasis added); see also O’Shaughnessy Decl. I Ex. 6,
Unredacted Sweet Op. at ¶ 45. Additionally, the description of Namenda XR as “an improved
version of Namenda” is a direct quote from Judge Sweet’s opinion. O’Shaughnessy Decl. I Ex.
6, Unredacted Sweet Op. at ¶ 45. DPPs’ lengthy discussion about patient vulnerability and the
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effects of a “forced switch,” presume that Forest’s plan to withdraw Namenda IR was
consummated. Instead, because of the injunction, Forest never removed Namenda IR from the
market or limited its distribution in any way. O’Shaughnessy Decl. I Ex. 288, FRX-AT-
01747641, Dec. 2014 Injunction; O’Shaughnessy Decl. I Ex. 291, Settlement Agreement,
(“Whereas, the Injunction prevented Allergan from removing Namenda IR from the market, or
limiting the distribution of Namenda IR, and during the Injunction term and afterwards Allergan
has continued to manufacture and supply Namenda IR, thus permitting patient access at all times
to Namenda IR in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, and Guam[.]”). Thus, doctor and patient choice was preserved at all times.
Id. Furthermore, most of DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” or recites different purported facts, but does not challenge any aspect
of the statement itself, which is an improper use of a Rule 56.1 submission. See SESAC, 1 F.
Supp. 3d at 186 n.3; Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, since
the fact is not in dispute, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
360. Once-a-day versions for all other FDA approved products for the treatment of
Alzheimer’s Disease had previously released by June 2013.
Defendants’ Evidence: Ex. 321, Ferris Dep., FRX-AT-01732986 at 107:16-109:9; Ex.
323, Reisberg (NYAG) Dep. at 165:23-166:8.
Response: This statement is irrelevant and no response is required. By way of further
response, it is denied. Defendants’ citations suggest only that cholinesterase inhibitors have been
released in once-daily formulations. See, e.g., O’Shaughnessy Decl. Ex. 321, Ferris Dep., FRX-
AT-01732986 at 107:24. Furthermore, a number of generic companies have introduced a twice-
daily FDA-approved products for the treatment of Alzheimer’s Disease. See Responses to ¶¶
438-57.
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Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Additionally, that “a number of generic companies have
introduced a twice-daily FDA-approved product[] for the treatment of Alzheimer’s Disease” is
immaterial because those drugs (generic versions of Namenda IR) were not introduced in the
market prior to June 2013. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
361. Alzheimer’s caregivers “viewed Namenda XR as a ‘meaningful and welcome
improvement’ over the twice-a-day Namenda IR tablets” in surveys taken during the time period
surrounding launch.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 50.
Defendants’ Evidence: Ex. 196, FRX-AT-01769199.
Response: Denied. Judge Sweet found that “several factors are likely to inhibit
switching from Namenda XR to generic memantine once it becomes available on the market,
including that “[p]hysicians and caregivers are reluctant to disrupt patients’ medical routines
without a medical reason to do so.” O’Shaughnessy Decl. Ex. Unredacted Sweet Op. ¶143. See
also id. ¶ 157 (“Defendants’ surveys show that many physicians, caregivers, and pharmacists are
concerned about potential harm to patients from the forced switch.”); id. ¶ 159 (“Even using
Defendants[’] own surveys and methodology, 21% of the caregivers surveyed by the Defendants
did not find discontinuation of Namenda IR to be acceptable. The reasons provided by such
caregivers include ‘patient used to it,’ ‘keep things the same for now.’ ‘he likes having his
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schedule stay the same,’ ‘doing well [with] it, no reason [to] change,’ and ‘I prefer not to change
up her medication at this point.’”) (citing FRX-AT-01784202-220 (PX 304), at 2, 3, 9, 10, 15);
id. ¶ 160 (“Defendants’ documents reflect their expectation that ‘[p]rescribers, patients,
caregivers may be confused or dissatisfied with either withdrawal or limited distribution scenario
and may choose to discontinue Namenda treatment. Consequently, Forest projected that
somewhere between 7-20% of all Namenda patients would not switch to Namenda XR and
instead would cease memantine treatment entirely.”).
Defendants’ own surveys also reflect dissatisfaction among caregivers with switching to
Namenda XR. See Litvin Decl. Ex. 22, FRX-AT-01600903 (Caregiver Survey: Caregivers cited
“Potential Disadvantages of Namenda XR,” including “Side effects – 14%” and “Concerns about
higher dose – 12%.” Id. at 3 With respect to “Acceptability of ‘Limited Distribution’ Scenario
for Caregivers and Alzheimer’s Patients,” only 14% of caregivers surveyed “[p]refer once daily
dosing. Id. at 4. With respect to “Acceptability of ‘No Longer Available’ Scenario for Caregivers
and Alzheimer’s Patients,” only 20% of caregivers surveyed “[p]refer once daily dosing.” Id. at
5. Furthermore, when asked “Reasons for Product Preference – XR versus BID – Assuming Out-
of-Pocket Costs were Comparable,” 21% [32 of the 150] of caregivers selected “Twice-daily
Namenda” because “BID has been effective” (28%), “[p]refer not to change” (13%); “[u]sed to
twice daily dosing” (13%), “[p]atient/caregiver preference” (6%). Id. at 10. When asked their
“Initial Reaction to ‘No Longer Available’ Scenario,” 34% (51) of the 150 surveyed caregivers
said they “[w]ill switch to Namenda XR,” but 20 of those 51 said that was because they had “No
choice/forced to transition.” Id. at 14).
“Key considerations” for converting IR to XR, include both “[m]inimizing patient
disruption throughout the process” because “[p]rescribers, patients, caregivers may be confused
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or dissatisfied with either withdrawal or limited distribution scenario and may choose to
discontinue Namenda treatment” as well as “[p]otential negative reaction by key stakeholders
and customers” because “Alzheimers’s patients viewed as highly vulnerable.” Litvin Decl. Ex.
190, FRX-AT-04254209-228 at 214 (June 26, 2013 email from C. Myers to W. Meury with
attached powerpoint presentation, Namenda IR to XR Conversion Project, Working Draft June
2013). See also Litvin Decl. Ex. 108, FRX-AT-01808336 (March 18, 2014 email from Devlin to
Meury re Namenda XR and Pharmerica: “[T]he point about dosing frequency not mattering is
probably accurate...they [Long Term Care] dispense meds multiple times a day to
institutionalized patients anyway, so QD vs BID isn’t a real factor.”).
Forest’s Objection: DPPs’ evidence does not dispute the above fact. The survey cited
by Judge Sweet shows that, “[i]n the 2013 survey, caregivers reported that they viewed Namenda
XR as a ‘meaningful and welcome improvement’ over the twice-a-day Namenda IR tablets.”
O’Shaughnessy Decl. I Ex. 6, Unredacted Sweet Op. at ¶ 50. Nor does any of the evidence cited
by DPPs dispute that more than half of caregivers surveyed were “more satisfied” with
Namenda XR when compared to Namenda IR.” See O’Shaughnessy Decl. I Ex. 196, FRX-AT-
01769199, at 9211. As such, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Moreover, the
preference of some patients to remain on Namenda IR does not dispute the fact because Forest
never interfered with patient choice. See Response to DRSUF ¶ 359. DPPs’ discussion about
patient vulnerability and the “withdrawal” scenario are only material if Forest’s plan to withdraw
Namenda IR was consummated. Instead, because of the injunction, Forest never removed
Namenda IR from the market or limited its distribution in any way. O’Shaughnessy Decl. I Ex.
288, FRX-AT-01747641, Dec. 2014 Injunction; O’Shaughnessy Decl. I Ex. 291, Settlement
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Agreement (“Whereas, the Injunction prevented Allergan from removing Namenda IR from the
market, or limiting the distribution of Namenda IR, and during the Injunction term and
afterwards Allergan has continued to manufacture and supply Namenda IR, thus permitting
patient access at all times to Namenda IR in all 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, and Guam[.]”). Thus, doctor and patient
choice was preserved at all times. Accordingly, the fact should be deemed admitted. SESAC, 1
F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
362. “A manufacturer may aggressively promote and market the new drug or reduce its
price to encourage voluntary switching. This has been termed a ‘soft switch.’”
Undisputed Record Evidence: In re Namenda Antitrust Litig., Mem. And Order Den.
Def.’s Mot. to Dismiss, No. 15-07488, Dkt. No. 106, at *8 (S.D.N.Y. Sept. 13, 2016).
Plaintiffs’ Admissions: Ex. 357, Doud (Rochester Drug Co.) Dep. 17:22-18:8 (“What
we’re contending is that Forest backed off the promotion of IR in order to further push
the XR on Alzheimer’s patients.”).
Response: Defendants cite no evidence that supports their contention and it is
therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Defendants’ citation to the opinion denying
defendants’ motion to dismiss is not record evidence to which a response is required, as the
Court could not make any factual findings in proceedings pursuant to Rule 12(b)(6). See Global
Network Communs., Inc. v. City of New York, 458 F.3d 150, 155, 156 (2d Cir. 2006) (on motion
to dismiss, district court may not rely on material outside the pleadings to engage in fact-finding
against the plaintiff). Nor does the quote from Larry Doud of Rochester Drug Co-Operative, Inc.
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(“RDC”) support Defendants’ contention. His statement merely recites Plaintiffs’ contention that
Forest chose to rely on “push[ing]” Namenda XR on the market – through a hard switch – rather
than “promot[ing]” it through normal means. Furthermore, to the extent that Defendants are
implying that “soft switch” tactics account for the share of memantine hydrochloride sales they
garnered for Namenda XR, Dr. Ernst Berndt observed that Defendants’ own forecasts had
already embedded within them the expected effects of Forest’s “soft switch” efforts as well as
the expected additional shares Forest would achieve with the hard switch, and therefore there is
no need for Plaintiffs to control for supposed soft-switch strategies which Forest may have
engaged in after notifying the market that it would withdraw Namenda IR. See O’Shaughnessy
Decl. Ex. 55, Berndt Reply Report ¶¶ 15-20. See also Response to ¶ 462.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. The above fact also appears in Judge Sweet’s preliminary
injunction decision as well as the declaration Dr. Berndt submitted in the NYAG Action. See
O’Shaughnessy Decl. I Ex. 6, Unredacted Sweet Op., at ¶ 36; O’Shaughnessy Decl. I Ex. 189,
FRX-AT-01775574 at 5598, ¶ 41. Additionally, DPPs’ recharacterization of Mr. Doud’s
testimony ignores that Mr. Doud was discussing Forest’s “promotion of [Namenda] IR,” a soft-
switch tactic, not any purported “hard switch” effort. O’Shaughnessy Decl I. Ex. 357, Doud
(Rochester Drug Co.) Dep. 17:22-18:8. Accordingly, because the fact is not disputed, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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363. As part of the Namenda XR launch, Forest aggressively promoted and marketed
Namenda XR, spending “$120 million educating patients, caregivers, health care providers, and
pharmacists about Namenda XR, including Namenda XR’s benefits and FDA-approved
instructions for transitioning from Namenda IR to Namenda XR.”
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 53.
Defendants’ Evidence: Ex. 197, FRX-AT-01765922 at 5942-5944; Ex. 196, FRX-AT-
01769199; Ex. 198, FRX-AT-01779957 (Huasman [sic] (NYAG) Decl.) ¶ 22; Ex. 199,
FRX-AT-01764620 at 4625.
Plaintiffs’ Admissions: Ex. 357, Doud (Rochester Drug Co.) Dep. 169:18-22 (“Q: And,
in your experience, when brand pharmaceutical companies focus on promoting one drug
versus another, sales of the drug that they’re focused on promoting tend to increase,
correct? A: Absolutely.”).
Response: Admitted in part and denied in part. It is admitted that Forest spent money
marketing Namenda XR. It is denied that Namenda XR has benefits above those already
provided by Namenda IR, as a number of physicians and caregivers doubt the supposed benefit
of Namenda XR and a forced switch to that product, and Defendants’ own expert, Dr. Jerry
Hausman, confirms that, “based on actual decisions made in the market, approximately 50% of
physicians prefer Namenda IR.” See O’Shaughnessy Decl. Ex. 6, Unredacted Judge Sweet Op.
¶¶ 157-59. See Response to ¶¶ 359, 361 (collecting evidence concerning surveys demonstrating
physicians and caregivers that did not prefer Namenda XR). It is further denied that Forest’s
“soft switch” promotional and marketing efforts were responsible for the amount of Namenda
XR sales Forest was able to achieve via the “hard switch” strategy. See Response to ¶ 362. It is
further denied that Mr. Doud’s testimony, cited by Defendants, establishes that it was Forest’s
promotion and marketing of Namenda XR’s supposed benefits that led to increased sales, as Mr.
Doud’s testimony cited for this point was not targeted to that issue.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). In particular, DPPs’ discussion of a “forced switch,” is
completely nonresponsive. Because of the injunction, Forest never removed Namenda IR from
the market or limited its distribution in any way. O’Shaughnessy Decl. I Ex. 288, FRX-AT-
01747641, December 2014 Injunction; O’Shaughnessy Decl. I Ex. 291, Settlement Agreement,
(“Whereas, the Injunction prevented Allergan from removing Namenda IR from the market, or
limiting the distribution of Namenda IR, and during the Injunction term and afterwards Allergan
has continued to manufacture and supply Namenda IR, thus permitting patient access at all times
to Namenda IR in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, and Guam[.]”). Thus, doctor and patient choice was preserved at all times.
Id. Furthermore, DPPs’ response merely attempts to “contextualize or dispute the relevance of
the statement,” but does not challenge any aspect of the statement itself, which is an improper
use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
364. Part of this aggressive promotional effort was the deployment of “1500
experienced sales reps, as well as an informative campaign including journal advertising, direct
mail, and physician promotional.”
Plaintiffs’ Admissions: Ex. 358, Benton (Smith Drug Co.) Dep. 257:7-261:5 (discussing
Ex. 200, Benton Ex. 21).
Response: Admitted in part and denied in part. Plaintiffs admit that Forest stated that
it planned to promote Namenda XR. O’Shaughnessy Decl. Ex. 358, Benton (Smith Drug Co.)
Dep. 259:8-20 (discussing Ex. 200, Benton Ex. 21). Defendants fail to cite to record evidence
that they in fact did so, and therefore the remaining contentions in this paragraph are denied. See
Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56 “places the initial
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burden on the moving party to identify ‘those portions of the ‘pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, which it believes
demonstrate the absence of a genuine issue of material fact.’”) (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). It is further denied that Forest’s soft switch promotional and
marketing efforts were responsible for the amount of Namenda XR sales Forest was able to
achieve via the “hard switch” strategy. See Response to ¶ 362. Moreover, as Dr. Berndt found,
aggressive promotional efforts through sales representatives and a marketing campaign were
already factored into Forest’s soft switch forecasts. O’Shaughnessy Decl. Ex. 55, Berndt Reply
Report at ¶¶ 16-20.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Additionally,
O’Shaughnessy Decl. II Ex. 388 shows that Forest did in fact utilize 1500 account
representatives to promote Namenda XR. O’Shaughnessy Decl. Ex. II 388, FRX-AT-01606562
at 6612. Accordingly, since DPPs have no evidence to dispute the above fact, the fact should be
deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
365. Part of this aggressive promotional effort was the inclusion of advertising in the
wholesalers’ circulars to pharmacists, for which wholesalers were compensated.
Plaintiffs’ Admissions: Ex. 358, Benton (Smith Drug Co.) Dep. 257:7-261:5
(discussing Ex. 200, Benton Ex. 21) (“Q. Did Smith Drug select the
advertisements that it would include in The DrugSmith? A. Again, I don’t do that,
but I would think we select what goes in our DrugSmith program. Q. And Smith
Drug wouldn’t market or advertise a drug that it didn’t think was beneficial to
patients or its customers, right? ... A. I would think we wouldn’t do it unless we
were compensated for it.”).
Response: Admitted in part and denied in part. Plaintiffs admit that Forest paid Smith
Drug to run an advertisement for Namenda XR in one of its circulars. Defendants fail to cite to
record evidence as to the remaining contentions in this paragraph and they are therefore denied.
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See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56 “places the initial
burden on the moving party to identify ‘those portions of the ‘pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, which it believes
demonstrate the absence of a genuine issue of material fact.’”) (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). Moreover, as Dr. Berndt found, aggressive promotional efforts were
already factored into Forest’s soft switch forecasts. O’Shaughnessy Decl. Ex. 55, Berndt Reply
Report at ¶¶ 16-20.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. DPPs’ response
admits the single fact stated. Accordingly, the fact should be deemed admitted. SESAC, 1 F.
Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
366. Part of this aggressive promotional effort was a change in how Forest
compensated its sales force members; in December 2013, Forest reduced employee incentives to
promote Namenda IR, expanded the size of the Namenda XR sales force, and increased the
member compensation for Namenda XR conversions.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op.at ¶ 94.
Defendants’ Evidence: Ex. 359, Devlin Dep. 173:24-178:4; Ex. 201, FRX-AT-
01775242.
Response: Admitted in part and denied in part. Forest had long planned to revise its
incentive structure for its sales force upon the launch of Namenda XR.
For instance, in a June 10, 2013 speech pre-dating the launch of Namenda XR, Forest
sales representative were told that Forest had “an innovative compensation plan and launch
contest. We just need to flick the switch.” O’Shaughnessy Decl. Ex. 250, FRX-AT-01630867-89
at 69. As Dr. Ernst Berndt noted, “changing approaches to compensation concerning Namenda
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XR had been contemplated well before December 2013, and therefore would be assumed to have
been already embedded in the forecasts for the soft switch scenarios in 2013.” O’Shaughnessy
Decl. Ex. 55, Berndt Reply Report ¶ 17 & n.34. There is also conflicting evidence about the
timing of Forest’s implementation of the increase in employee incentives to promote Namenda
XR. While Defendants point to a single document and testimony from their own executive,
Judge Sweet concluded that the change occurred far earlier: “Shortly before Namenda XR was
launched, Forest stopped paying sales reps for promoting Namenda IR, and offered bonuses for
successful conversions to Namenda XR.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. ¶
94.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Dr. Berndt’s assumption, for example, is not competent
evidence. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 85 (2d Cir. 2005) (“The law is well
established that conclusory statements, conjecture, or speculation are inadequate to defeat a
motion for summary judgment.”) (internal quotation marks omitted); Raskin v. Wyatt Co., 125
F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report is not a talisman against summary judgment.”);
Virgin Atl. Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999)
(holding that “expert testimony without a factual foundation cannot defeat a motion for summary
judgment”), aff’d 257 F.3d 256 (2d Cir. 2001). And while Judge Sweet’s unredacted opinion
refers to activity occurring before the launch of Namenda XR, his opinion cites a single
document in the referenced paragraph, and this document does not contain the quote included in
the parenthetical in Judge Sweet’s opinion (or state anything else about sales representatives
losing compensation for selling Namenda IR). O’Shaughnessy Decl. I Ex. 6, Unredacted Sweet
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Op. ¶ 94. DPPs thus have failed to show that they can introduce admissible evidence to dispute
this fact, and their response is merely an attempt to “contextualize or dispute the relevance of the
statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist.
LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
B. Favorable Formulary Placement for Namenda XR
367. More than 80% of prescription drug expenditures in the United States are paid for
by third-party payors (primarily health plans), which “pay all or part of the costs of a prescription
drug on behalf of patients.”
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 16-21, 95.
Defendants’ Evidence: Ex. 15, Kolassa (Oct. 21, 2014) Decl. ¶ 31; Ex. 202, FRX-AT-
01777507 at 7509.
Publicly Available Sources: GAO, No. 13-176, Prescription Drugs: The
Number, Role, and Ownership of Pharmacy Services Administrative
Organizations, at 9 (Jan. 2013) http://www.gao.gov/assets/660/651631.pdf
(“Third-party payers accounted for almost 80 percent of drug expenditures in
2010, which represents a significant shift from 30 years ago when payment from
individual consumers accounted for the largest portion of expenditures.”).
Response: Admitted.
368. To manage their costs, health plans “shift” demand to the drugs that they prefer
consumers purchase by “generat[ing] a drug formulary, a list of approved drugs that will be paid
for by the health plan (in whole or in part) when an insured patient fills a prescription.”
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 16-21, 95; Ex. 360,
Lahman (Optum) Dep. 47:7-48:20 (discussing how a third-party payor can “use its
formularies in order to shift market share from one drug to another within a given class”).
Plaintiffs’ Admissions: Ex. 357, Doud (Rochester Drug Co.) Dep. 141:21-142:8; Ex.
358, Benton (Smith Drug Co.) Dep. 242:9-14; 243:3-9; Ex. 349, Berndt Dep. 187:8-
190:14 (discussing the role of drug formularies and the process of tiering).
Response: Denied. The cited documents do not support the assertion as stated. Koch
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v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56 “places the initial burden on
the moving party to identify ‘those portions of the ‘pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, which it believes
demonstrate the absence of a genuine issue of material fact.’”) (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986)). By way of further response, Health plans do not “shift demand.”
Rather, as Judge Sweet found, third party payors employ formularies, co-payments and step
therapy in order to “manage costs.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. at ¶¶ 16-
21, 95.
Forest’s Objection: The evidence cited by Forest supports the undisputed fact.
Specifically, Optum’s corporate representative testified that Optum uses formulary placement,
specifically formulary “exclusions,” “step edits,” and “copay differentials,” to drive a “shift [in]
market share from one drug to another . . . .” O’Shaughnessy Decl. I Ex. 360, Lahman (Optum)
Dep. 47:7-48:20. Additionally, Lawrence Doud, Rochester Drug Company’s corporate
representative, agreed that “insurance companies [are] successful at shifting demand” and that
“pharmacy benefits managers [are also] successful at shifting demand to the drugs that they
prefer[.]” O’Shaughnessy Decl. I Ex. 357, Doud (Rochester Drug Co.) Dep. 141:21-142:8.
Similarly, Jim Benton, Smith Drug Company’s corporate representative agreed that pharmacy
benefit managers “work to shift demand from one drug to another” and that “[c]overage under an
insurance policy of a certain drug is an important consideration for the consumer.”
O’Shaughnessy Decl. I Ex. 358, Benton (Smith Drug Co.) Dep. 242:9-14; 243:3-9; see also
O’Shaughnessy Decl. II Ex. 377, Berndt Dep. 187:8-190:14 (discussing the role of drug
formularies and the process of tiering). Indeed, Judge Sweet also found that health plans utilize
“several strategies,” including generating “a drug formulary,” in order “to influence the drugs
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doctors prescribe and patients take.” O’Shaughnessy Decl. I Ex. 6, Unredacted Sweet Op. at ¶¶
16-21, 95. DPPs’ response that health plans use formulries to “manage costs” is not inconsistent
with the stated fact because managing the costs of drugs to patients affects demand.
Accordingly, since there is no factual dispute, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
369. Health plans often pair the drug formulary with a system of co-payments
(“co-pays”), which steer physicians and patients towards either generic drugs (which are usually
on “Tier 1” of a formulary) or “preferred brand” drugs (which are usually on “Tier 2” of a
formulary) by offering lower out-of-pocket prices.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 16-21, 95; Ex. 360,
Lahman (Optum) Dep. 47:7-50:14 (discussing the use of copay differentials and tiering to
“drive patient to use the tier 1 drugs, rather than the higher tier drugs”).
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 187:8-190:14.
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). As Judge Sweet found, third party payors
employ formularies, co-payments and step therapy in order to “manage costs.” O’Shaughnessy
Decl. Ex. 6, Unredacted Sweet Op. at ¶¶ 16-21, 95.
Forest’s Objection: The evidence cited by Forest supports the undisputed fact above. In
analyzing the ability of health plans to steer physicians and patients to a particular drug, Judge
Sweet noted that “[t]hird party payors may also require patients to pay a portion of the costs of a
drug as a ‘co-payment’” which is “often accomplished through a tiered co-pay system imposed
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in conjunction with the formulary file.” O’Shaughnessy Decl. I Ex. 6, Unredacted Sweet Op. at
¶¶ 16-21. Judge Sweet went on to say that “third party payors use formularies to influence the
drugs doctors prescribe and patients take” and that “[t]he lower co-pay associated with ‘preferred
brand’ status lowers the price to patients and can be crucial to a new drug’s success because
better formulary positioning results in substantially higher demand.” O’Shaughnessy Decl. I Ex.
6, Unredacted Sweet Op. at ¶ 95. Bob Lahman, Optum’s corporate representative also agreed
that one way in which Optum “move[s] market share” is through preferred brand status and its
accompanying “copay differentials.” O’Shaughnessy Decl. I Ex. 360, Lahman (Optum) Dep.
47:7-50:14; see also O’Shaughnessy Decl. I Ex. 349, Berndt Dep. 187:8-190:14 (discussing
formulary tiering and its effect on co-payments which has the effect of steering share towards a
preferred product). None of this evidence is inconsistent with health plans “managing costs.”
Because the fact is supported by the evidence and DPPs have not disputed it by citing to
admissible evidence, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
370. Patients will pay higher prices for a drug, in the form of higher “co-pays,” if a
pharmaceutical drug is on “Tier 3” of a formulary. Moreover, health plans may impose
additional requirements, called “step edits,” that require patients to try drugs on lower tiers
before authorizing the use of a “Tier 3” drug.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 16-21, 95; Ex. 360,
Lahman (Optum) Dep. 45:18-47:6; 53:15-55:19.
Defendants’ Evidence: Ex. 198, Hausman (NYAG) Decl. ¶ 13, Ex. 203, FRX-AT-
01776549 ¶¶ 16-17 (discussing “utilization management tools” which “are instituted in
an attempt to maximize the possibility that covered drugs are appropriately utilized”); Ex.
359, Devlin Dep. 235:9-236:16.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 187:8-190:14 (noting that “various
utilization tools” including “steps edits [and] prior authorizations” favor lower tier
products over higher tier ones).
Response: Admitted.
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371. Forest undertook extensive negotiations with multiple health plans to obtain
“preferred brand” status for Namenda XR on the health plan’s Medicare Part D and commercial
drug formularies, so that patients who wished to try Namenda XR did not face obstacles, like
tiering or step edits, in doing so.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 19-21, 95; Ex. 360,
Lahman (Optum) Dep. 83:2-84:3; 86:1-87:23; 94:13-95:5 (discussing the Forest
negotiations with Optum).
Defendants’ Evidence: Ex. 198, Hausman (NYAG) Decl. ¶ 13; Ex. 11, Meury (NYAG)
Decl. ¶ 12; Ex. 209, FRX-AT-01777928 (BlueCross BlueShield of North Carolina
Evidence of Coverage Formulary); Ex. 210, FRX-AT-01778283 (CareMore 2015
Formulary); Ex. 211, FRX-AT-01778355 (WellCare 2015 Comprehensive Formulary);
Ex. 212, FRX-AT-01778462 (Blue Shield of California Medicare Basic Plan 2015
Formulary); Ex. 213, FRX-AT-01778527 (Gundersen Health Plan Senior Preferred HMO
2015 Formulary); Ex. 214, FRX-AT-01778633 (HAP Medicare Solutions 2015
Formulary); Ex. 215, FRX-AT-01778749 (Horizon Medicare Blue Patient-Centered
w/RX (HMO) 2015 Formulary); Ex. 216, FRX-AT-01778879 (Network Health 2015 Part
D Formulary); Ex. 217, FRX-AT-01779008 (Humana 2015 Prescription Drug Guide);
Ex. 218, FRX-AT-01779208 (HealthNet Cal MediConnect Plan 2015 List of Covered
Drugs); Ex. 359, Devlin Dep. 136:7-25; 233:16-237:6; 260:25-262:17.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 187:8-190:14.
Response: Denied. The purpose of Forest’s negotiations with health plans was not
“so that patients who wished to try Namenda XR did not face obstacles, like tiering or step edits,
in doing so,” but instead to convert patients from Namenda IR to XR before market entry of
generic competition to Namenda IR. O’Shaughnessy Decl. Ex. 231, Berndt Report at ¶ 24 (citing
O’Shaughnessy Decl. Ex. 195, FRX-AT-01606209-10 (June 13, 2012 email noting, “We have
heard from managed care customers that if we launch with less than 18 months until LOE for IR
then they would likely restrict XR and just wait for the generic IR ... Managed care and LTC tells
us that anyone converted is likely to stay converted ... new patients could be hard to get XR after
IR LOE though.”)). See also Litvin Decl. Ex. 263, Devlin Invest. Hearing Tr. (Aug. 21, 2014) at
75:5-76:23; Litvin Decl. Ex. 461, FRX-AT-00952574-82 at ‘77 (“[Optum] said they would add
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[Namenda XR] on 1/1/2014 and assist us with communicating the IR withdrawal from market to
the membership. They would provide a letter (we will get a sample soon) that would promote the
conversion to IR once the removal date was announced”). Additionally, not one of the cited
documents supports the contention that patients “wished to try Namenda XR.” Indeed, it is
doctors and health care providers who determine prescriptions, rather than patients with
moderate to severe Alzheimer’s disease. See O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶
87; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶ 18. O’Shaughnessy Decl. Exs. 6 and
360 do not support the assertion. Judge Sweet found simply that “Forest negotiated with health
plans to obtain ‘preferred brand’ status” and did not opine as to Forest’s motivation for such
negotiations nor did he characterize the negotiations as “extensive.”
O’Shaughnessy Decl. Ex. 6 at ¶ 95. Moreover, Mr. Lahman did not testify as described,
Mr. Lahman simply described generally issues concerning rebate negotiations with
manufacturers, and speculated about the negotiations between Forest and Optum in the cited
pages as he was not involved in those negotiations and had no knowledge of their substance. See
O’Shaughnessy Decl. Ex. 360, Lahman (Optum, July 14, 2017) Dep. at 83:2-84:3; 86:1-87:23;
94:13-95:5. Dr. Berndt’s testimony simply described in general terms the negotiation process
between pharmaceutical companies and PBMs with respect to rebates and formulary placement.
O’Shaughnessy Decl. Ex. 349, Berndt Dep. at 187:8-190:14. Finally, the documents cited in
“Defendants’ Evidence” merely recount the tier formulary placement of Namenda IR and XR on
various health plans.
Forest’s Objection: DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Additionally, the documents cited by Forest support
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the above fact. As Judge Sweet noted, Forest negotiated with the top Part D national health
plans to obtain preferred brand status for Namenda XR. See O’Shaughnessy Decl. I Ex. 11,
Meury (NYAG) Decl. at ¶ 12; O’Shaughnessy Decl. II Ex. 389, Devlin (NYAG) Decl. at ¶¶ 8-9;
O’Shaughnessy Decl. I Ex. 6, Unredacted Sweet Op. at ¶ 95. Negotiating with health plans to
achieve this coverage was important to Namenda XR drug adoption because, otherwise,
managed care organizations may refuse to cover a drug on their formulary (or place it on a non-
preferred status), or may institute utilization management tools such as step edits or prior
authorizations. O’Shaughnessy Decl. II Ex. 389, Devlin (NYAG) Decl. at ¶¶ 3-7. Forest
recognized that health plans may use some, or all, of these tools to reduce demand for Namenda
XR; Forest, therefore, engaged in substantial negotiations with health plans to avoid non-
preferred placement (or treatment) of Namenda XR. O’Shaughnessy Decl. I Ex. 198, Hausman
(NYAG) Decl. ¶ 13; O’Shaughnessy Decl. II Ex. 389, Devlin (NYAG) Decl. ¶¶ 3-9;
O’Shaughnessy Decl. I Ex. 11, Meury (NYAG) Decl. at ¶¶ 10-13.
DPPs response that testimony by Optum’s corporate representative Bob Lahman was
speculation is without merit. Mr. Lahman was Optum’s 30(b)(6) witness. In preparing for the
deposition, he spoke with “the person that works on [his] team who . . . handled the Namenda
and Namenda XR contract negotiations” and that this person educated him about the contracting
process for adding Namenda XR to the Optum formulary. O’Shaughnessy Decl. II Ex. 390,
Lahman (Optum) Dep. 12:13-13:7. As Optum’s corporate representative, it was not speculation
when Mr. Lahman explained that Optum uses formulary tiering and utilization management tools
to drive demand to lower cost products. O’Shaughnessy Decl. I Ex. 360, Lahman (Optum) Dep.
86:24-88:13; see also O’Shaughnessy Decl. I Ex. 349, Berndt Dep. 187:8-190:14 (describing
formulary coverage and the techniques health plans, including Optum, use to incentivize patients
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to take one drug over another). Mr. Lahman also testified that Forest “aggressively” discounted
Namenda XR so that Optum would cover Namenda XR as a preferred brand and “to entice
patients to use XR.” O’Shaughnessy Decl. I Ex. 360, Lahman (Optum) Dep. 86:1-87:23.
Accordingly, because there is no dispute regarding the fact, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
372. Forest also view “preferred brand” placement on health plan formularies as
essential for drug adoption, since the failure to place a drug on the “preferred brand” tier
significantly hinders the overall pool of patients that can access the drug at comparable prices.
Defendants’ Evidence: Ex. 219, FRX-AT-03793470, at 3479 (“Better access: Needed to
make sure most patients would not pay more for Namenda XR.”); Ex. 359, Devlin Dep.
233:16-237:6; Ex. 54, Fowdur Rep. App’x. A ¶ 16 (“Data from Forest indicates the date
that each plan added Namenda XR onto its formulary and hence these dates in
combination with the enrollment data provide a monthly benchmark for covered lives
with access to Namenda XR on a preferred-brand tier.”).
Undisputed Record Evidence: Ex. 360, Lahman (Optum) Dep. 45:18-47:6.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 187:8-190:14.
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The testimony cited in “Plaintiffs’
admissions” consists of Dr. Berndt simply describing in general terms the negotiation process
between pharmaceutical companies and PBMs with respect to rebates and formulary placement.
O’Shaughnessy Decl. Ex. 349, Berndt Dep. at 187:8-190:14. The cited testimony does
not relate to Forest’s views on formulary placement. Defendants mischaracterize the testimony
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of Bob Lahman who simply described generally issues concerning rebate negotiations with
manufacturers and made no assertions regarding Forest’s views. O’Shaughnessy Decl. Ex. 360,
Lahman (Optum, July 14, 2017) Dep. at 45:18-47:6. Finally, the documents cited in
“Defendants’ Evidence” merely recount the tier formulary placement of Namenda IR and XR on
various health plans.
Forest’s Objection: The evidence cited by Forest supports the undisputed fact above.
Both O’Shaughnessy Exs. 219 and 359 describe Forest’s view that obtaining “preferred brand”
status was important to drug adoption, specifically in the context of Namenda XR adoption.
O’Shaughnessy Decl. I Ex. 219, FRX-AT-03793470, at -3479 (“Better access: Needed to make
sure most patients would not pay more for Namenda XR.”); O’Shaughnessy Decl. I Ex. 359,
Devlin Dep. 233:16-237:6. Similarly, both Dr. Berndt and Bob Lahman testified that the failure
of a brand manufacturer to achieve preferred brand status can impact demand for that product.
See O’Shaughnessy Decl. I Ex. 360, Lahman (Optum) Dep. 45:18-47:6; O’Shaughnessy Decl. I
Ex. 349, Berndt Dep. 187:8-190:14. Accordingly, because the fact is not disputed, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
373. As of July 1, 2013, Namenda XR had Medicare Part D formulary coverage for six
of the nation’s top ten Medicare Part D health plans, and two of the top ten commercial health
plans.
Defendants’ Evidence: Ex. 220, FRX-AT-03864752 at 4807; Ex. 54, Fowdur Rep. ¶¶
105-06 (attesting that roughly 75% of Namenda XR sales depended on Medicare
formulary placement).
Response: Admitted in part, denied in part. Admitted that Namenda had coverage on
six of the top Ten Medicare Part D health plans and two of the top ten health plans in July 2013.
Denied to the extent Defendants are implying that the formulary coverage was static between
July 2013 and January 2014, or that the Hard Switch campaign had no effect on formulary
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placement. In fact, between July 2013 and January 2014, Forest obtained additional formulary
coverage in advance of January 2014 (and the February 14, 2014 widespread public
announcement of the hard switch), in part based upon the fact that Forest told managed care
organizations that Forest would do a hard switch from Namenda IR to Namenda XR. See
O’Shaughnessy Decl. Ex. 231, Berndt Report ¶ 56 & n.107; O’Shaughnessy Decl. Ex. 55, Berndt
Reply Report ¶¶ 31-32; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 52-55; Response to
¶ 374.
By early September 2013, Forest had favorable formulary placement on six of the eight
top Medicare Part D Care accounts and six of the nine top Commercial accounts. O’Shaughnessy
Decl. Ex. 220, FRX-AT-03864752-4815 at 4807 (August 12, 2013 SCC meeting notes reflected
that Namenda XR was on Tier 2 of these Strategic Accounts Medicare Part D formularies:
Silverscript/Caremark, Humana, Express Scripts/Medco, Coventry,
Cigna, Catamaran/SXC/CatalystRx, and the following Commercial Accounts: Express
Scripts/Medco, Caremark, Catamaran/SXC/CatalystRx, Aetna, Cigna, and Humana. Namenda
was not on the following Medicare Part D Strategic accounts: Optum/United and Aetna, (for
Medicare Part D)). See also Litvin Decl. Ex. 54, FRX-AT-01647253, slide 3-5 (October 11, 2013
Namenda XR Managed Care Tracker noting the six Medicare Part D accounts reflected Effective
Dates of June and July 2013; the six Commercial Accounts reflected Effective Dates of June
through October 2013); Litvin Decl. Ex. 37, FRX-AT-01610895-96 at 95 (Oct. 15, 2013 memo
re “Namenda XR-OptumRx (AARP) Medicare Part D,” stating “Namenda XR has good
formulary coverage with 4 of the top 5 National Medicare Part D plans in Tier 2 and over 100
regional plan formularies in Tier 2.”). The only strategic accounts where Namenda XR was NF
(non-formulary) were Optum/United and Aetna, both for their Medicare Part D. See
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O’Shaughnessy Decl. Ex. 220, FRX-AT-03864752-815 at ‘807.
Forest gained formulary coverage with Optum as of January 2014 after informing Optum
in October 2013 that Forest would discontinue Namenda IR. In October 2013, National Account
Manager, Jerry Hester described his discussions with Optum about its formulary coverage for
Namenda XR, and noted that “They said they would add on 1/1/2014 and assist us with
communicating the IR withdraw[a]l from market to the membership.” Litvin Decl. Ex. 138,
FRX-AT-03684464-66 at ‘464 (October 29, 2013 email from Jerry Hester re “IR/XR Optum
PD”); Litvin Decl. Ex. 361, Lahman (Optum) Dep. at 143:13-145:11 (Optum placed Namenda
XR on formulary because I feared withdrawal of IR might leave patients without therapy). Forest
was using the discontinuation decision with managed care organizations well in advance of the
February 2014 announcement. Mr. Devlin essentially acknowledged Forest’s prior
communications the day after the February 14, 2014 announcement when he wrote the following
in an email to Bill Meury:
We got to every national account and prepped them that we were highly likely to
discontinue producing Namenda IR in the first qtr of the year ... also, Troy and the
Rams [Regional Account Managers] did same with our bigger regional accounts.
Last week I personally called Mike Anderson from Optum/United, the largest
Med D account, and told him we were on track and to expect an announcement
within a couple of weeks. We updated Silverscript/Caremark a week ago that this
was likely to happen within weeks. [...] We also produced sample letters that
accounts can cut and paste from to send to their [I]R patients and providers to
help accelerate conversion now rather than in the summer.
Litvin Decl. Ex. 11, FRX-AT-00948025 (Feb. 15, 2014 email from Devlin). Mr. Devlin
had begun contacting other managed care organizations to discuss discontinuation immediately
after receiving some survey results in December 2013 including Express Scripts, CVS’s Silver
Script, and Humana, to discuss their reaction to discontinuance. Litvin Decl. Ex. 263, Devlin
Dep. (Aug. 21, 2014) at 43:25-45:19. This is consistent with the observations of a market analyst
who had noted Forest had contacted large payors about the discontinuance well before February
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2014 and asked them “to ‘work with them’ to enable the switch.” Litvin Decl. Ex. 14, FRX-AT-
00951656-68 at 58 (Dec. 18, 2013 Bernstein Research analyst report). Forest had been making
the market aware of its intention to discontinue Namenda IR since shortly after the June 2013
launch of Namenda XR. During a July 2013 earnings conference call, Forest Chief Commercial
Officer Elaine Hochberg stated, “we do believe a hard switch is something to be considered.”
Litvin Decl. Ex. 465, Lamb Dep. (Oct. 6, 2017) Ex. 12 at p.18 Q1 2014 Forest Laboratories, Inc.
Earnings Conference Call – Final, July 23, 2013. Ms. Hochberg repeated that sentiment during
an October 2013 earnings call, stating, “the issue of a hard switch for Namenda XR has been
under very careful consideration here for quite some time.” Litvin Decl. Ex. 47, FRX-AT-
01627768-91 at 780 (Bloomberg Transcript of Forest’s Q2 2014 Earnings Call, October 22,
2013, p. 10). Further, an October 2013 Seeking Alpha article notes that, during Forest’s second-
quarter earnings call, Forest CEO Brent Saunders “did lay[ ]out the immediate initiatives for
Forest.” Litvin Decl. Ex. 463, FRX-AT-03598502-09 at 08. According to the article, second on
Mr. Saunder’s list was “[a]ccelerating the patient switch from Namenda to the XR version. The
current conversion rate is 17%. Since Namenda’s patent expires in 2015 the company is
considering a ‘hard switch’ by selling only Namenda XR. Given the lack of therapeutic options
in Alzheimer’s we believe they have little [to] lose by doing so.” Id. A J.P. Morgan analyst
report discussing the same second-quarter earnings release noted that, “[i]nterestingly,
management appeared more open to a hard switch to Namenda XR (i.e., no longer shipping
Namenda) at some point in the future and we believe such an event would represent upside to
our estimates.” Litvin Decl. Ex. 464, FRX-AT-04610773 (J.P. Morgan, “Forest Laboratories,
Inc.: Raising Estimates On Lower Opex Assumptions; Shares Well Positioned Into Strategic
Update,” October 22, 2013) at p. 2.
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In response to Robert Jackson’s November 2013 email asking whether someone had
“communicated our strategy to Merz,” Wael Fayad (also a Forest employee) stated “if you mean
hard switch the answer is yes.” Litvin Decl. Ex. 462, FRX-AT-01594102. Similarly, a December
2013 analyst report notes that “Forest announced it is ‘considering’ a hard switch, removing the
IR version from the market and forcing it to the second generation product (Namenda XR). ...we
(and the market) assumed Forest would successfully hard-switch.... In the most likely scenario,
the hard switch will happen.” Litvin Decl. Ex. 14, FRX-AT-00951656-68 at 56. The same
analyst report indicated that Forest had already been in communication with large payers
regarding the switch: “Forest has approached the larger payors. It also stated it is ‘seriously
considering’ pulling the IR formulation from the market place. Forest asked the payors to ‘work
with them’ to enable the switch.” Id. at 58. Brent Saunders of Forest reiterated the company’s
intention at a Goldman Sachs Healthcare CEOs Unscripted Conference held on January 7, 2014,
stating that the company was “actively considering and debating a hard switch.” Litvin Decl. Ex.
104, FRX-AT-01782799-2812 at 06. Regarding Forest’s strategy, Mr. Saunders also stated that
“If you kind of look at the timing of IR, IR will go generic in July of 2015. And so the sweet spot
for a switch would be in the fall, and so that’s kind of how we’re thinking about it.” Id.
Forest’s Objection: DPPs have admitted the fact as stated. The remainder of DPPs’
response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
DPPs also omit the fact that Optum’s corporate representative, Bob Lahman, testified that the
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decision to add Namenda XR to Optum’s formulary was made somewhere at the end of 2012 or
the beginning of 2013. O’Shaughnessy Decl. I Ex. 360, Lahman (Optum) Dep. 83:8-84:3.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
374. By January 1, 2014, nine of the nation’s top health plans had added Namenda XR
to the “preferred brand access” tier of their Medicare Part D formularies; these additions resulted
in Namenda IR and XR being placed on the same tier for 78.5% of all Medicare Part D
prescriptions.
Defendants’ Evidence: Ex. 221, FRX-AT-01734505 at 4509 (“With these changes,
Namenda XR will have Preferred Brand formulary access to over 26 million Part D
patients, bringing our total Medicare Preferred Brand formulary access from 53% to 80%.
This significantly increased access represents a tremendous opportunity for Forest to
exceed our conversion goals for Namenda XR.”); Ex. 223, FRX-AT-03685981 (listing
total prescriptions with preferred access at 78.5%); Ex. 222, FRX-AT-01615958 at -5961
(“Very good week for XR ... The increase is most likely due to increased conversion,
perhaps a strong signal of the impact of the formulary wins.”).
Response: Admitted in part, denied in part. Admitted that Namenda had coverage on
nine of the top Ten Medicare Part D health plans as of January 1, 2014. Denied to the extent
Defendants are implying that the formulary coverage was static between July 2013 and January
2014, or that the Hard Switch campaign had no effect on formulary placement between July
2013 and January 2014. In fact, between July 2013 and January 2014, Forest obtained additional
formulary coverage in advance of January 2014 (and the February 14, 2014 widespread public
announcement of the hard switch), in part based upon the fact that Forest told managed care
organizations that Forest do a hard switch from Namenda IR to Namenda XR. See Response to ¶
373.
Forest’s Objection: DPPs have admitted the fact as stated. The remainder of DPPs’
response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
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56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
375. Forest achieved similar results for formulary placement on these same health
plans’ commercial formularies.
Defendant’s Evidence: Ex. 224, FRX-AT-03815141 (listing the formulary coverage for
all health care plans including the Tier 2 status on payors like Aetna, Humana, Cigna,
Express Scripts and others); see generally Ex. 209, FRX-AT-01777928; Ex. 210, FRX-
AT-01778283; Ex. 211, FRX-AT-01778355; Ex. 212, FRX-AT-01778462; Ex.213, FRX-
AT-01778527; Ex. 214, FRX-AT-01778633; Ex. 215, FRX-AT-01778749; Ex. 216,
FRX-AT-01778879; Ex. 217, FRX-AT-01779008; Ex. 218, FRX-AT-01779208; Ex. 225,
FRX-AT-01834249.
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). O’Shaughnessy Decl. Ex. 224 does not
show coverage for national accounts, whereas the documents cited above concern Namenda XR
coverage on national Part D plan formularies. See, e.g., O’Shaughnessy Decl. Ex. 223.
O’Shaughnessy Decl. Exs. 209-218 also concern regional accounts instead of national accounts.
O’Shaughnessy Decl. Exs. 214 & 218 do not show that Namenda XR is covered.
Moreover, it is specifically denied that “Forest obtained similar results” on commercial
formularies. Forest had placement on most commercial formularies long before January 2014.
By early September 2013, Forest had favorable formulary placement on six of the nine
top Commercial accounts. O’Shaughnessy Decl. Ex. 220, FRX-AT-03864752-4815 at 07
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(August 12, 2013 SCC meeting notes reflected that Namenda XR was on Tier 2 of the following
Commercial Accounts: Express Scripts/Medco, Caremark, Catamaran/SXC/CatalystRx, Aetna,
Cigna, and Humana. See also Litvin Decl. Ex. 54, FRX-AT-01647253, slide 5 (October 11, 2013
Namenda XR Managed Care Tracker noting the six Commercial Accounts reflected Effective
Dates of June through October 2013); Litvin Decl. Ex. 37, FRX-AT-01610895-96 at 95 (Oct. 15,
2013 memo subject “Namenda XR- OptumRx (AARP) Medicare Part D,” stating “Namenda XR
has good formulary coverage with 4 of the top 5 National Medicare Part D plans in Tier 2 and
over 100 regional plan formularies in Tier 2.”). The only strategic accounts where Namenda XR
was NF (non-formulary) were Optum/United and Aetna, both for their Medicare Part D. See
O’Shaughnessy Decl. Ex. 220, FRX-AT-03864752-815 at ‘807.
Forest was communicating the discontinuation decision with managed care organizations
well in advance of the February 2014 announcement. See Response to ¶ 373.
Forest’s Objection: The evidence cited supports the above fact. O’Shaughnessy Decl. I
Ex. 224 is a Microsoft Excel spreadsheet titled “Copy of Formulary Coverage xls” which lists
several commercial formularies and their coverage tier of Namenda IR and Namenda XR. The
exhibit reflects that Namenda IR and Namenda XR were covered at the same tier on several
commercial formularies. Because DPPs’ response does not provide any evidentiary basis to
contest the statement, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
C. Namenda XR Priced at a Discount to Namenda IR
376. To achieve its goal of comparable formulary coverage to Namenda IR (i.e.
comparable “preferred brand” tier placement across all major Medicare Part D and Commercial
formularies), Forest aggressively discounted Namenda XR in negotiations with health plans.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 97.
Defendants’ Evidence: Ex. 198, FRX-AT-01779957; Ex. 226, FRX-AT-01737553 at
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22:6-23:20; Ex. 362, FRX-AT-01732297, Kane Dep. 276:11-277:4; Ex. 359, Devlin Dep.
234:18-235:1, 236:17-237:6, 261:14-262:17;
Plaintiffs Admissions: Ex. 363, Lamb (Oct. 6) Dep. 158:9-159:9; DPPs’ Statement of
Material Facts ISO Count One at ¶ 115.
Response: Admitted in part, denied in part. Admitted that Forest offered discounts to
health plans. Denied to the extent that Forest is implying that discounting was the only, or even
the main, reason why health plans gave “comparable formulary coverage” to Namenda XR.
Forest obtained formulary coverage in certain plans only after communicating that it would
discontinue Namenda IR. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶ 56;
O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 31-32; O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶¶ 52-55. For example, Forest gained coverage with Optum as of January 2014
after telling Optum it would discontinue Namenda IR in October 2013. In October 2013,
National Account Manager, Jerry Hester described his discussions with Optum about its
formulary coverage for Namenda XR, and noted that “They said they would add on 1/1/2014 and
assist us with communicating the IR withdraw[a]l from market to the membership.” Litvin Decl.
Ex. 138, FRX-AT-03684464-66 at ‘464 (October 29, 2013 email from Jerry Hester re “IR/XR
Optum PD”). Forest was using the discontinuation decision with managed care organizations
well in advance of the February 2014 announcement. See Litvin Decl. Ex. 11, FRX-AT-
00948025 (February 15, 2014 email from Devlin recounting prior discussions with health plans
about discontinuation). Mr. Devlin had begun contacting other managed care organizations to
discuss discontinuation immediately after receiving some surveys in December 2013. Mr. Devlin
testified that after he received a report of survey results in 2013, he contacted managed care
organizations Express Scripts, CVS’s Silver Script, and Humana, to discuss their reaction to
discontinuance. Litvin Decl. Ex. 263, Devlin (Aug. 21, 2014 Investigational Hearing) Dep. at
43:25-45:19. This is consistent with the observations of a market analyst who had noted Forest
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had contacted large payors about the discontinuance well before February 2014 and asked them
“to ‘work with them’ to enable the switch.” Litvin Decl. Ex. 14, FRX-AT-00951656-68 at 58
(Dec. 18, 2013 Bernstein Research analyst report). Moreover, O’Shaughnessy Decl. Ex. 198
does not support the assertion. It merely discusses Namenda XR formulary placement, but does
not attribute formulary placement to price discounts.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
Additionally, DPPs are incorrect that “Forest gained coverage with Optum as of January
2014 after telling Optum it would discontinue Namenda IR in October 2013.” Optum’s
corporate representative, Bob Lahman, testified that the decision to add Namenda XR to
Optum’s formulary was made somewhere at the end of 2012 or the beginning of 2013.
O’Shaughnessy Decl. I Ex. 360, Lahman (Optum) Dep. 83:8-84:3. Instead, Forest deeply
discounted Namenda XR in order to convince Optum to cover Namenda XR. See infra ¶ 379.
Nevertheless, DPPs’ response is immaterial because DPPs’ experts have made no efforts to
isolate the effect (if any) of the announcement on conversion.
Forest also objects because the issue of when the hard switch began has already been
decided. Indeed, DPPs expressly admit that the “Court has already determined that . . . the hard
switch started with Forest’s withdrawal announcement” (e.g., February 14, 2014). See DRPAF ¶
393.
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Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
377. For many health plan and pharmaceutical benefits manager, Forest set Namenda
XR’s Wholesale Acquisition cost at 5% less than Namenda IR.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 96.
Defendants’ Evidence: Ex. 11, Meury (NYAG) Decl. ¶ 12; Ex. 224, FRX-AT-03815141
(listing the formulary coverage for all health care plans for Namenda XR).
Response: Admitted in part, denied in part. Admitted that Namenda was so priced to
an unidentified set of plans. Denied to the extent that Forest is implying that it was price alone,
instead of the early announcement of the hard switch, that caused health plans to cover Namenda
XR. See Response to ¶ 376. Moreover, O’Shaughnessy Decl. Ex. 224 does not support the
assertion because it does not discuss Namenda XR’s wholesale acquisition cost.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. DPPs’ experts made no attempt to isolate the effect of the
announcement (if any) on conversion. Accordingly, the fact should be deemed admitted. Fed.
R. Civ. P. 56(e)(2).
378. For most major health plans, Forest discounted Namenda XR even further. “On
average, Namenda XR was sold at a 16% discount compared to Namenda IR.”
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 96.
Defendants’ Evidence: Ex. 226, FRX-AT-01737553 at 22:3-25:1 (noting that “the health
plans demand[ed] a discount . . . for every product and they have a great deal of
leverage”); Ex. 11, Meury (NYAG) Decl. ¶ 12; Ex. 359, Devlin Dep. 233:19-234:17
(explain that Forest had “to negotiate and discount [its] price [for health plans], and those
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companies are very formidable negotiators. That’s their sole job is to negotiate the lowest
price possible for them and the highest discounts or rebates back from the
manufacturer.”).
Response: Admitted in part, denied in part. Admitted that Namenda was so priced.
Denied to the extent that Forest is implying that it was price alone, instead of the early
announcement of the hard switch, that caused health plans to cover Namenda XR. See Response
to ¶ 376.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Forest hereby incorporates by reference its objections to DPPs’
responses to ¶ 376. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
379. For larger formularies, including Optum (which constituted over 20% of the
Medicare Part D marketplace), discounts ranged from to over .
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 96-97 (“Discounts that
Forest offered ranged anywhere from . For example, one of the largest
providers of the Medicare Part D benefit in the country secured a discount of over .
... The total discounts given by Forest exceed $200 million.”) (citing testimony from Bill
Meury and Mark Devlin); see also Ex. 224, FRX-AT-03815141 (listing the formulary
coverage for all health care plans including the Tier 2 status on payors like Aetna,
Humana, Cigna, Express Scripts and others); Ex. 360, Lahman (Optum) Dep. 81:7-10
(“Q: Okay. Okay. And then for Namenda XR it refers to a rebate amount of ,
correct? A: Correct.”).
Response: Admitted in part, denied in part. Admitted that Namenda was so priced to
an unidentified set of plans. Denied to the extent that Forest is implying that it was price alone,
instead of the early announcement of the hard switch, that caused health plans to cover Namenda
See Response to ¶ 376. Moreover, O’Shaughnessy Decl. Ex. 224 does not discuss the discounts
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secured by Optum.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Forest hereby incorporates by reference its objections to DPPs’
responses to ¶ 376. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
D. Projected Conversion Rates
380. Since Forest lacked Namenda XR sales data before the drug launched, Forest
informed its decision making by considering several analogous launches for other extended
release products that had been launched.
Defendants’ Evidence: Ex. 359, Devlin Dep.86:23-88:19 (discussing FRX-AT-
01657071); 93:15-20; 90:16-23 (noting that Forest created “analogue analysis” using
IMS NPA data before having market data), 137:1-24; Ex. 325, Snyder Dep 81:24-82:14
(describing the process for building Forest’s early Namenda XR forecasts as “look[ing]
at, you know epidemiology data for baby boomers”); Ex. 227, FRX-AT-01657071; Ex.
370, FRX-AT-04134771 (discussing various analogues for Namenda XR launch).
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 163:5-19 (“I believe Ms. Snyder said that
they used a lot of historical analogues in creating their forecasts, and most of those
historical analogues had been promoted with soft switch tactics because the number of
hard switches that had actually occurred before 2013 was minimal.”).
Response: Admitted.
381. Depending on which analogues were considered, estimates of patient conversion
to Namenda XR varied; several models of analogues anticipated conversion to be in the
mid-thirties at 12 months, with others predicting conversion in the mid-forties by 24 months.
Defendants’ Evidence: Ex. 228, FRX-AT-01783541; Ex. 229, FRX-AT-01832055; Ex.
230, FRX-AT-01657074.
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Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). O’Shaughnessy Decl. Ex. 229, FRX-AT-
01832055 simply provides some conversion rates for analogues and does not even attempt to
apply them to Namenda XR; it tellingly notes a “stretch goal” (not a prediction or a forecast) for
Namenda XR of 40-50% (at FRX-AT-01832062). O’Shaughnessy Decl. Ex. 230, FRX-AT-
01657074 is a February 14, 2014 email concerning notification to Medscape about the
discontinuation announcement. O’Shaughnessy Decl. Ex. 228 reflects that at best Namenda XR
could reach 41% share. O’Shaughnessy Decl. Ex. 228, FRX-AT-01783541 at 60. The later
analysis of the referenced analogues, which Forest did not cite here, factored in issues unique to
Namenda, such as Namenda XR’s exposure to Long Term Care, and were refined ultimately to
project a conversion of approximately 24% at 18 months. Litvin Decl. Ex. 147, FRX-AT-
03718466-91 at ’66, ’68 (April 23, 2013 email attaching “Analogues for Namenda XR (based on
XR conversion as % of franchise)”, noting “Based on the newer analogues and the new approach
(conversion calculated as % of franchise) conversion rate at 18 months is 24% (lower than with
older analogues)”).
Forest’s Objection: The evidence cited by Forest supports the undisputed fact above.
Ex. 228 consists of Namenda XR conversion analogues which showed analogues reaching mid-
thirty percent conversion (or higher) after twelve months and forty percent conversion (or
higher) after 24 months. See O’Shaughnessy Decl. I Ex. 228, FRX-AT-01783541 at 3554-60,
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3581; see also O’Shaughnessy Decl. II Ex. 391, FRX-AT-01616162. Furthermore, when Forest
applied its experience analyzing analogues to its Namenda XR forecasts, Forest ultimately
projected that 40% of Namenda IR prescriptions would transition to Namenda XR. See
O’Shaughnessy Decl. I Ex. 240, FRX-AT-01612940 (October 2013 forecast reflecting 40%
projected conversion). Additionally, DPPs’ response consists of improper argument or a
recitation of different purported facts, but no evidentiary basis to contest the statement.
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
382. In some instances, comparison of analogous launches using “softswitch”
marketing efforts yielded a range of outcomes as high as 69% conversion for Namenda XR.
Defendants’ Evidence: Ex. 227, FRX-AT-01657071; Ex. 229, FRX-AT-01832055.
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). O’Shaughnessy Decl. Ex. 229, FRX-AT-
01832055 simply provides some conversion rates for analogues and does not even attempt to
apply them to Namenda XR; it tellingly notes a “stretch goal” (not a projection or forecast) for
Namenda XR of 40-50%. O’Shaughnessy Decl. Ex. 227, FRX-AT-01657071 is the cover email
for the document cited in the above response to ¶ 381, Litvin Decl. Ex. 147, FRX-AT-03718466-
91 at ’66, ’68 (April 23, 2013 email attaching “Analogues for Namenda XR (based on XR
conversion as % of franchise)”, noting “Based on the newer analogues and the new approach
(conversion calculated as % of franchise) conversion rate at 18 months is 24% (lower than with
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375
older analogues)”).
Forest’s Objection: The evidence cited by Forest supports the undisputed fact above.
The attachment to O’Shaughnessy Decl. I Ex. 227 contains several Namenda XR conversion
analogues, one of which shows a conversion rate of 69%. O’Shaughnessy Decl. II, Ex. 392,
FRX-AT-01657073, at slide 3. Similarly, Ex. 229 is a PowerPoint presentation specifically
discussing conversion analogues for Namenda XR, one of which reached 68 percent conversion.
See O’Shaughnessy Decl. I Ex. 229, FRX-AT-01832055 at 2062. Because DPPs provide no
evidentiary basis to contest the statement, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2)
383. Having reviewed prior launches (for pricing, formulary placement, expected
consumer and physician reaction, and other considerations), Forest began attempting to estimate
the likely rate of conversion for both new and existing patients switching from Namenda IR to
Namenda XR.
Plaintiffs’ Admissions: Ex. 231, Berndt Rep. I Ex. D.
Defendants’ Evidence: Ex. 232, FRX-AT-01595859 (Forecast originally created in
1/28/2007); Ex. 233, FRX-AT-01671051 (same); Ex. 234, FRX-AT-01614825 (same);
Ex. 235, FRX-AT-01618974(same); Ex. 236, FRX-AT-03727191 (same); Ex. 237,
FRXAT-01613386 (same); see also Ex. 227, FRX-AT-01657071; Ex. 238, FRX-AT-
01639598; Ex. 239, FRX-AT-01612936; Ex. 240, FRX-AT-01612940; Ex. 241, FRXAT-
01608706; Ex. 242, FRX-AT-01639602; Ex. 243, FRX-AT-00952900; Ex. 244, FRX-
AT-03769058; Ex. 247, FRX-AT- 3725539; Ex. 251, FRX-AT-01656854; Ex. 252, FRX-
AT-01619281; Ex. 253, FRX-AT-01639600; Ex. 254, FRX-AT-01614824; Ex. 255,
FRX-AT-01813893; Ex. 256, FRX-AT-01655251; Ex. 257, FRX-AT-01613917; Ex. 258,
FRX-AT-01611806; Ex. 259, FRX-AT- 3727529; Ex. 260, FRX-AT-03793457; Ex. 261,
FRX-AT-03727794; Ex. 262, FRX-AT-03727831; Ex. 263, FRX-AT-03729066; Ex. 264,
116 FRX-AT-03731393; Ex. 265, FRX-AT-03732732; Ex. 266, FRX-AT-03734393; Ex.
248, FRX-AT-01752159.
Response: Admitted in part, denied in part. While it is admitted that Forest began
attempting to estimate the likely rate of conversion for both new and existing patients switching
from Namenda IR to Namenda XR, Plaintiffs deny that the forecasts set forth in “Defendants’
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Evidence” accurately represent such attempts.
For example:
Two of the purported “forecasts” are emails that do not contain any discussion of
conversion rates. See O’Shaughnessy Decl. Exs. 239 (October 14, 2013 email from Lei Meng to
Elizabeth Fung) and 247 (October 29, 2013 email from Lei Meng to Elizabeth Fung).
Two forecasts dated October 8, 2013 appear to be exact duplicates. O’Shaughnessy Decl.
Ex. 240 (FRX-AT-01612940 “Namenda production forecast_10082013 v3 LOE Apr18”) and
O’Shaughnessy Decl. Ex. 242 (FRX-AT-01639602 “Namenda production forecast_10082013 v3
LOE Apr18”).
Six forecasts from October 15, 2013 project 40% conversion but appear to be identical.
See O’Shaughnessy Decl. Ex. 241 (FRX-AT-01608706 “Namenda production
forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 243 (FRX-AT-00952900
“Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 244
(FRX-AT-03769058 “Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy
Decl. Ex. 251 (FRX-AT-01656854 “Namenda production forecast_10152013_Flex XR LOE”);
O’Shaughnessy Decl. Ex. 252 (FRX-AT-01619281 “Namenda production
forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 253 (FRX-AT-01639600
“Namenda production forecast_10152013_Flex XR LOE”).
Finally, fourteen of the forecasts were created on or after October 29, 2013 and include
numerous duplicates. As Dr. Berndt concluded, such post-October 18, 2013 analyses are tainted
by the hard switch decision. Litvin Decl. Ex. 438, Berndt Dep. at 100:2-15. See O’Shaughnessy
Decl. Ex. 234 (FRX-AT-01614825 “Namenda Working Forecast LE3 112513 BPCv2”);
O’Shaughnessy Decl. Ex. 235 (FRX-AT-01618974 “Namenda Working Forecast LE3 120513
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FINAL”); O’Shaughnessy Decl. Ex. 236 (FRX-AT-03727191 “Namenda production
forecast_10292013_Flex XR LOE 120213”); O’Shaughnessy Decl. Ex. 254 (FRX-AT-01614824
“Namenda production forecast_10292013_Flex XR LOE 112513”); O’Shaughnessy Decl. Ex.
255 (FRX-AT-01813893 “Namenda production forecast_10292013_Flex XR LOE
112513MAX”); O’Shaughnessy Decl. Ex. 256 (FRX-AT-01655251 “Namenda production
forecast_10292013_Flex XR LOE 112513_2014 XR price increase removed”); O’Shaughnessy
Decl. Ex. 257 (FRX-AT-01613917 “Namenda production forecast_10292013_Flex XR LOE
120213”); O’Shaughnessy Decl. Ex. 258 (FRX-AT-01611806 “Namenda production
forecast_10292013_Flex XR LOE 120213”); O’Shaughnessy Decl. Ex. 259 (FRX-AT-03727529
“Namenda production forecast_10292013_Flex XR LOE 120213 July”); O’Shaughnessy Decl.
Ex. 260 (FRX-AT-03793457 “Namenda production forecast_10292013_Flex XR LOE
112513”); O’Shaughnessy Decl. Ex. 261 (FRX-AT-03727794 “Namenda production
forecast_10292013_Flex XR LOE 120213 SepMAX”); O’Shaughnessy Decl. Ex. 262 (FRX-AT-
03727831 “Namenda production forecast_10292013_Flex XR LOE 120213 SepLOW”);
O’Shaughnessy Decl. Ex. 263 (FRX-AT-03729066 “Namenda production
forecast_10292013_Flex XR LOE 12914”); O’Shaughnessy Decl. Ex. 264 (FRX-AT-03731393
“Namenda production forecast_10292013_Flex XR LOE 120213 disrup10”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
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378
P. 56(e)(2).
384. On November 19, 2012, Forest prepared the first iteration of its Namenda XR
conversion forecast that would be adjustable based on Forest’s understandings about the products
launch.
Defendants’ Evidence: O’Shaughnessy Decl. I Ex. 267, FRX-AT-01774559 (per the
document’s metadata).
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The cited document itself, O’Shaughnessy
Decl. Ex. 267, is denominated as PX63, a copy of a Plaintiff Exhibit in the NY AG action. As
with virtually every forecast that Forest produced in discovery, it lists a creation date of Nov. 19,
2012, but the forecast appears to include actual sales data through May 2013, see O’Shaughnessy
Decl. Ex. 267, FRX-AT-01774559_0009-10.
Forest’s Objection: Although Forest’s conversion forecasts were updated several times,
the metadata associated with Ex. 267, like later versions of the forecast, shows the conversion
forecast was initially created on November 19, 2012. As DPPs provide no evidentiary basis to
contest the statement, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
385. That forecast – and its later iterations - contain numerous assumptions, including:
(a) the date of Namenda XR Launch; (b) the rate of conversion by Long Term Care facilities
from Namenda IR to Namenda XR; (c) the rate of conversion by non-Long Term Care
purchasers from Namenda IR to Namenda XR; (d) the date (if applicable) for Namenda IR
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withdrawal; (e) the anticipated launch date of Forest’s Fixed Dose Combination product (which
contained Namenda XR and generic Donepezil); (f) the pricing of Namenda IR, Namenda XR,
and the Fixed Dose Combination; (g) the anticipated date of entry for generic Namenda IR; (h)
the anticipated rate of erosion for branded Namenda IR due to the entry of generic Namenda IR
and (i) the anticipated rate of erosion for branded Namenda XR due to the entry of generic
Namenda IR
Defendants’ Evidence: Ex. 267, FRX-AT-01774559 (on table labeled “Namenda
Monthly_Conventional,” beneath heading labeled “assumptions ”); see also Ex. 239,
FRX-AT-01612936, Ex. 244, FRX-AT-03769058; Ex. 245, FRX-AT-01671038; Ex. 246,
FRX-AT-01671046; Ex. 247, FRX-AT-03725539; Ex. 233, FRX-AT-01671051; Ex. 248,
FRX-AT-01752159.
Response: Admitted.
386. As Forest began to build out these forecasts with increased frequency and an
improved understanding of Namenda XR’s actual sales trends, Forest’s forecasts continued to
predict a range of outcomes with several reaching 40% conversion using only soft switch
marketing efforts.
Plaintiffs’ Admissions: Ex. 231, Berndt Rep. I Ex. D.
Defendants’ Evidence: Ex. 232, FRX-AT-01595859, Ex. 233, FRX-AT-01671051, Ex.
234, FRX-AT-01614825; Ex. 235, FRX-AT-01618974, Ex. 236, FRX-AT-03727191
(same), Ex. 237, FRX-AT-01613386 (same), Ex. 239, FRX-AT-01612936, Ex. 244,
FRX-AT-03769058, Ex. 245, FRX-AT-01671038; Ex. 246, FRX-AT-01671046; Ex. 247,
FRX-AT-03725539; Ex. 233, FRX-AT-01671051; Ex. 248, FRX-AT-01752159.
Response: Denied. The vast majority of Forest’s forecasts prior to October 18, 2013,
when Forest had determined it would do a “hard switch” and would withdraw Namenda IR,
forecasted a 30% peak conversion rate. See O’Shaughnessy Decl. Ex. 55, Berndt Reply Report
Ex. D. Moreover, Defendants cite no evidence that supports their contention, and it is therefore
denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56 “places the
initial burden on the moving party to identify ‘those portions of the ‘pleadings, depositions,
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380
answers to interrogatories, and admissions on file, together with the affidavits, if any, which it
believes demonstrate the absence of a genuine issue of material fact.’”) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986)). Defendants misrepresent Dr. Berndt’s report, which
demonstrates that of the 42 forecasts Dr. Berndt included in his analysis, only six modeled 40%
XR conversion. Moreover, four of the six were prepared mere days before, or in one case, days
after the October 18, 2013 decision to employ a hard switch. See O’Shaughnessy Decl. Ex. 292,
FRX-AT-01731312 (On October 18, 2013, Forest’s Gary Simorski emailed the following: “Dear
All, Forest has made the decision to discontinue sales of Namenda IR and transition all patients
to Namenda XR.”); Judge Sweet found exactly that: “On October 18, 2013, a Forest executive
emailed his colleagues, announcing the decision to withdraw Namenda from the market.”
O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Opinion, ¶ 75. Including the few 40%
projections, Dr. Berndt determined that the median forecast was 33% conversion and the mean
was 32.6%. See O’Shaughnessy Decl. Ex. 55, Berndt Reply Report Ex. D (providing mode,
median and mean for 21 post June 2013 launch forecasts). This is consistent with the findings of
Judge Sweet, and this Court’s adoption of the finding that “Forest’s own internal projections
estimated that, using only soft-switch tactics, only 30% of Namenda IR patients would
voluntarily switch to Namenda XR.” In Re Namenda Direct Purchaser Antitrust Litigation,
Memorandum Decision and Order Granting in Part and Denying in Part Plaintiffs’ Motion for
Collateral Estoppel and Partial Summary Judgment on Count One; Denying Plaintiffs’ and
Defendants’ Motions for Partial Summary Judgment on Count Five, May 23, 2017 (hereafter
“Collateral Estoppel Order”), p. 24.
Additionally, Defendants’ Evidence does not support Defendants’ statement. Defendants
cited O’Shaughnessy Decl. Ex. 233 twice, and included O’Shaughnessy Decl. Exs. 239 and 247,
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which are emails that do not contain any forecasted conversion rates. Similarly, two other
forecasts are duplicates. See O’Shaughnessy Decl. Ex. 232 (FRX-AT-01595859 “Namenda
Working Forecast LE2 090513 FINAL”) and O’Shaughnessy Decl. Ex. 237 (FRX-AT-01613386
“Namenda Working Forecast LE2 090513 FINAL”). Thus, Forest’s list of “forecasts” is
misleadingly inflated.
Finally, five of the twelve exhibits cited were prepared after the October 18, 2013 hard
switch decision and should therefore be disregarded from any analysis of conversion due to soft
switch tactics. See O’Shaughnessy Decl. Ex. 231, Berndt Report Ex. D, and see O’Shaughnessy
Decl. Ex. 234, (FRX-AT-01614825 “Namenda Working Forecast LE3 112513 BPCv2”);
O’Shaughnessy Decl. Ex. 235, (FRX-AT-01618974 “Namenda Working Forecast LE3 120513
FINAL”); O’Shaughnessy Decl. Ex. 236, (FRX-AT-03727191 “Namenda production
forecast_10292013_Flex XR LOE 120213”); O’Shaughnessy Decl. Ex. 245, (FRX-AT-
01671038 “Namenda Working Forecast LE4 FINAL 040313 FDC Scenario 2”) and
O’Shaughnessy Decl. Ex. 247 (FRX-AT-03725539 “Namenda production
forecast_10292013_Flex XR LOE”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Indeed, DPPs admit in their response that the conversion
forecasts that Dr. Berndt cites in his expert report show projected Namenda IR to Namenda XR
conversion rates under a “conventional” scenario ranging from 30% to 40%. Furthermore,
DPPs’ response merely attempts to “contextualize or dispute the relevance of the statement,” but
does not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Additionally, to the extent
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that DPPs place reliance on the Court’s collateral estoppel order, the quoted statement is not a
part of the Court’s holding, and was based on Judge Sweet’s findings in December 2014 that
could not have accounted for the effects of the injunction. In the Court’s holding, the Court
explicitly disclaimed findings on antitrust injury, causation, and damages. As the Court held, “in
order for a plaintiff to establish liability on a Sherman Act monopolization claim, it must also
prove that the defendant’s illegal conduct resulted in antitrust injury to the plaintiff,” and that
“Plaintiffs’ motion for partial summary judgment of liability on Count One is DENIED.” In re
Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist. LEXIS 83446, at *52. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
387. At least one Forest forecast modeled conversion to be in the 55% range at the 24
month mark.
Plaintiffs Admissions: Ex. 231, Berndt Rep. I ¶ 46, n. 84
Defendants’ Evidence: Ex. 249, FRX-AT-01602903; see also Ex. 250, FRX-AT-
01630867 at 0871 (“We have every reason to believe we can convert 40 or even 50
percent of Namenda IR”).
Response: Denied. O’Shaughnessy Decl. Ex. 249 is a cover email for an unattached
spreadsheet dated November 30, 2012 (over 7 months prior to the launch of Namenda XR) and
states that it includes “scenarios you requested,” which indicates it was simply an effort to model
scenarios and was not an effort to predict share. O’Shaughnessy Decl. Ex. 250 is a cover email to
what appears may be a draft launch speech from June 2013 (however it is not attached). Review
of the draft speech demonstrates that the speaker forecasted a 20-30 percent conversion rate.
Moreover, the Court has already adopted Judge Sweet’s finding that “Forest’s own
internal projections estimated that, using only soft-switch tactics, only 30% of Namenda IR
patients would voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24.
Forest’s Objection: The attached spreadsheet to O’Shaughnessy Decl. I Ex. 249 projects
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55% conversion after 24 months. See O’Shaughnessy Decl. II Ex. 393, FRX-AT-01602905.
Indeed, Dr. Berndt specifically pointed out this conversion forecast in his opening expert report.
See O’Shaughnessy Decl. I Ex. 231, Berndt Rep. I ¶ 46 n.84. DPPs also do not contest that the
draft speech states, “We have every reason to believe we can convert 40 or even 50 percent of
Namenda IR.” Additionally, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Furthermore, to the
extent that DPPs place reliance on the Court’s collateral estoppel order, the quoted statement is
not a part of the Court’s holding, and was based on Judge Sweet’s findings in December 2014
that could not have accounted for the effects of the injunction. In the Court’s holding, the Court
explicitly disclaimed findings on antitrust injury, causation, and damages. As the Court held, “in
order for a plaintiff to establish liability on a Sherman Act monopolization claim, it must also
prove that the defendant’s illegal conduct resulted in antitrust injury to the plaintiff,” and that
“Plaintiffs’ motion for partial summary judgment of liability on Count One is DENIED.” In re
Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist. LEXIS 83446, at *52. As DPPs fail
to provide any evidentiary basis to dispute the above fact, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
388. Forecasts dated after the launch of Namenda XR in June 2013 reflect a narrower
band of conversion expectations with several still predicting conversion in the 40% range at the
end of 19 months.
Plaintiffs Admissions: Ex. 231, Berndt Rep. I Ex. D.
Defendants’ Evidence: Ex. 268, FRX-AT-01642799; Ex. 232, FRX-AT-01595859; Ex.
269, FRX-AT-01592880; Ex. 270, FRX-AT-01644132; Ex. 271, FRX-AT-01616631; Ex.
272, FRX-AT-01655656; Ex. 273, FRX-AT-01617447; Ex. 274, FRX-AT-03724272; Ex.
275, FRX-AT-01618023; Ex. 276, FRX-AT-03724325; Ex. 277, FRX-AT-01639601; Ex.
278, FRX-AT-03600941; Ex. 279, FRX-AT-01639599; Ex. 280, FRX-AT-01601242; Ex.
238, FRX-AT-01639598; Ex. 239, FRX-AT-01612936; Ex. 240, FRX-AT-01612940; Ex.
233, FRX-AT-01671051; Ex. 241, FRX-AT-01608706; Ex. 242, FRX-AT-01639602; Ex.
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243, FRX-AT-00952900; Ex. 244, FRX-AT-03769058; Ex. 247, FRX-AT-03725539; Ex.
251, FRX-AT-01656854; Ex. 252, FRX-AT-01619281; Ex. 253, FRX-AT-01639600; Ex.
254, FRX-AT-01614824; Ex. 255, FRX-AT-01813893; Ex. 256, FRX-AT-01655251; Ex.
234, FRX-AT-01614825; Ex. 257, FRX-AT-01613917; Ex. 235, FRX-AT-01618974; Ex.
236, FRX-AT-03727191; Ex. 258, FRX-AT-01611806; Ex. 259, FRX-AT-03727529; Ex.
118 237, FRX-AT-01613386; Ex. 281, FRX-AT-01639171; Ex. 260, FRX-AT-
03793457; Ex. 261, FRX-AT-03727794; Ex. 262, FRX-AT-03727831; Ex. 263, FRX-
AT-03729066; Ex. 264, FRX-AT-03731393; Ex. 265, FRX-AT-03732732; Ex. 266,
FRX-AT-03734393; Ex. 248, FRX-AT-01752159.
Response: Denied. The vast majority of Forest’s forecasts prior to October 18, 2013,
when Forest had determined it would do a “hard switch” and would withdraw Namenda IR,
forecasted a 30% peak conversion rate. See O’Shaughnessy Decl. Ex. 231, Berndt Report Ex. D;
see also O’Shaughnessy Decl. Ex. 292, FRX-AT-01731312 (On October 18, 2013, Forest’s Gary
Simorski emailed the following: “Dear All, Forest has made the decision to discontinue sales of
Namenda IR and transition all patients to Namenda XR.”); Judge Sweet found exactly that: “On
October 18, 2013, a Forest executive emailed his colleagues, announcing the decision to
withdraw Namenda from the market.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Opinion, ¶
75.
Moreover, the Court has already adopted Judge Sweet’s finding that “Forest’s own
internal projections estimated that, using only soft-switch tactics, only 30% of Namenda IR
patients would voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24.
Several of the cited forecasts do not “predict[] conversion in the 40% range at the end of
19 months.” Eight forecasts predict 30% conversion at 19 months. See O’Shaughnessy Decl. Ex.
271 (FRX-AT-01616631 Namenda forecast_092713); 272 (FRX-AT-01655656 Namenda
forecast_093013); O’Shaughnessy Decl. Ex. 273 (FRX-AT-01617447 Namenda
forecast_093013 ef2); O’Shaughnessy Decl. Ex. 274 (FRX-AT-03724272 Namenda
forecast_100313); O’Shaughnessy Decl. Ex. 275 (FRX-AT-01618023 Namenda production
forecast_10032013); O’Shaughnessy Decl. Ex. 276 (FRX-AT-03724325 Namenda production
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forecast_10042013); O’Shaughnessy Decl. Ex. 277 (FRX-AT-01639601 Namenda production
forecast_10072013 v2); and O’Shaughnessy Decl. Ex. 279 (FRX-AT-01639599 Namenda
production forecast_10082013 v3). Two forecasts project 40% conversion in just the long-term
care sector at 24 months. O’Shaughnessy Decl. Ex. 268 (FRX-AT-01642799 Namenda
forecast_090613); and O’Shaughnessy Decl. Ex. 269 (FRX-AT-01592880 Namenda
forecast_091113).
Two sets of forecasts from October 8, 2013 appear to be exact duplicates. O’Shaughnessy
Decl. Ex. 279 (FRX-AT-01639599 Namenda production forecast_10082013 v3) and
O’Shaughnessy Decl. Ex. 280 (FRX-AT-01601242 Namenda production forecast_10082013 v3);
O’Shaughnessy Decl. Ex. 240 (FRX-AT-01612940 Namenda production forecast_10082013 v3
LOE Apr18) and O’Shaughnessy Decl. Ex. 242 (FRX-AT-01639602 Namenda production
forecast_10082013 v3 LOE Apr18). Seven forecasts from October 15, 2013 project 40%
conversion but appear to be identical. See O’Shaughnessy Decl. Ex. 241 (FRX-AT-01608706
“Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 243
(FRX-AT-00952900 “Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy
Decl. Ex. 244 (FRX-AT-03769058 “Namenda production forecast_10152013_Flex XR LOE”);
O’Shaughnessy Decl. Ex. 251 (FRX-AT-01656854 “Namenda production
forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 252 (FRX-AT-01619281
“Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 253
(FRX-AT-01639600 “Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy
Decl. Ex. 265 (FRX-AT-03732732 Namenda production forecast_10152013_Flex XR LOE).
Five of the purported “forecasts” are emails that do not contain any discussion of
conversion rates. O’Shaughnessy Decl. Ex. 268 (September 7, 2013 email from Lei Meng to Bill
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Meury); O’Shaughnessy Decl. Ex. 270 (September 23, 2013 email from Lei Meng to Bill
Meury); O’Shaughnessy Decl. Ex. 278 (October 9, 2013 email from Elizabeth Fung to Bill
Meury and others); O’Shaughnessy Decl. Ex. 239 (October 14, 2013 email from Elizabeth Fung
to Lei Meng); and O’Shaughnessy Decl. Ex. 247 (October 29, 2013 email from Lei Meng to
Elizabeth Fung).
Finally, sixteen of the forecasts were created on or after October 29, 2013 and include
numerous duplicates. As Dr. Berndt concluded, such post-October 18, 2013 analyses are tainted
by the hard switch decision. Litvin Decl. Ex. 438, Berndt Dep. at 100:2-15. See O’Shaughnessy
Decl. Ex. 254 (FRX-AT-01614824 Namenda production forecast_10292013_Flex XR LOE
112513); O’Shaughnessy Decl. Ex. 255 (FRX-AT-01813893 Namenda production
forecast_10292013_Flex XR LOE 112513MAX); O’Shaughnessy Decl. Ex. 256 (FRX-AT-
01655251 Copy of Namenda production forecast_10292013_Flex XR LOE 112513_2014);
O’Shaughnessy Decl. Ex. 234 (FRX-AT-01614825 Namenda Working Forecast LE3 112513
BPCv2); O’Shaughnessy Decl. Ex. 257 (FRX-AT-01613917 Namenda production
forecast_10292013_Flex XR LOE 120213); O’Shaughnessy Decl. Ex. 235 (FRX-AT-01618974
Namenda Working Forecast LE3 120513 FINAL); O’Shaughnessy Decl. Ex. 236 (FRX-
AT-03727191 Namenda production forecast_10292013_Flex XR LOE 120213); O’Shaughnessy
Decl. Ex. 258 (FRX-AT-01611806 Namenda production forecast_10292013_Flex XR LOE
120213); O’Shaughnessy Decl. Ex. 259 (FRX-AT-03727529 Namenda production
forecast_10292013_Flex XR LOE 120213 July); O’Shaughnessy Decl. Ex. 281 (FRX-AT-
01639171 Namenda production forecast_10292013_Flex XR LOE 120213 July Carolyn);
O’Shaughnessy Decl. Ex. 260 (FRX-AT-03793457 Copy of Namenda production
forecast_10292013_Flex XR LOE 112513); O’Shaughnessy Decl. Ex. 261 (FRX-AT-03727794
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Namenda production forecast_10292013_Flex XR LOE 120213 SepMAX); O’Shaughnessy
Decl. Ex. 262 (FRX-AT-03727831 Namenda production forecast_10292013_Flex XR LOE
120213 SepLOW); O’Shaughnessy Decl. Ex. 263 (FRX-AT-03729066 Namenda production
forecast_10292013_Flex XR LOE 12914); O’Shaughnessy Decl. Ex. 264 (FRX-AT-03731393
Namenda production forecast_10292013_Flex XR LOE 120213 disrup10); and O’Shaughnessy
Decl. Ex. 266 (FRX-AT-03734393 Namenda production forecast_10292013_Flex XR LOE
040414 disrup9).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Indeed, DPPs’ response concedes that they summarily dismiss
certain forecasts created after October 18, 2013 based on their unsupported conclusion that those
forecasts are “tainted by the hard switch decision.” As an initial matter, the decision to announce
the hard switch was not made on October 18, 2013, but rather, was made by Brent Saunders on
February 14, 2014, as set forth in Forest’s reply to DPPs’ response to ¶ 403, infra. DPPs
expressly admit “that the hard switch started with Forest’s withdrawal announcement” (i.e.,
February 14, 2014). See DRPAF ¶ 393. Even if it were possible for the decision to announce
the hard switch to “taint” any forecasts, such a taint would only affect the “Withdrawal” scenario
in the forecast, and not the “Conventional” scenario which forecasted the soft-switch rate.
Furthermore, the fact that DPPs chose to disregard post-October 18, 2013 forecasts only
underscores the existence of those forecasts, and DPPs provide no basis to dispute the fact, as
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asserted above.
DPPs’ suggestion that some forecasts are duplicative is beside the point. Several unique,
and non-duplicative, forecasts estimating the soft-switch rate in the 40% range are presently in
the summary judgment record. See, e.g., O’Shaughnessy Decl. I Exs. 236, FRX-AT-03727191,
244, FRX-AT-03769058, 254, FRX-AT-01614824, 259, FRX-AT-03727529, O’Shaughnessy
Decl. II Ex. 411, FRX-AT-03725540.
Additionally, to the extent that DPPs place reliance on the Court’s collateral estoppel
order, the quoted statement is not a part of the Court’s holding, and was based on Judge Sweet’s
findings in December 2014 that could not have accounted for the effects of the injunction. In the
Court’s holding, the Court explicitly disclaimed findings on antitrust injury, causation, and
damages. As the Court held, “in order for a plaintiff to establish liability on a Sherman Act
monopolization claim, it must also prove that the defendant’s illegal conduct resulted in antitrust
injury to the plaintiff,” and that “Plaintiffs’ motion for partial summary judgment of liability on
Count One is DENIED.” In re Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist.
LEXIS 83446, at *52. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
389. By October 10, 2013, with Forest having three months of actual data on
conversions post-launch, those forecasts began to land consistently in the range of 40%
conversion at the end of approximately 19 months.
Defendants’ Evidence: Ex. 238, FRX-AT-01639598; Ex. 239, FRX-AT-01612936; Ex.
240,FRX-AT-01612940; Ex. 233, FRX-AT-01671051; Ex. 241, FRX-AT-01608706; Ex.
242, FRX-AT-01639602; Ex. 243, FRX-AT-00952900; Ex. 244, FRX-AT-03769058; Ex.
247, FRX-AT-03725539; Ex. 251, FRX-AT-01656854; Ex. 252, FRX-AT-01619281; Ex.
253, FRX-AT-01639600; Ex. 254, FRX-AT-01614824; Ex. 255, FRX-AT-01813893; Ex.
256, FRX-AT-01655251; Ex. 234, FRX-AT-01614825; Ex. 257, FRX-AT-01613917; Ex.
235, FRX-AT-01618974; Ex. 236, FRX-AT-03727191; Ex. 258, FRX-AT-01611806; Ex.
259, FRX-AT-03727529; Ex. 237, FRX-AT-01613386; Ex. 281, FRX-AT-01639171; Ex.
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260, FRX-AT-03793457; Ex. 261, FRX-AT-03727794; Ex. 262, FRX-AT-03727831; Ex.
263, FRX-AT-03729066; Ex. 264, FRX-AT-03731393; Ex. 265, FRX-AT-03732732; Ex.
266, FRX-AT-03734393; Ex. 248, FRX-AT-01752159.
Response: Denied. The vast majority of Forest’s forecasts prior to October 18, 2013,
when Forest had determined it would do a “hard switch” and would withdraw Namenda IR,
forecasted a 30% peak conversion rate. See O’Shaughnessy Decl. Ex. 231, Berndt Report Ex. D;
see also O’Shaughnessy Decl. Ex. 292, FRX-AT-01731312 (On October 18, 2013, Forest’s Gary
Simorski emailed the following: “Dear All, Forest has made the decision to discontinue sales of
Namenda IR and transition all patients to Namenda XR.”); Judge Sweet found exactly that: “On
October 18, 2013, a Forest executive emailed his colleagues, announcing the decision to
withdraw Namenda from the market.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Opinion, ¶
75.
Moreover, the Court has already adopted Judge Sweet’s finding that “Forest’s own
internal projections estimated that, using only soft-switch tactics, only 30% of Namenda IR
patients would voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24.
Additionally, several forecasts project 40%, but appear to be exact duplicates, or were
created on or after October 29, 2013, making them tainted by the hard switch decision. Litvin
Decl. Ex. 438, Berndt Dep. at 100:2-15. See Response to ¶ 388.
Forest claims that its October forecasts, only some of which projected 40% XR
conversion, should be given greater weight than the many earlier forecasts projecting 30%
conversion because the later forecasts were based on several months of “actual conversions post-
launch.” Defendants’ Statement of Undisputed Material Facts at ¶ 389. However, the additional
sales data that Forest claims caused the company to have raised its expectations surrounding
conversion actually demonstrates the opposite, as actual conversion rates were lower in the Fall
of 2013 than Forest had forecasted. See O’Shaughnessy Decl. Ex. 201, FRX-AT-01775242-43
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(December 2013 memo complaining that “a telltale indicator of total prescriptions is new
prescriptions, and the trend for new prescriptions over the past few weeks is starting to slow and
flatten. This is concerning.”); Litvin Decl. Ex. 107, FRX-AT-01806018 (October 30, 2013 email
from David Okimoto of Forest to a colleague regarding the “Namenda conversion,” noting that
Forest’s market research department was “concerned that XR business [was] not picking up as
much as expected in [long-term care].”); Litvin Decl. Ex. 171, FRX-AT-03860760 (September
2013 internal memorandum from the Namenda Brand Team to Namenda XR representatives
warning that “Over the past few weeks, Namenda XR conversion is on the upturn but we need to
accelerate our efforts in order to meet our FY14 goal of 20%.”). Dr. Berndt noted this in his
report, “[a]s of October 30, 2013, several months after launch, the market research department
was ‘concerned that [the] XR business is not picking up as much as expected in LTC.’”
O’Shaughnessy Decl. Ex. 231, Berndt Report at ¶ 52. As the actual data showed that XR
conversion was stagnant or even lagging, provides no reasonably justification for raising
projections from 30% to 40%, and Forest’s internal discussions reflected that even into
December, Forest was still anticipating the soft switch would be around 30%. Litvin Decl. Ex.
152, FRX-AT-03726753-61 at ’54 (December 2013 powerpoint entitled “Namenda Transition”
reported the “conversion rate is at 15% but on track to reach 20-30%.”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
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Indeed, DPPs’ response concedes that they summarily dismiss certain forecasts created
after October 18, 2013 based on their unsupported conclusion that those forecasts are “tainted by
the hard switch decision.” As an initial matter, the decision to announce the hard switch was not
made on October 18, 2013, but rather, was made by Brent Saunders on February 14, 2014, as set
forth in Forest’s reply to DPPs’ response to ¶ 403, infra. DPPs expressly admit “that the hard
switch started with Forest’s withdrawal announcement” (i.e., February 14, 2014). See DRPAF ¶
393. Even if it were possible for the decision to announce the hard switch to “taint” any
forecasts, such a taint would only affect the “Withdrawal” scenario in the forecast, and not the
“Conventional” scenario which forecasted the soft-switch rate. Furthermore, the fact that DPPs
chose to disregard post-October 18, 2013 forecasts only underscores the existence of those
forecasts, and DPPs provide no basis to dispute the fact, as asserted above.
DPPs’ suggestion that some forecasts are duplicative is beside the point. Several unique,
and non-duplicative, forecasts estimating the soft-switch rate in the 40% range are presently in
the summary judgment record. See, e.g., O’Shaughnessy Decl. I Exs. 236, FRX-AT-03727191,
244, FRX-AT-03769058, 254 FRX-AT-01614824, 259 FRX-AT-03727529, O’Shaughnessy
Decl. II Ex. 411, FRX-AT-03725540.
Additionally, to the extent that DPPs place reliance on the Court’s collateral estoppel
order, the quoted statement is not a part of the Court’s holding, and was based on Judge Sweet’s
findings in December 2014 that could not have accounted for the effects of the injunction. In the
Court’s holding, the Court explicitly disclaimed findings on antitrust injury, causation, and
damages. As the Court held, “in order for a plaintiff to establish liability on a Sherman Act
monopolization claim, it must also prove that the defendant’s illegal conduct resulted in antitrust
injury to the plaintiff,” and that “Plaintiffs’ motion for partial summary judgment of liability on
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392
Count One is DENIED.” In re Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist.
LEXIS 83446, at *52. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
390. Senior Forest officials discussed PowerPoint slides around mid-October 2013 that
projected Forest’s soft switch marketing efforts alone would convert 40% of the memantine
market to Namenda XR by the launch of generic Namenda IR, and additional information, such
as the results of a survey of caregivers, was factored into Forest’s forecasts.
Defendants’ Evidence: Ex. 282, FRX-AT-04199437 (Meury explaining to members of
his team that the Namenda Transition Plan, which estimated conversion at 40% was
“what we reviewed today with [Frank Perrier, Forest’s CFO] and [Brent Saunders,
Forest’s CEO]; Ex. 371, FRX-AT-01859720 (“Namenda Franchise: MD and caregiver
response to XR is above expectations; Conversion projected to 30%-40%); see also Ex.
283, FRX-AT-03724953 (email to Lei Meng. Forest’s director of Global Commercial
Assessments, that “the latest” model of Forest’s “Namenda Production Forecast” predicts
40% conversion under the conventional scenario); Ex. 372, FRX-AT-01593023 (email
dated October 10, between Liz Fung and Bill Meury stating that “[in] the Five-Year Plan
we have [Namenda XR conversion under the soft switch] going up to 40%”).
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Forest failed to provide to the Court with a
copy of the powerpoint attached to the cited email, O’Shaughnessy Decl. Ex. 282, FRX-AT-
04199437, which was labeled as “NamendaTransitionPlan2.ppt,” which is called the “Namenda
IR & XR Conversion Plan, October 2013.” It is included here, and it states very prominently,
“Namenda conversion rate is currently at 17% and projected to reach 33% or higher.” See Litvin
Decl. Ex. 467, FRX-AT-04199438 at 447. Thus, Mr. Meury was not discussing a 40%
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393
conversion rate, but was discussing a 33% rate. O’Shaughnessy Decl. Ex. 371, FRX-AT-
01859720 is an undated document with no authorship or any indication of whether it was even
circulated within Forest and merely states “conversion projected to be 30%-40%.” Forest failed
to include the attachment to the email in O’Shaughnessy Decl. Ex. 283, FRX-AT-03724953.
O’Shaughnessy Decl. Ex. 372, FRX-AT-01593023 provides no support for the assertion as it is
referring to a situation “with the XR LOE in Apr18” [April 2018], which is three years later than
actual LOE (Loss of Exclusivity).
Moreover, the Court has already adopted Judge Sweet’s finding that “Forest’s own
internal projections estimated that, using only soft-switch tactics, only 30% of Namenda IR
patients would voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24.
Forest’s Objection: DPPs’ response ignores slides 24 and 26 which state “XR share by
January 2015 LOE in Conventional Scenario = 40%.” Litvin Decl. Ex. 467, FRX-AT-04199438
at 9461, 9463. Additionally, the parent email to O’Shaughnessy Decl. I Ex. 371 shows that Ex.
371 was created on or around October 15, 2013. O’Shaughnessy Decl. II Ex. 394, FRX-AT-
01859719. DPPs dispute that O’Shaughnessy Decl. I Ex. 372 supports the assertion, arguing that
the situation “with the XR LOE in Apr18” is “three years later than actual LOE (Loss of
Exclusivity)” and presumably that Ex. 372 is incorrect or does not apply. DPPs misread the
document. Namenda IR lost exclusivity in July 2015, but Namenda XR was not forecasted to
lose exclusivity in this document until April 2018. DPPs’ misreading of the document does not
contradict the fact as asserted.
In addition, as set forth in Forest’s replies to DPPs’ responses to ¶¶ 388 and 389 above,
by mid-October, Forest’s forecasts of average soft-switch rates were consistently landing at 40%,
and DPPs simply chose to disregard extant and relevant forecasts.
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Moreover, to the extent that DPPs place reliance on the Court’s collateral estoppel
order, the quoted statement is not a part of the Court’s holding, and was based on Judge Sweet’s
findings in December 2014 that could not have accounted for the effects of the injunction. In the
Court’s holding, the Court explicitly disclaimed findings on antitrust injury, causation, and
damages. As the Court held, “in order for a plaintiff to establish liability on a Sherman Act
monopolization claim, it must also prove that the defendant’s illegal conduct resulted in antitrust
injury to the plaintiff,” and that “Plaintiffs’ motion for partial summary judgment of liability on
Count One is DENIED.” In re Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist.
LEXIS 83446, at *52. Accordingly, since the fact is not disputed, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
391. In the New York Attorney General action, the Court accepted an econometric
model constructed by NYAG’s economist, Ernst Berndt, the same economist DPPs use here,
based on Forest’s own conventional withdrawal forecasts; that model projected Forest’s branded
memantine products to constitute 40% of the memantine market under a conventional scenario.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶ 139.
Defendants’ Evidence: Ex. 284, FRX-AT-01784112.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 280:24-281:13 (citing Ex. 285, FRX-AT-
01736051, and referring to Ex. 286, FRX-AT-01657151 as “[a] model [which] appears
repeatedly in various forms in the Forest documents, and one can reasonably select the
version of the model that was prepared in approximately November 2013, close in time to
(i) the date of the amended IR and XR conversion plan presentation October 2013; and
(ii) a board presentation of December 2013 as a sensible indicator of Forest’s views.”).
Response: Denied. Professor Berndt did not adopt or use the projected conversion as
described by Forest in his testimony in the NY Attorney General action. See Berndt Amended
Reply at ¶ 12 (Professor Berndt explaining his reference to O’Shaughnessy Decl. Ex. 286, noting
that in determining whether there would be injury from the challenged conduct this forecast was
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sufficient to demonstrate there would be). Moreover, the Court and Judge Sweet did not accept
or adopt the 40% conversion rate reflected in O’Shaughnessy Decl. Ex. 286 that was an exhibit
in the N.Y.A.G. Action, and instead the Court adopted Judge Sweet’s finding that “Forest’s own
internal projections estimated that, using only soft-switch tactics, only 30% of Namenda IR
patients would voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Additionally, to the
extent that DPPs place reliance on the Court’s collateral estoppel order, the quoted statement is
not a part of the Court’s holding, and was based on Judge Sweet’s findings in December 2014
that could not have accounted for the effects of the injunction. In the Court’s holding, the Court
explicitly disclaimed findings on antitrust injury, causation, and damages. As the Court held, “in
order for a plaintiff to establish liability on a Sherman Act monopolization claim, it must also
prove that the defendant’s illegal conduct resulted in antitrust injury to the plaintiff,” and that
“Plaintiffs’ motion for partial summary judgment of liability on Count One is DENIED.” In re
Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist. LEXIS 83446, at *52. Accordingly,
the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
E. Actual Conversion Rates
392. Based on the sales data compiled by Plaintiffs’ expert, Dr. Russell Lamb, and
derived from third-party vendors, Forest’s actual sales data were similar to higher-end forecast
estimates presented and compiled by Forest personnel.
Defendants’ Evidence: Ex. 287, Cremieux Rep. ¶ 50, Fig. 1 (reflecting the results of
produced backup data for Plaintiffs’ expert Dr. Russell Lamb constructed with IMS NPA
data and Forest’s internal transaction data).
Plaintiffs’ Admissions: Ex. 56, Lamb Rep. II ¶ 98, Fig. 4.
Response: Denied. The vast majority of Forest’s forecasts prior to October 18, 2013,
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when Forest had determined it would do a “hard switch” and would withdraw Namenda IR,
forecasted a 30% peak conversion rate. See O’Shaughnessy Decl. Ex. 231, Berndt Report Ex. D;
see also O’Shaughnessy Decl. Ex. 292, FRX-AT-01731312 (On October 18, 2013, Forest’s Gary
Simorski emailed the following: “Dear All, Forest has made the decision to discontinue sales of
Namenda IR and transition all patients to Namenda XR.”); Judge Sweet found exactly that, “On
October 18, 2013, a Forest executive emailed his colleagues, announcing the decision to
withdraw Namenda from the market.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Opinion, ¶
75. Moreover, the Court adopted Judge Sweet’s finding that “Forest’s own internal projections
estimated that, using only soft-switch tactics, only 30% of Namenda IR patients would
voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24. As reflected in the expert
reports of Dr. Lamb and Professor Berndt, the actual conversion rates were impacted by the
discontinuation announcement and months-long campaign to communicate and publicize the
discontinuation decision, and were not ameliorated by the injunction given Forest’s continued
public references to its appeal. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 52-68;
O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 9-33; O’Shaughnessy Decl. Ex. 193, Lamb
Report ¶¶ 89-118; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 37-55, 60-100.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25.
Additionally, to the extent that DPPs place reliance on the Court’s collateral estoppel
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order, the quoted statement is not a part of the Court’s holding, and was based on Judge Sweet’s
findings in December 2014 that could not have accounted for the effects of the injunction. In the
Court’s holding, the Court explicitly disclaimed findings on antitrust injury, causation, and
damages. As the Court held, “in order for a plaintiff to establish liability on a Sherman Act
monopolization claim, it must also prove that the defendant’s illegal conduct resulted in antitrust
injury to the plaintiff,” and that “Plaintiffs’ motion for partial summary judgment of liability on
Count One is DENIED.” In re Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist.
LEXIS 83446, at *52.
Forest also objects because the issue of when the hard switch began has already been
decided. Indeed, DPPs expressly admit that the “Court has already determined that . . . the hard
switch started with Forest’s withdrawal announcement” (e.g., February 14, 2014). See DRPAF ¶
393.
Forest also objects that the ipse dixit of DPPs’ purported experts Dr. Lamb and Prof.
Berndt about conversion rates being impacted by the announcement is inadmissible for the
reasons explained in Forest’s Daubert motions. See, e.g., Mem. of Law in Supp. of Forest’s
Mot. to Exclude Certain Opinions and Proposed Testimony of Dr. Russell Lamb, dated
November 17, 2017; Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony
of Dr. Ernst Berndt and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017.
DPPs’ experts have made no efforts to isolate the effect (if any) of the announcement on
conversion. Conclusory expert testimony untethered to the evidence cannot create a genuine
issue of fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d
Cir. 1997) (“[A]n expert’s report is not a talisman against summary judgment.”); Virgin Atl.
Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that
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“expert testimony without a factual foundation cannot defeat a motion for summary judgment”),
aff’d 257 F.3d 256 (2d Cir. 2001). Accordingly, the fact should be deemed admitted. Fed. R.
Civ. P. 56(e)(2).
393. Using Namenda XR’s percent of supply of the memantine market as a measure of
“conversion rate,” Dr. Lamb’s review of Forest’s sales transaction data and Dr. Fowdur’s review
of total days of therapy prescriptions reflects in the following figure.
Defendants’ Evidence: Ex. 287, Cremieux Rep. ¶ 50, Fig. 1 (reflecting the results of
produced backup data for Plaintiffs’ expert Dr. Russell Lamb); Ex. 54, Fowdur Rep. Fig.
B.
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. ¶ 98, Fig. 4.
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Response: Admitted in part, denied in part. Admitted that the charts appear in the
referenced expert reports. Denied to the extent Forest is implying that there are three different
periods that require separate analysis. As explained by Professor Berndt and Dr. Lamb, the Hard
Switch campaign impacted the market starting prior to the February 14, 2014 announcement and
continued to impact the market well past the entry of the injunction and through generic launch
in July 2015. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 52-68; O’Shaughnessy Decl.
Ex. 55, Berndt Reply Report ¶¶ 9-33; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 89-118;
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 37-55, 60-100.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Forest also objects that the ipse dixit of DPPs’ purported experts Dr. Lamb
and Prof. Berndt about conversion rates being impacted by the announcement is inadmissible for
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the reasons explained in Forest’s Daubert motions. See, e.g., Mem. of Law in Supp. of Forest’s
Mot. to Exclude Certain Opinions and Proposed Testimony of Dr. Russell Lamb, dated Nov. 17,
2017; Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of Dr. Ernst
Berndt and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017. DPPs’ experts
have made no efforts to isolate the effect (if any) of the announcement on conversion.
Conclusory expert testimony untethered to the evidence cannot create a genuine issue of fact
sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997)
(“[A]n expert’s report is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v.
British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony
without a factual foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256
(2d Cir. 2001). Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
394. In June 2014, 12 months after Namenda XR’s launch in June 2013, Namenda
XR’s share of the memantine market in the actual world based on NSP data rose to
approximately 36%.
Defendants’ Evidence: Ex. 287 Cremieux Rep. ¶ 50, Fig. 1 (reflecting the results of
produced backup data for Plaintiffs’ expert Dr. Russell Lamb); see also Ex. 54, Fowdur
Rep. Fig. B (reflecting roughly 36% conversion based on average of weekly NPA data).
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. ¶ 98, Fig. 4.
Response: Admitted in part, denied in part. Admitted that the cited documents reflect
an approximate share of 36% in June 2014. Denied to the extent that there is an implication that
this share would have been obtained absent the Hard Switch campaign. See O’Shaughnessy
Decl. Ex. 231, Berndt Report ¶¶ 52-68; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 9-
33; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 89-118; O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶¶ 37-55, 60-100.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
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statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
395. In December 2014, 18 months after the Namenda XR’s launch in June 2013,
Namenda XR’s share of the memantine market in the actual world based on NSP data fell to
approximately 34%.
Defendants’ Evidence: Ex. 287, Cremieux Rep. ¶ 50, Fig. 1 (reflecting the results of
produced backup data for Plaintiffs’ expert Dr. Russell Lamb); see also Ex. 54, Fowdur
Rep. Fig. B (reflecting roughly 36% conversion based on NPA data).
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. ¶ 98, Fig. 4.
Response: Admitted in part, denied in part. Admitted that the cited documents reflect
an approximate share of 34% in December 2014. Denied to the extent that there is an implication
that this share would have been obtained absent the Hard Switch campaign. See O’Shaughnessy
Decl. Ex. 231, Berndt Report ¶¶ 52-68; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶
9-33; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 89-118; O’Shaughnessy Decl. Ex. 56,
Lamb Reply Report ¶¶ 37-55, 60-100.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
396. Multiple forecasts compiled by Forest (particularly those compiled with roughly 3
months of patient data) predicted that Namenda conversion at 18 months would fall within the
range of 30-40%.
Defendant’s Documents: Ex. 238, FRX-AT-01639598; Ex. 239, FRX-AT-01612936; Ex.
240, FRX-AT-01612940; Ex. 233, FRX-AT-01671051; Ex. 241, FRX-AT-01608706; Ex.
242, FRX-AT-01639602; Ex. 243, FRX-AT-00952900; Ex. 244, FRX-AT-03769058; Ex.
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247, FRX-AT-03725539; Ex. 251, FRX-AT-01656854; Ex. 252, FRX-AT-01619281; Ex.
253, FRX-AT-01639600; Ex. 254, FRX-AT-01614824; Ex. 255, FRX-AT-01813893; Ex.
256, FRX-AT-01655251; Ex. 234, FRX-AT-01614825; Ex. 257, FRX-AT-01613917; Ex.
235, FRX-AT-01618974; Ex. 236, FRX-AT-03727191; Ex. 258, FRX-AT-01611806; Ex.
259, FRX-AT-03727529; Ex. 237, FRX-AT-01613386; Ex. 281, FRX-AT-01639171; Ex.
260, FRX-AT-03793457; Ex. 261, FRX-AT-03727794; Ex. 262, FRX-AT-03727831; Ex.
263, FRX-AT-03729066; Ex. 264, FRX-AT-03731393; Ex. 265, FRX-AT-03732732; Ex.
266, FRX-AT-03734393; Ex. 248, FRX-AT-01752159.
Response: Denied. The vast majority of Forest’s forecasts prior to October 18, 2013,
when Forest had determined it would do a “hard switch” and would withdraw Namenda IR,
forecasted a 30% peak conversion rate. See O’Shaughnessy Decl. Ex. 231, Berndt Report Ex. D;
see also O’Shaughnessy Decl. Ex. 292, FRX-AT-01731312 (On October 18, 2013, Forest’s Gary
Simorski emailed the following: “Dear All, Forest has made the decision to discontinue sales of
Namenda IR and transition all patients to Namenda XR.”); Judge Sweet found exactly that: “On
October 18, 2013, a Forest executive emailed his colleagues, announcing the decision to
withdraw Namenda from the market.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Opinion, ¶
75.
Moreover, the Court has already adopted Judge Sweet’s finding that “Forest’s own
internal projections estimated that, using only soft-switch tactics, only 30% of Namenda IR
patients would voluntarily switch to Namenda XR.” Collateral Estoppel Order, p. 24.
Two forecasts from October 8, 2013 appear to be exact duplicates. O’Shaughnessy Decl.
Ex. 240 (FRX-AT-01612940 Namenda production forecast_10082013 v3 LOE Apr18) and
O’Shaughnessy Decl. Ex. 242 (FRX-AT-01639602 Namenda production forecast_10082013 v3
LOE Apr18). Additionally, seven forecasts from October 15, 2013 appear to be identical. See
O’Shaughnessy Decl. Ex. 241 (FRX-AT-01608706 “Namenda production
forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 243 (FRX-AT-00952900
“Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 244
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403
(FRX-AT-03769058 “Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy
Decl. Ex. 251 (FRX-AT-01656854 “Namenda production forecast_10152013_Flex XR LOE”);
O’Shaughnessy Decl. Ex. 252 (FRX-AT-01619281 “Namenda production
forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 253 (FRX-AT-01639600
“Namenda production forecast_10152013_Flex XR LOE”); O’Shaughnessy Decl. Ex. 265
(FRX-AT-03732732 Namenda production forecast_10152013_Flex XR LOE).
Two of the purported “forecasts” are emails that do not contain any discussion of
conversion rates. O’Shaughnessy Decl. Ex. 239 (October 14, 2013 email from Elizabeth Fung to
Lei Meng); and O’Shaughnessy Decl. Ex. 247 (October 29, 2013 email from Lei Meng to
Elizabeth Fung).
Finally, sixteen of the forecasts were created on or after October 29, 2013 and include
numerous duplicates. As Dr. Berndt concluded, such post-October 18, 2013 analyses are tainted
by the hard switch decision. Litvin Decl. Ex. 438, Berndt Dep. at 100:2-15. See O’Shaughnessy
Decl. Ex. 254 (FRX-AT-01614824 Namenda production forecast_10292013_Flex XR LOE
112513); O’Shaughnessy Decl. Ex. 255 (FRX-AT-01813893 Namenda production
forecast_10292013_Flex XR LOE 112513MAX); O’Shaughnessy Decl. Ex. 256 (FRX-AT-
01655251 Copy of Namenda production forecast_10292013_Flex XR LOE 112513_2014);
O’Shaughnessy Decl. Ex. 234 (FRX-AT-01614825 Namenda Working Forecast LE3 112513
BPCv2); O’Shaughnessy Decl. Ex. 257 (FRX-AT-01613917 Namenda production
forecast_10292013_Flex XR LOE 120213); O’Shaughnessy Decl. Ex. 235 (FRX-AT-01618974
Namenda Working Forecast LE3 120513 FINAL); O’Shaughnessy Decl. Ex. 236 (FRX-
AT-03727191 Namenda production forecast_10292013_Flex XR LOE 120213); O’Shaughnessy
Decl. Ex. 258 (FRX-AT-01611806 Namenda production forecast_10292013_Flex XR LOE
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120213); O’Shaughnessy Decl. Ex. 259 (FRX-AT-03727529 Namenda production
forecast_10292013_Flex XR LOE 120213 July); O’Shaughnessy Decl. Ex. 281 (FRX-AT-
01639171 Namenda production forecast_10292013_Flex XR LOE 120213 July Carolyn);
O’Shaughnessy Decl. Ex. 260 (FRX-AT-03793457 Copy of Namenda production
forecast_10292013_Flex XR LOE 112513); O’Shaughnessy Decl. Ex. 261 (FRX-AT-03727794
Namenda production forecast_10292013_Flex XR LOE 120213 SepMAX); O’Shaughnessy
Decl. Ex. 262 (FRX-AT-03727831 Namenda production forecast_10292013_Flex XR LOE
120213 SepLOW); O’Shaughnessy Decl. Ex. 263 (FRX-AT-03729066 Namenda production
forecast_10292013_Flex XR LOE 12914); O’Shaughnessy Decl. Ex. 264 (FRX-AT-03731393
Namenda production forecast_10292013_Flex XR LOE 120213 disrup10); and O’Shaughnessy
Decl. Ex. 266 (FRX-AT-03734393 Namenda production forecast_10292013_Flex XR LOE
040414 disrup9).
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25.
Indeed, DPPs’ response concedes that they summarily dismiss certain forecasts created
after October 18, 2013 based on their unsupported conclusion that those forecasts are “tainted by
the hard switch decision.” As an initial matter, the decision to announce the hard switch was not
made on October 18, 2013, but rather, was made by Brent Saunders on February 14, 2014, as set
forth in Forest’s reply to DPPs’ response to ¶ 403, infra. DPPs expressly admit “that the hard
switch started with Forest’s withdrawal announcement” (i.e., February 14, 2014). See DRPAF ¶
393. Even if it were possible for the decision to announce the hard switch to “taint” any
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forecasts, such a taint would only affect the “Withdrawal” scenario in the forecast, and not the
“Conventional” scenario which forecasted the soft-switch rate. Furthermore, the fact that DPPs
chose to disregard post-October 18, 2013 forecasts only underscores the existence of those
forecasts, and DPPs provide no basis to dispute the fact, as asserted above.
DPPs’ suggestion that some forecasts are duplicative is beside the point. Several unique,
and non-duplicative, forecasts estimating the soft-switch rate in the 40% range are presently in
the summary judgment record. See, e.g., O’Shaughnessy Decl. I Exs. 236, FRX-AT-03727191,
244, FRX-AT-03769058, 254 FRX-AT-01614824, 259 FRX-AT-03727529, O’Shaughnessy
Decl. II Ex. 411, FRX-AT-03725540.
Additionally, to the extent that DPPs place reliance on the Court’s collateral estoppel
order, the quoted statement is not a part of the Court’s holding, and was based on Judge Sweet’s
findings in December 2014 that could not have accounted for the effects of the injunction. In the
Court’s holding, the Court explicitly disclaimed findings on antitrust injury, causation, and
damages. As the Court held, “in order for a plaintiff to establish liability on a Sherman Act
monopolization claim, it must also prove that the defendant’s illegal conduct resulted in antitrust
injury to the plaintiff,” and that “Plaintiffs’ motion for partial summary judgment of liability on
Count One is DENIED.” In re Namenda Direct Purchaser Antitrust Litig., 2017 U.S. Dist.
LEXIS 83446, at *52. Moreover, Dr. Berndt’s ipse dixit that certain forecasts were “tainted” by
the hard switch decision is untethered to the evidence (in addition to the fact that it does not
dispute the stated fact), and therefore cannot create a genuine issue sufficient to defeat a
summary judgment motion. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s
report is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v. British Airways
plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony without a factual
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foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001).
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
397. On December 15, 2014, Judge Sweet entered a preliminary injunction, which
required that Forest “shall continue to make Namenda IR (immediate-release tablets available on
the same terms and conditions applicable since July 21, 2013 (the date Namenda XR entered the
market)” with which Forest fully complied.
Public Documents: Ex. 288, FRX-AT-01747641, New York. v. Actavis, plc, No.
1:14-cv-07473 (S.D.N.Y. Dec. 15, 2014), Dkt. 85 (“December 2014 Injunction”);
Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473
(S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) (“Whereas, the injunction prevented
Allergan from removing Namenda IR from the market, or limiting the distribution
of Namenda IR, and during the Injunction term and afterwards Allergan has
continued to manufacture and supply Namenda IR, thus permitting patient access
at all times to Namenda IR in all 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, and Guam[.]”).
Defendants’ Evidence: Ex. 359, Devlin Dep. 238:4-245:6 (discussing Ex. 289, Devlin
Ex. 34); Ex. 325, Snyder Dep. 109:11-116:17 (discussing Ex. 290, Snyder Ex. 6).
Plaintiffs’ Admissions: Ex. 364, Lamb (Nov. 10, 2017) Dep. at 132:7-18
(acknowledging that Namenda IR remained available for purchase by direct-purchaser
plaintiffs at all times prior to generic entry in July 2015).
Response: Denied. Before the injunction, Forest had stopped manufacturing
Namenda IR “so that physicians would transition patients to Namenda XR.” Litvin Decl. Ex.
469, Cremieux Dep. (Oct. 20, 2017) at Dep. Ex. 10 at 1 (excerpt of Forest’s Final Form Brief of
Defendants-Appellants (redacted), State of New York ex rel. Schneiderman v. Actavis PLC, No.
14-4624 (2d Cir.), filed Feb. 20, 2015 (ECF No. 262)). See also id. at 32 (“Until the injunction,
Forest no longer made IR.”). Forest did not “fully comply” with the injunction. Instead, Forest
ensured that in most communications that it made to market participants about the injunction that
it prominently featured references to the fact that it was appealing, i.e., challenging, the
injunction. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 56-68; O’Shaughnessy Decl. Ex.
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55, Berndt Reply Report ¶¶ 21-27; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 106-111;
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 69-75. Forest did so to maintain fear,
uncertainty, and doubt in the market with respect to whether Namenda IR would remain on the
market. Defendants’ own expert, Dr. Cremieux, admitted that by announcing it was appealing
the injunction, Forest was communicating to non-lawyers that Forest “disagree[d]” with the
injunction and had decided to “go to a higher court to see whether they can convince the higher
court that, in fact the lower court’s decision was in error.” Litvin Decl. Ex. 468, Cremieux Dep.
(Oct. 20, 2017) at 13:4-21. Forest’s immediate response to the injunction was to issue press
releases stating it was appealing, including stating it was “optimistic that the Court [the Second
Circuit] will overturn the lower court’s unprecedented ruling.” Litvin Decl. Ex. 473, FRX-AT-
03670742 (press release dated Jan. 6, 2015); Litvin Decl. Ex. 471, FRX-AT-03670529 (press
release dated Dec. 11, 2104); Litvin Decl. Ex. 472, FRX-AT-03670602 (press release dated Dec.
15, 2014). By the time Forest’s appeal of the injunction was denied, on May 22, 2015, generic
Namenda IR entry was imminent, and Forest did not drop its public legal effort to challenge the
injunction appeal until November 2015, after entry of generic Namenda IR belatedly had
occurred. Litvin Decl. Ex. 470, Cremieux Dep. Ex. 13 (Allergan (Forest) press release dated
Nov. 25, 2015). Moreover, while Forest sent 900,000 communications to recipients of the
February 14, 2014 communications, that effort was utterly dwarfed by the overwhelming and
pervasive months-long campaign of communicating the Hard Switch to the market from
February 2014 through the summer of 2014. See Response to ¶ 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶ 398. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
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n.3; Fed. R. Civ. P. 56(e)(2). Indeed, DPPs provide no evidence to dispute: (1) that the NYAG
Action injunction stated that Forest “shall continue to make Namenda IR (immediate-release
tablets) available on the same terms and conditions applicable since July 21, 2013 (the date
Namenda XR entered the market),” (2) that Forest did in fact “continue to make Namenda IR
(immediate-release tablets) available on the same terms and conditions applicable since July 21,
2013,” or (3) that the NYAG and the court confirmed Forest complied with the NYAG Action
injunction in the settlement agreement with the NYAG. O’Shaughnessy Decl. I Ex. 288, FRX-
AT-01747641, Dec. 2014 Injunction; O’Shaughnessy Decl. I Ex. 291, Settlement Agreement,
New York v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1)
(“Whereas, the Injunction prevented Allergan from removing Namenda IR from the market, or
limiting the distribution of Namenda IR, and during the Injunction term and afterwards Allergan
has continued to manufacture and supply Namenda IR, thus permitting patient access at all times
to Namenda IR in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, and Guam[.]”). Dr. Lamb conceded that “I don’t believe that there’s ever a
period when [Namenda IR is] not available in the marketplace.” O’Shaughnessy Decl. I Ex. 364,
Lamb (Nov. 10) Dep. 132:7-18.
Moreover, DPPs cite no evidence to support their claims that Forest did not comply with
the NYAG injunction, or that Forest issued press releases after the injunction with the intent to
sow “fear, uncertainty, and doubt in the market” or that Forest’s press releases did, in fact, sow
“fear, uncertainty, and doubt in the market.” Forest mentioning the truthful fact that it was
appealing and other activity mentioned by DPPs in this response was not prohibited by the
injunction. In any event, Dr. Lamb conceded that he did not perform any physician surveys or
other empirical analyses to assess whether physicians were actually influenced by any fear or
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uncertainty about the availability of Namenda IR post-injunction. O’Shaughnessy Decl. I Ex.
364, Lamb (Nov. 10) Dep. 120: 1-15.
DPPs also ignore that, in creating the list of recipients of the press releases post-
injunction, “Forest compiled all of the communications sent as part of its February 2014
announcement in order to ensure that the list of individuals and entities who received the
announcement of the injunction mirrored those who received the February 2014 announcement.”
O’Shaughnessy Decl. I Ex. 290, Decl. of Julie Snyder at ¶ 4. Accordingly, since DPPs provide
no evidence to dispute the fact, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
398. The December 2014 Injunction also required that Forest shall “inform healthcare
providers, pharmacists, patients, caregivers, and health plans of this injunction (and provide a
copy of the injunction or other means to easily view the injunction) and the continued
availability of Namenda IR in the same or substantially similar manner in which they informed
them of Defendants’ plan to discontinue Namenda IR in February 2014” with which Forest fully
complied.
Undisputed Record Evidence: Ex. 288, FRX-AT-01747641, December 2014 Injunction;
Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y.
Nov. 30, 2015) (ECF No. 96-1) (“Whereas, in December 2014 Allergan informed
healthcare providers, pharmacists, patients, caregivers, and health plans of the Injunction
and the continued availability of Namenda IR in the same or substantially similar manner
in which it announced in February 2014 the potential plan to discontinue Namenda
IR[.]”).
Defendants’ Evidence: Ex. 359, Devlin Dep. 238:4-245:6 (discussing Ex. 289, Devlin
Ex. 34); Ex. 325, Snyder Dep. 109:11-116:17 (discussing Ex. 290, Snyder Ex. 6).
Response: Denied. Forest did not communicate to market participates about the
injunction “in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. Ex. 288
(December 2014 Injunction). Instead, Forest limited its communications to 900,000 persons or
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entities that were specifically alerted on February 14, 2014 of the Hard Switch announcement.
See O’Shaughnessy Decl. Ex. 290 (Snyder declaration). That effort was dwarfed by the
overwhelming and pervasive months-long campaign of communicating the Hard Switch to the
market from February 2014 through the summer of 2014, during which Forest described its
intention to “over-communicate to all stakeholders and provide support throughout the process”
of the discontinuation education campaign. Litvin Decl. Ex. 190, FRX-AT-04254209-29 at 214.
William Kane of Forest noted that when announcing the IR withdrawal, Forest “deployed a
comprehensive communications effort across stakeholders to achieve this goal, and we continue
to add new tactics.” Litvin Decl. Ex. 166, FRX-AT-03793847-856 at ‘849. For its withdrawal
campaign, Forest spent more than $575,000.00 with just one vendor to send 5 waves of
2,603,932 emails to caregivers, health care professionals and pharmacists. Litvin Decl. Ex. 474,
Cremieux Dep. Ex. 9, FRX-AT-03749306-08 (email discussing the “multiple waves of emails to
care giver, pharmacists and [long-term care] on discontinuation”). Thus, not all market
participants that were the target of written communications from just one of Forest’s
communications vendors about the hard switch from February through the summer of 2014 were
subject to even one written communication from Forest about the injunction.
Additionally, in a vast majority of the communications to physicians, pharmacists,
caregivers and managed care plans about the injunction prominently featured references to the
fact that Forest was appealing the injunction. See O’Shaughnessy Decl. Ex. 231, Berndt Report
¶¶ 56-68; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 21-27; O’Shaughnessy Decl. Ex.
193, Lamb Report ¶¶ 106-111; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report at ¶¶ 69-75;
Litvin Decl. Ex. 481, FRX-AT-04288490-91 (“Dear Customer” letter noting Forest “plans to
continue the sale” of Namenda “in accordance with a court order, which we are appealing”);
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Litvin Decl. Ex. 480, FRX-AT-03983364-65 (“Dear Healthcare Provider” letter noting Forest
“plans to continue the sale” of Namenda “in accordance with a court order, which we are
appealing”); Litvin Decl. Ex. 479, FRX-AT-03670547 (press release noting Forest’s intention to
“immediately appeal the [injunction] decision”); and O’Shaughnessy Decl. Ex. 290, Declaration
of Julie Snyder (Forest), October 6, 2017, ¶ 5.
Aside from the written communications, Forest’s detail representatives had been
communicating the Hard Switch plan on a daily basis for months, which effort was not mirrored
in communicating the injunction. Prior to the injunction, Forest’s detail representatives were
aggressively promoting the withdrawal in trying to convert physicians to Namenda XR. See
Litvin Decl. Ex. 476, FRX-AT-01808455-57 at 55 (May 15, 2014 email re “Managed
Care/Namenda Conversion,” from Michael Tutera to a number of employees, “When we see
offices that have been resistant to move patients from IR to XR we have to continue to make sure
our teams are reinforcing the NM IR/XR discontinuation”); Litvin Decl. Ex. 475, FRX-AT-
01595548 (Institutional Sales representatives, “Namenda Discontinuation Feedback 2/20/14”,
contains comments such as “Need to leverage to expedite conversion”; “use to accelerate
conversion”; “Helps with pull through at pharmacy”; “give sense of urgency to convert and will
tie in with discontinuation at pharmacy”; “need to switch now to avoid mad rush later”); Litvin
Decl. Ex. 482, FRX-AT-04430584 (March 13, 2014 email re Conversion - noting use of
disruption threat to accelerate; another forwarded email from Randy Gomez. Gomez noted his
discussion with the plan called “Emblem Health.” He said “This discussion really advanced
during today’s call because I placed heavy emphasis on the notion that we don’t want IR
discontinuation to burden the provider or patient as we get close to 8/14/14. We discussed and
agreed that it would offer unwanted roadblocks as IR gets closer to discontinuation.”); Litvin
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Decl. Ex. 478, FRX-AT-03541685-95 (May 2014 Bill Kane speech to POA managers: At ’85:
“we need to pump up the volume, make more noise, and motivate physicians and caregivers to
transition patients to XR as soon as possible. Transitioning patients to XR now allows patients to
realize the convenience of once daily dosing AND minimizes any disruption to patient care that
could occur in September when Namenda tablets will be generally unavailable.” Id. at ’86: We
also need to focus on physicians that are low or no XR prescribers. It surprised me to learn that
there are 15,000 physicians in this category.... We cannot achieve our goal if these physicians
don’t begin to transition patients immediately. This could lead to disruption of patient care,
which we certainly want to minimize. So, we will need to hyper-target these prescribers and
impress upon them the importance of transitioning patients to XR now.” Id. at ’87: “We will
soon be initiating outbound calls from our call center to inform physicians and pharmacists of the
benefits of Namenda XR, the ease of switching from IR to XR, the planned discontinuation of
Namenda tablets, and the importance of transitioning patients now to minimize disruption. While
the brand team will continue to generate increased awareness, it is your sales representatives that
will ultimately drive the conversion.”); Litvin Decl. Ex. 477, FRX-AT-01893766 (June 26, 2014
email from Kvita Panke to William Kane and others re Observations from CNS workshops at
Miami. “Too focused on conversion/discontinuation and lost focus on selling the benefits of
XR”; noting some customers assume the IR discontinuance means it is going generic, but “Reps
are communicating ‘IR will not exist’ to make it clear.”).
After the injunction, Forest’s detail representatives were specifically instructed on how to
address any questions from customers about the plans for Namenda IR; they were instructed to
state that Forest “plans to continue the sale for Namenda tablets according to the court order. We
have appealed the decision and expect more information to be available in February.”
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O’Shaughnessy Decl. Ex. 305, FRX-AT-03794674.
Forest’s communications concerning the appeal helped maintain fear, uncertainty, and
doubt in the market with respect to whether Namenda IR would remain on the market. See
O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 18, 21-24; O’Shaughnessy Decl. Ex. 193,
Lamb Report ¶¶111-18; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report, ¶¶ 17, 69-75, 91. See
Response to ¶ 397.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Indeed, DPPs provide no evidence to dispute: (1) that the
NYAG Action injunction required Forest to “inform healthcare providers, pharmacists, patients,
caregivers, and health plans of this injunction (and provide a copy of the injunction or other
means to easily view the injunction) and the continued availability of Namenda IR in the same or
substantially similar manner in which they informed them of Defendants’ plan to discontinue
Namenda IR in February 2014,” or (2) that the NYAG and the court confirmed Forest complied
with the NYAG Action injunction in the settlement agreement with the NYAG. O’Shaughnessy
Decl. I Ex. 288, FRX-AT-01747641, December 2014 Injunction; O’Shaughnessy Decl. I Ex.
291, Settlement Agreement, New York v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov. 30,
2015) (ECF No. 96-1) (“Whereas, in December 2014 Allergan informed healthcare providers,
pharmacists, patients, caregivers, and health plans of the Injunction and the continued
availability of Namenda IR in the same or substantially similar manner in which it announced in
February 2014 the potential plan to discontinue Namenda IR[.]”). The evidence DPPs cite in
response also fails to distinguish hard switch from indisputably legal soft switch efforts, such as
promoting the benefits of XR and discounting. Plaintiffs’ reference to “fear, uncertainty, and
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doubt” is ipse dixit, untethered to the evidence, as Dr. Lamb conceded that he did not perform
any physician surveys or other empirical analyses to assess whether physicians were actually
influenced by any fear or uncertainty about the availability of Namenda IR post-injunction. See
O’Shaughnessy Decl. I Ex. 364, Lamb (Nov. 10) Dep. 121:25-123:7. Forest mentioning the
truthful fact that it was appealing and other activity mentioned by DPPs in this response was not
prohibited by the injunction. Forest further notes that the injunction did not require the exact
same number of communications to be sent. Additionally, DPPs’ reliance on Litvin Decl. Ex.
474, Cremieux Dep. Ex. 9, FRX-AT-03749306-08 is misplaced. That document confirms that
less than 9% of the withdrawal emails were even opened and, moreover, less than 2% clicked the
link in the email. Id. Accordingly, since DPPs provide no evidence to dispute the fact, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
399. The December 2014 Injunction required that Forest “shall not impose a ‘medical
necessity’ requirement or form for filling of prescriptions of Namenda IR during the Injunction
Term” with which Forest fully complied.
Undisputed Record Evidence: Ex. 288, FRX-AT-01747641, December 2014 Injunction;
Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y.
Nov. 30, 2015) (ECF No. 96-1) (“Whereas, Allergan did not impose a “medical necessity
requirement for patients to receive Namenda IR before, during or after the Injunction;
Whereas at no time before during or after the Injunction was Namenda IR made
unavailable by Allergan or otherwise limited in distribution [.]”).
Defendants’ Evidence: Ex. 359, Devlin Dep. 238:4-245:6 (discussing Ex. 289, Devlin
Ex. 34); Ex. 325, Snyder Dep. 109:11-116:17 (discussing Ex. 290, Snyder Ex. 6); Ex.
290, October 6, 2015 Declaration of Julie Snyder.
Response: Admitted.
400. During the period between December 2014 and June 2015, Forest undertook steps
designed to undo any purported effects of the February 2014 announcement, including posting
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the December 2014 Injunction to the Namenda website and circulating over 900,000 emails to
the caregiver community.
Undisputed Record Evidence: Summary Judgment Mem. Decision and Order, Dkt. 253,
at 16; Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473
(S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at *1-2.
Defendants’ Evidence: Ex. 359, Devlin Dep. 238:4-245:6 (discussing Ex. 289, Devlin
Ex. 34); Ex. 325, Snyder Dep. 109:11-116:17 (discussing Ex. 290, Snyder Ex. 6)
Response: Denied. See Response to ¶¶ 397, 398.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Additionally, Forest hereby incorporates by reference its
objections to DPPs’ responses to ¶¶ 397 and 398. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
401. In June 2015, 24 months after Namenda XR’s launch in June 2013, Namenda
XR’s share of the memantine market in the actual world based on NSP data rose to
approximately 50%.
Defendants’ Evidence: Ex. 287, Cremieux Rep. ¶ 50, Fig. 1 (reflecting the results of
produced backup data for Plaintiffs’ expert Dr. Russell Lamb).
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. ¶ 98, Fig. 4.
Response: Admitted in part, denied in part. Admitted that the share reached 50% or
more. Denied to the extent there is any implication that the share in excess of the expected 30%
was unrelated to the Hard Switch campaign. See Response to ¶¶ 392, 398.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
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statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Additionally, Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 392 and 398. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
402. At the time of generic entry in July 2015, the conversion rate of Namenda XR was
approximately 53%.
Defendants’ Evidence: Ex. 287, Cremieux Rep. ¶ 50, Fig. 1 (reflecting the results of
produced backup data for Plaintiffs’ expert Dr. Russell Lamb); Ex. 54 Fowdur Rep. ¶
103, Fig. B (reflecting 52.8% conversion based on weekly NPA data).
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. ¶ 98, Fig. 4.
Response: Admitted in part, denied in part. Admitted that the share reached 53% in
July 2015. Denied to the extent there is any implication that the share in excess of the expected
30% was unrelated to the Hard Switch campaign. See Response to ¶¶ 392, 398.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Additionally, Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 392 and 398. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
F. The February 2014 Planned-Withdrawal Announcement
403. On October 18, 2013, Forest was internally considering withdrawing Namenda IR
from the market.
Defendants’ Evidence: Ex. 292, FRX-AT-01731312 (Letter, Namenda XR Transition
Project Team (Oct. 18, 2013)).
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Undisputed Record Evidence: Ex. 6, Unredacted Sweet Opinion, ¶ 75.
Response: Denied. The decision to withdraw was made on or before October 18,
2013. The cited documents establish this very clearly in which Forest’s Gary Simorski states the
following: “Dear All, Forest has made the decision to discontinue sales of Namenda IR and
transition all patients to Namenda XR.” O’Shaughnessy Decl. Ex. 292, FRX-AT-01731312.
Judge Sweet found exactly that: “On October 18, 2013, a Forest executive emailed his
colleagues, announcing the decision to withdraw Namenda from the market.” O’Shaughnessy
Decl. Ex. 6, Unredacted Sweet Opinion, ¶ 75.
Forest’s Objection: The evidence cited by DPPs does not dispute the fact. DPPs ignore
that William Meury, who was the Executive Vice President of Marketing and Global Operations
for Forest at the time, responded and clarified that the “project [was] still in the planning phase”
and that “no public announcements [had] been made.” Litvin Decl. Ex. 100, FRX-AT-
01779417. Additionally, when asked when the decision to discontinue Namenda IR was made,
Brenton Saunders, CEO of Forest, stated that he made the decision on February 14, 2014. See
O’ Shaughnessy Decl. I Ex. 354, Saunders (NYAG) Dep. 320:7-321:13. As such, none of the
evidence DPPs cite disputes the fact and, therefore, it should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
404. Forest’s CEO Brent Saunders made the final decision to withdraw Namenda IR
from the market on February 2014.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Opinion, ¶ 75.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One at 35, ¶ 79.
Defendants’ Evidence: Ex. 354, NYAG Saunders Dep.Tr. (Oct. 25, 2014) 321:6-25 (“Q.
Who made the decision to discontinue Namenda IR? A. I did. Q. You’re saying February
2014 is when the decision was made, is that correct? A. I made the decision. Q. And you
made the decision. Was there a meeting that you made the decision at, a telephone call?
A. No, we had a series of meetings throughout late 2013 and up until February 14th of
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2014, this was not a decision we made lightly, we carefully considered it, we studied it.
And because we achieved all of our objectives at the time, so we thought, we thought we
had the green light to go ahead and do it.”)
Response: Denied. The decision to withdraw was made on or before October 18,
2013. See Response to ¶ 403.
Forest’s Objection: The evidence cited by DPPs does not dispute the fact. DPPs ignore
that William Meury, who was the Executive Vice President of Marketing and Global Operations
for Forest at the time, responded and clarified that the “project [was] still in the planning phase”
and that “no public announcements [had] been made.” Litvin Decl. Ex. 100, FRX-AT-
01779417. Additionally, when asked when the decision to discontinue Namenda IR was made,
Brenton Saunders, CEO of Forest, stated that he made the decision on February 14, 2014. See
O’ Shaughnessy Decl. I Ex. 354, Saunders (NYAG) Dep. 320:7-321:13. Additionally, Forest
hereby incorporates by reference its objections to DPPs’ response to ¶ 403. As such, none of the
evidence DPPs cite disputes the fact and, therefore, it should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
405. On February 14, 2014, Forest issued a press release publically announcing its plan
to focus its manufacturing and marketing efforts on once-a-day Namenda XR and discontinue
the sale of Namenda IR tablets effective August 15, 2014 (the “February 2014 Announcement”).
Defendants’ Evidence: Ex. 293, FRX-AT-01769268 (Press Release, Forest Labs, Forest
Laboratories to Discontinue Namenda® Tablets, Focus on Once-Daily Namenda XR®
(Feb. 14, 2014)).
Plaintiffs’ Admissions: Am. Compl., Dkt. 26, ¶ 174; DPPs’ Statement of Material Facts
ISO Count One ¶ 15.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op., ¶ 77 (“On February 14,
2014, Forest began the ‘forced switch’ by publically announcing that Namenda IR tablets
would be discontinued on August 15, 2014.”) (citation omitted).
Response: Admitted in part, denied in part. Admitted that the press release stated
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Forest planned to discontinue the sales of Namenda IR. Denied that the press release cited
announced a “plan to focus its manufacturing and marketing efforts on once-a-day Namenda.”
See O’Shaughnessy Decl. Ex. 293, FRX-AT-01769268; O’Shaughnessy Decl. Ex. 6, Unredacted
Sweet Op., ¶ 77.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
406. The February 2014 Announcement quoted Marco Taglietti, “‘Namenda XR offers
important benefits, including convenient, once-daily dosing, which is particularly meaningful for
this patient population and their caregivers.’”
Defendants’ Evidence: Ex. 293, FRX-AT-01769268 (Press Release, Forest Labs, Forest
Laboratories to Discontinue Namenda® Tablets, Focus on Once-Daily Namenda XR®
(Feb. 14, 2014)).
Response: Admitted in part, denied in part. Admitted that Mr. Taglietti made the
statement quoted. Denied that any “benefits” of XR were “important” or “particularly
meaningful,” and Forest executives knew they were not. Forest executive Mark Devlin noted the
lack of any benefit from the dosing regimen noting, “the point about dosing frequency not
mattering is probably accurate ... they dispense meds multiple times a day to institutionalized
patients anyway, so QD vs BID isn’t a real factor.” Litvin Decl. Ex. 108, FRX-AT-01808336
(March 18, 2014 email string involving Frank Murdolo, William Meury and Mark Devlin); see
also Litvin Decl. Ex. 172, FRX-AT-03861621-58 at ‘28 (September 12, 2012, “Namenda XR
Roadmap to Launch,” “Initial positioning research told us differentiating on convenience
wouldn’t be enough to drive successful conversions”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
407. The February 2014 Announcement also stated, “Importantly, physicians can
switch patients from NAMENDA to NAMENDA XR the very next day without titration, as
outlined in the FDA-approved package insert. In addition to its convenient dosing, NAMENDA
R capsules can be opened and the contents sprinkled on applesauce for patients who have
difficulty swallowing pills.”
Defendants’ Evidence: Ex. 293, FRX-AT-01769268 (Press Release, Forest Labs, Forest
Laboratories to Discontinue Namenda® Tablets, Focus on Once-Daily Namenda XR®
(Feb. 14, 2014)).
Response: Admitted in part, denied in part. Admitted that the quoted language
appears in the press release. Denied that there was any alleged convenience with respect to once-
daily dosing, and Forest executives knew it. Forest saw no benefit from any alleged convenience.
Litvin Decl. Ex. 172, FRX-AT-03861621-58 at ‘28 (September 12, 2012, “Namenda XR
Roadmap to Launch,” “Initial positioning research told us differentiating on convenience
wouldn’t be enough to drive successful conversions”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
408. The February 2014 Announcement gave advanced notice to all relevant
stakeholders by announcing Forest’s truthful intentions at the time to discontinue its older,
twice-a-day tablet product.
Defendants’ Evidence: Defendants’ Response to DPPs’ Statement of Material Facts on
Count One, Dkt. 158, at 9.
Response: Admitted in part, denied in part. Admitted that the February 2014
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Announcement gave advance notice to relevant stakeholders. Denied that for many of the
stakeholders that this was the first such advance notice; many market participants had been
alerted far in advance of February 14, 2014. See Response to ¶ 373.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Additionally, Forest
hereby incorporates by reference its objections to DPPs’ response to ¶ 373. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
409. Forest also issued letters communicating its plan to patients, caregivers, health
care providers, and various interest groups.
Defendants’ Evidence: Ex. 294, FRX-AT-01784874 (Feb. 18, 2014 Letter from Forest to
Caregivers); Ex. 295, FRX-AT-01784876 (Feb. 14, 2014 Letter from Forest to Health
Care Providers).
Plaintiffs’ Admissions: Am. Compl., Dkt. 26, ¶ 175.
Response: Admitted.
G. The Continued-Availability Announcement in June 2014
410. In the Summer of 2014, due to manufacturing issues with Namenda XR, Forest
experienced a shortage in its Namenda XR supply.
Defendants’ Evidence: Ex. 296, Declaration of Robert Stewart (Oct. 21, 2014), ¶ 10,
FRX-AT-01771882; Ex. 365, Stewart (NYAG) Deposition, (Nov. 2, 2014) 49:25-67:25,
77:7-78:8, FRX-AT-01733121; Ex. 11, Meury (NYAG) Decl. at ¶¶ 22-23, FRX-AT-
01771984.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op., ¶¶ 98-99.
Response: Admitted.
411. On June 10, 2014 Forest announced that it would not withdraw Namenda IR on
August 15, 2014 as originally stated, due to the shortage.
Defendants’ Evidence: Ex. 297, FRX-AT-01765949 (Press Release, Forest Labs, Forest
Laboratories Announces Intention to Continue Marketing Both NAMENDA® TABLETS
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and Once-Daily NAMENDA XR® Into the Fall of 2014 (June 10, 2014)).
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count One, Dkt. 145, ¶
85.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op., ¶ 99.
Response: Admitted in part, denied in part. Admitted that Forest announced it would
not withdraw Namenda IR in August. Denied to the extent it ignores the fact that Forest
indicated it would still be withdrawing Namenda IR in the fall. O’Shaughnessy Decl. Ex. 297,
FRX-AT-01765949 (“Final Conversion to Namenda XR Anticipated Later This Year”).
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
412. Due to the temporary supply issues of Namenda XR, the conversion rate began to
decline after July 2014, and likely caused many patients to switch from Namenda XR to
Namenda IR during this time.
Defendants’ Evidence: Ex. 198 Declaration of Jerry A. Hausman (Oct. 21, 2014), ¶ 14,
FRX-AT-01779957.
Response: Denied. While there may have been some prescriptions that were filled
with Namenda IR, any switching back was caused by an unavailability of Namenda XR, which
demonstrates clearly that the announcement that supply of a particular formulation is limited, or
will be withdrawn, can impact the share of the particular formulation. Nonetheless, physician
habits had been impacted by the Hard Switch campaign, and the data indicates that patients were
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being administered Namenda XR once the shortage ended to the same degree and more as they
had been prior to the shortage. See O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶ 87
(noting Forest executives understood “Physicians have habits and old habits die hard.” (citing
Litvin Decl. Ex. 483, FRX-AT-01630868-888 at 884)); see also Litvin Decl. Ex. 484, FRX-
AT-04195587-600 at 89, 96-97 (in a June 2013 draft of a speech on the Namenda XR launch,
Maria Theodore of Forest noted, “We have to persuade physicians about why they should treat
today with Namenda XR... why they should convert their patients. [...] “But there is another
obstacle... too. I’ll give you a hint...we all have them ... some good and some bad .... It’s ‘habit’.
Namenda is a good product and physicians have been prescribing it for almost a decade. It’s very
automatic. It’s a habit. Usually ...this obstacle disappears over time because over time new habits
will form. However ... given our urgency ... we need to speed up the process. Physicians need to
start automatically adding the letters XR on the prescription pad right away. Leave this message
wringing in doctors’ ears ... ‘Don’t forget -you have to write Namenda XR!’”). Furthermore,
after the supply shortage ended in September 2014, Namenda XR’s share of total memantine
sales quickly returned to approximately the same level it had before the shortage, see
O’Shaughnessy Decl. Ex. 193, Lamb Report ¶109 & Fig. 7, belying any inference of any long-
term reverse commuting effect.” Moreover, O’Shaughnessy Decl. Ex. 198 does not support
Forest’s assertion. It acknowledges the supply issues, but does not suggest that the supply issues
“caused many patients to switch from Namenda XR to Namenda IR.”
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
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the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. DPPs admit that the July announcement of unavailability caused
patients to switch back to Namenda IR, which makes their failure to do any analysis of switching
back in response to the injunction particularly glaring. DPPs have no facts to support their
contention that the February 14, 2014 announcement caused switiching because their experts did
no analysis that isolated the effects of the February 14 announcement. Similarly they have no
facts to dispute that anyone who switched to Namenda XR because of the February 14
announcement, then switched back to Namenda IR after the injuction. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
H. The Standstill Agreement
413. On February 28, 2014, the NYAG initiated an investigation into Forest’s planned
withdrawal of Namenda IR.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at 5.
Plaintiffs’ Admissions: DPPs’ Mem. of Law ISO Count One, Dkt. 144 at 2.
Response: Admitted.
414. The NYAG sought to prevent Forest from executing its business plan to
“withdraw [Namenda IR] from the market” later that year, which the NYAG referred to as the
“forced switch.”
Undisputed Record Evidence: Ex. 298, Am. Complaint, New York. v. Actavis, plc, No.
1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015), ¶ 2, FRX-AT-01747086.
Response: Admitted.
415. On September 23, 2014, Forest agreed to a standstill of any future conduct.
Undisputed Record Evidence: Ex. 299, Letter to J. Sweet (Sept. 23, 2014), FRX-AT-
01748060; Ex. 300, Letter to J. Sweet (Nov. 13, 2014), FRX-AT-01748115.
Response: Admitted in part and denied in part. Admitted there was a “standstill
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agreement.” Denied that the standstill agreement muted the impact of the Hard Switch campaign.
See Response to ¶¶ 397, 398.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Additionally, Forest hereby incorporates its objection to DPPs’
responses to ¶¶ 397 and 398. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P.
56(e)(2).
I. The December 2014 Injunction
416. On December 15, 2014, Judge Sweet entered an injunction in the NYAG action.
Pursuant to the injunction, Forest was required to continue to make Namenda IR tablets available
on the same terms and conditions applicable since the date Namenda XR entered the market.
Undisputed Record Evidence: Ex. 288, December 2014 Injunction at 1.
Plaintiffs’ Admissions: DPPs’ Mem. of Law ISO Count One, Dkt. 144 at 2.
Response: Admitted in part and denied in part. Admitted that Judge Sweet issued an
injunction. Denied that Forest continued “to make Namenda IR tablets available on the same
terms and conditions applicable since the date Namenda XR entered the market.” See
O’Shaughnessy Decl. Ex. 288 (December 2014 Injunction). Namenda IR was still under the
threat of removal, as Forest consistently and pervasively noted that it was appealing the decision,
had announced it was “optimistic” the injunction would be overturned, and sowed fear,
uncertainty and doubt in the market as a result. See Response to ¶¶ 397, 398.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Additionally, Forest hereby incorporates its objection to DPPs’
responses to ¶¶ 397 and 398. None of the activity cited by DPPs was prohibited by the
injunction. And DPPs have no evidence that anyone actually suffered “fear, uncertainty and
doubt” as a result of Forest mentioning the truthful fact that it was appealing the decision. Dr.
Lamb conceded that he did not perform any physician surveys or other empirical analyses to
assess whether physicians were actually influenced by any fear or uncertainty about the
availability of Namenda IR post-injunction. O’Shaughnessy Decl. I Ex. 364, Lamb (Nov. 10)
Dep. 120:10-15. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
417. Forest was required to inform healthcare providers, pharmacists, patients,
caregivers, and health plans of the injunction in the same or substantially similar manner in
which Forest informed the market of Forest’s plan to discontinue Namenda IR in February 2014.
Undisputed Record Evidence: Ex. 288, December 2014 Injunction at 1.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶ 3.
Response: Admitted in part and denied in part. Admitted that Forest was required to
do so, denied that Forest did so. See Response to ¶¶ 397, 398.
Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
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427
Dist. LEXIS 73221, at *24-25. Additionally, Forest hereby incorporates its objection to DPPs’
responses to ¶¶ 397 and 398. Furthermore, Forest notes that DPPs admit this fact in ¶ 423.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
418. “[T]he injunction protected competition and allowed low cost generic drugs to
enter the market unimpeded ....”
Public Document: Press Release, New York Attorney General, A.G.
Schneiderman Announcements Resolution of Lawsuit That Protected Alzheimer’s
Patients From Anticompetitive Tactic Aimed At Maintaining Higher Drug Prices
(November 25, 2015).
Response: Denied. The press release is inadmissible hearsay, and thus, the statement
is not supported by admissible evidence. Thus, Defendants cite no evidence that supports their
contention and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d
Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those portions of
the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material
fact.’”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Even after the injunction,
Namenda IR was still under the threat of removal, as Forest consistently and pervasively noted
that it was appealing the decision, and sowed fear, uncertainty and doubt in the market as a
result. See Response to ¶¶ 397, 398. Forest did not send letters to market participants alerting
them of the Second Circuit affirmance, and Forest did not drop its public legal challenge to the
injunction until November 2015, after generic Namenda IR belatedly had entered the market.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398. DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). Moreover, as a public statement by the New York Attorney General regarding
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the possible withdrawal and continuing availability of Namenda IR, the press release cannot be
objected to on the basis of hearsay. See Stipulation at 1-2, In re Namenda Antitrust Litig., No.
15-07488 (Mar. 16, 2017), ECF No. 153. Specifically, the Stipulation says, “The following
categories of evidence from The People of the State of New York v. Actavis, et al., Case No. 14-
cv-7473 (S.D.N.Y.) (the “NYAG Action”) are deemed to be, and shall be treated as, as if they
were submitted or taken in this case: . . . e) All press releases and other public statements made
by parties to the NYAG Action regarding the possible withdrawal and continuing availability of
Namenda IR” and “[t]he parties agree that they will not object to the admissibility of . . . all other
evidence referenced in section (1) above on the grounds that it otherwise would violate Federal
Rule of Evidence 802.” Id.
Additionally, the document qualifies under the public record exception to the hearsay
rule. See Maize v. Nassau Health Care Corp., No. 05-cv-4920, 2012 U.S. Dist. LEXIS 8227, at
*1-2 (E.D.N.Y. Jan. 24, 2012)(“[F]actual findings resulting from an investigation made pursuant
to authority granted by law are not exclud[able] by the hearsay rule”); Stepski v. M/V Norasia
Alya, No. 7:06-cv-01694, 2010 U.S. Dist. LEXIS 16602, at *15-16 (S.D.N.Y. Jan. 14, 2010)
(citing Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991)) (“Moreover, the
document is not hearsay as the Court may take judicial notice of a government-issued press
release as a matter of public record.”); Fed. R. Evid. 803(8).
Moreoever, Plaintiffs’ reference to “fear, uncertainty, and doubt” is ipse dixit, untethered
to the evidence, as Dr. Lamb conceded that he did not perform any physician surveys or other
empirical analyses to assess whether physicians were actually influenced by any fear or
uncertainty about the availability of Namenda IR post-injunction. See O’Shaughnessy Decl. I
Ex. 364, Lamb (Nov. 10) Dep. 121:25-123:7. Accordingly, the fact should be deemed admitted.
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SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
419. The NYAG injunction required Forest to undo the effects of the February 2014
announcement.
Undisputed Record Evidence: Summary Judgment Mem. Decision and Order at 1, 16
(ECF No. 253) (indicating the NYAG injunction required Forest to “undo” the effects of
the February 2014 announcement); Ex. 291, Settlement Agreement, New York. v. Actavis,
plc, No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 3 (“[T]he Injunction
was effective in protecting competition in the relevant market ....”).
Response: Denied. The Injunction does not contain the language “undo the effects”.
Instead, the injunction required that Forest not actually permanently discontinue sale of
Namenda IR until after generic entry, that Forest impose no “medical necessity requirement”
with respect to Namenda IR, and required that “On or before December 23, 2014, Defendants
shall inform healthcare providers, pharmacists, patients, caregivers, and health plans of this
injunction (and provide a copy of the injunction or other means to easily view the injunction) and
the continued availability of Namenda IR in the same or substantially similar manner in which
they informed them of Defendants’ plan to discontinue Namenda IR in February 2014.” Litvin
Decl. Ex. 269, Devlin Ex. 39, Judge Sweet’s Injunction Order. Forest did not do so; instead
Forest communicated to some of the recipients of an announcement of the withdrawal in
February 2014, that Namenda IR would not be discontinued due to the injunction, but
specifically noted Forest was appealing the injunction. See Response to ¶¶ 397, 398. Thus,
Namenda IR was still under the threat of removal, as Forest consistently and pervasively noted
that it was appealing the decision, and sowed fear, uncertainty and doubt in the market as a
result. See Response to ¶¶ 397, 398. Forest did not send letters to market participants alerting
them of the Second Circuit affirmance, and Forest did not drop its public legal challenge to the
injunction until November 2015, after generic Namenda IR belatedly had entered the market.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
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397-398. DPPs ignore that this Court already found in its summary judgment decision that the
NYAG Action injunction “require[ed] Forest to affirmatively undo the effects of its
announcement of the withdrawal.” Summ. J. Mem. Decision & Order 1, 16, In re Namenda
Direct Purchaser Antitrust Litig., No. 15-cv-07488-CM (S.D.N.Y. May 23, 2017), ECF No. 253.
Moreoever, Plaintiffs’ reference to “fear, uncertainty, and doubt” is ipse dixit, untethered to the
evidence, as Dr. Lamb conceded that he did not perform any physician surveys or other
empirical analyses to assess whether physicians were actually influenced by any fear or
uncertainty about the availability of Namenda IR post-injunction. See O’Shaughnessy Decl. I
Ex. 364, Lamb (Nov. 10) Dep. 121:25-123:7. As such, the fact is undisputed and, therefore, the
fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
420. “As a result of the injunction, Alzheimer’s patients have not been forced to switch
from Namenda IR to Namenda XR, and instead have been able to select which drug to use based
on their and their physicians’ views of which drug is best for them.”
Public Document: Press Release, New York Attorney General, A.G.
Schneiderman Announcements Resolution of Lawsuit That Protected Alzheimer’s
Patients From Anticompetitive Tactic Aimed At Maintaining Higher Drug Prices
(November 25, 2015).
Response: Denied. The press release is inadmissible hearsay, and thus, the statement
is not supported by admissible evidence. Thus, Defendants cite no evidence that supports their
contention and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d
Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those portions of
the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material
fact.’”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). See also Response to ¶¶
397, 398.
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Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398. DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). Moreover, as a public statement by the New York Attorney General regarding
the possible withdrawal and continuing availability of Namenda IR, the press release cannot be
objected to on the basis of hearsay. See Stipulation at 1-2, In re Namenda Antitrust Litig., No.
15-07488 (Mar. 16, 2017), ECF No. 153. Specifically, the Stipulation says, “The following
categories of evidence from The People of the State of New York v. Actavis, et al., Case No. 14-
cv-7473 (S.D.N.Y.) (the “NYAG Action”) are deemed to be, and shall be treated as, as if they
were submitted or taken in this case: . . . e) All press releases and other public statements made
by parties to the NYAG Action regarding the possible withdrawal and continuing availability of
Namenda IR” and “[t]he parties agree that they will not object to the admissibility of . . . all other
evidence referenced in section (1) above on the grounds that it otherwise would violate Federal
Rule of Evidence 802.” Id.
Additionally, the document qualifies under the public record exception to the hearsay
rule. See Maize v. Nassau Health Care Corp., No. 05-cv-4920, 2012 U.S. Dist. LEXIS 8227, at
*1-2 (E.D.N.Y. Jan. 24, 2012)(“[F]actual findings resulting from an investigation made pursuant
to authority granted by law are not exclud[able] by the hearsay rule”); Stepski v. M/V Norasia
Alya, No. 7:06-cv-01694, 2010 U.S. Dist. LEXIS 16602, at *15-16 (S.D.N.Y. Jan. 14, 2010)
(citing Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991)) (“Moreover, the
document is not hearsay as the Court may take judicial notice of a government-issued press
release as a matter of public record.”); Fed. R. Evid. 803(8). Accordingly, the fact should be
deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
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432
421. Accordingly, as a result of the Attorney General’s lawsuit, patients who wished to
remain on Namenda IR during early 2015 and then switch to the generic version when it became
available over the summer were able to do so without any disruption in their medical treatment.”
Public Document: Press Release, New York Attorney General, A.G.
Schneiderman Announcements Resolution of Lawsuit That Protected Alzheimer’s
Patients From Anticompetitive Tactic Aimed At Maintaining Higher Drug Prices
(November 25, 2015).
Response: Denied. The press release is inadmissible hearsay, and thus, the statement
is not supported by admissible evidence. Thus, Defendants cite no evidence that supports their
contention and it is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d
Cir. 2002) (Rule 56 “places the initial burden on the moving party to identify ‘those portions of
the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material
fact.’”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). See also Response to ¶¶
397, 398.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398. DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). Moreover, as a public statement by the New York Attorney General regarding
the possible withdrawal and continuing availability of Namenda IR, the press release cannot be
objected to on the basis of hearsay. See Stipulation at 1-2, In re Namenda Antitrust Litig., No.
15-07488 (Mar. 16, 2017), ECF No. 153. Specifically, the Stipulation says, “The following
categories of evidence from The People of the State of New York v. Actavis, et al., Case No. 14-
cv-7473 (S.D.N.Y.) (the “NYAG Action”) are deemed to be, and shall be treated as, as if they
were submitted or taken in this case: . . . e) All press releases and other public statements made
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433
by parties to the NYAG Action regarding the possible withdrawal and continuing availability of
Namenda IR” and “[t]he parties agree that they will not object to the admissibility of . . . all other
evidence referenced in section (1) above on the grounds that it otherwise would violate Federal
Rule of Evidence 802.” Id. Additionally, the document qualifies under the public record
exception to the hearsay rule. See Maize v. Nassau Health Care Corp., No. 05-cv-4920, 2012
U.S. Dist. LEXIS 8227, at *1-2 (E.D.N.Y. Jan. 24, 2012)(“[F]actual findings resulting from an
investigation made pursuant to authority granted by law are not exclud[able] by the hearsay
rule”); Stepski v. M/V Norasia Alya, No. 7:06-cv-01694, 2010 U.S. Dist. LEXIS 16602, at *15-
16 (S.D.N.Y. Jan. 14, 2010) (citing Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir.
1991)) (“Moreover, the document is not hearsay as the Court may take judicial notice of a
government-issued press release as a matter of public record.”); Fed. R. Evid. 803(8).
Accordingly, the fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2).
422. Forest complied with the NYAG injunction.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶¶ 3-6.
Undisputed Record Evidence: Ex. 291, Settlement Agreement, New York. v. Actavis, plc,
No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 3 (indicating Forest
compiled with the injunction and informed constitutes of Namenda IR’s continued
availability).
Response: Denied. While Forest did not actually permanently discontinue selling
Namenda IR until a month after generic entry, Forest did not fully comply with the injunction.
See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses included in ¶¶ 397 and 398. Additionally, DPPs’ response consists of improper
argument or a recitation of different purported facts, but no evidentiary basis to contest the
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statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
J. The January 2015 Continued-Availability Announcement
423. Forest was required to notify healthcare providers, pharmacists, patients,
caregivers, and health plans of the injunction in the same or substantially similar manner as the
February 2014 announcement.
Undisputed Record Evidence: Ex. 288, December 2014 Injunction.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶ 3.
Response: Admitted.
424. Forest sent over 900,000 communications alerting the market of the injunction
and continued availability of Namenda IR.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶¶ 3-6; Ex. 325, Snyder Dep. 115:3-19.
Response: Admitted in part, denied in part. Admitted that Forest sent over 900,000
communications. Denied that those communications were limited to “alerting the market of the
injunction and continued availability of Namenda IR.” As noted above, Forest tainted the
majority of these communications with the assertion that Forest was appealing the injunction to
create fear, uncertainty and doubt about the continued availability of Namenda IR. See Response
to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397-398, and 418. DPPs’ response consists of improper argument or a recitation
of different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp.
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3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). The stated fact does not say that the communications
were “limited to” these issues. Furthermore, DPPs’ response merely attempts to “contextualize
or dispute the relevance of the statement,” but does not challenge any aspect of the statement
itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Forest mentioning the truthful fact that it was appealing and other activity
mentioned by DPPs in this response was not prohibited by the injunction.
In particular, DPPs’ response stems from a misreading of the Snyder declaration.
O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶ 4 (“To comply with the injunction, Forest
compiled all of the communications sent as part of its February 2014 announcement in order to
ensure that the list of individuals and entities who received the announcement of the injunction
mirrored those who received the February 2014 announcement.”). Similarly, the exact language
of Judge Sweet’s injunction required Forest to “inform healthcare providers, pharmacists,
patients, caregivers, and health plans of this injunction . . . and the continued availability of
Namenda IR in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. I Ex.
288, FRX-AT-01747641 at 7641-2 (emphasis added). Judge Sweet’s injunction did not require
Forest to exactly duplicate all forms of communication to all those potentially affected by any
communication with Forest, nor did the injunction preclude Forest from referencing its decision
to appeal the injunction. Forest performed the required outreach to those contacted in February
2014. O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶¶ 4-5. The State of New York was unaware
of any failure by Allergan to conform with its communication obligations under the injunction
and affirmatively stated that Allergan fulfilled its obligations; Judge Sweet approved dismissal of
the case based on the settlement agreement indicating Allergan complied with these provisions.
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436
O’Shaughnessy Decl. I Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-
07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at *3-4. And as this Court has repeatedly
stated, the injunction “blunted much of the success of Forest's ‘hard switch,’” Sergeants
Benevolent Ass’n Health & Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S. Dist. LEXIS
128349, at *30 (S.D.N.Y. Sept. 13, 2016). Further, Litvin Decl. Ex. 190 is dated June 26, 2013
— well before even Plaintiffs would contend that any hard switch conduct was initiated, and
contains no evidence contradicting the communication plan articulated by Ms. Snyder.
Lastly, Plaintiffs’ reference to “fear, uncertainty, and doubt” is ipse dixit, untethered to
the evidence. See e.g., O’Shaughnessy Decl. I Ex. 364, Lamb (Nov. 10) Dep. 121:25-123:7
(discussing Dr. Lamb’s failure to survey physicians and caregivers about any perceived
uncertainty from references to the appeal in announcements). Forest mentioning the truthful fact
that it was appealing and other activity mentioned by DPPs in this response was not prohibited
by the injunction, and DPPs have offered nothing in the way of evidence to support such an
assertion created “fear, uncertainty, or doubt” in the marketplace at all.
Accordingly, since DPPs provide no evidence to dispute the fact, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
425. Forest compiled all of the communications sent as part of its February
announcement in order to ensure that the same individuals and entities would also receive the
announcement of the injunction and continued availability of Namenda IR.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶ 4.
Response: Denied. Forest limited its communications to 900,000 persons or entities
that were specifically alerted on February 14, 2014 of the Hard Switch announcement. See
O’Shaughnessy Decl. Ex. 290 (Snyder declaration). Forest did not send communications to every
individual or entity that received communications “as part of its February announcement,” which
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included individuals notified of the Hard Switch campaign between February 2014 and late
summer 2014 (including over 2.6 million communications by just one vendor, and countless
physician contacts through Forest’s detail representatives), during which Forest described its
intention to “over-communicate to all stakeholders and provide support throughout the process”
of the discontinuation education campaign. Litvin Decl. Ex. 190, FRX-AT-04254209-29 at 214.
See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397-98, and 418. DPPs’ response consists of improper argument or a recitation
of different purported facts, but no evidentiary basis to contest the statement. Accordingly, the
fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Additionally, DPPs’ response does not provide any evidentiary basis to contest the statement, but
instead attempts to “contextualize or dispute the relevance of the statement,” which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
In particular, DPPs’ response stems from a misreading of the Snyder declaration.
O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶ 4 (“To comply with the injunction, Forest
compiled all of the communications sent as part of its February 2014 announcement in order to
ensure that the list of individuals and entities who received the announcement of the injunction
mirrored those who received the February 2014 announcement.”). Similarly, the exact language
of Judge Sweet’s injunction required Forest to “inform healthcare providers, pharmacists,
patients, caregivers, and health plans of this injunction . . . and the continued availability of
Namenda IR in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. I Ex.
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438
288, FRX-AT-01747641 at 7641-2 (emphasis added). Judge Sweet’s injunction did not require
Forest to exactly duplicate all forms of communication to all those potentially affected by any
communication with Forest, nor did the injunction preclude Forest from referencing its decision
to appeal the injunction. Forest performed the required outreach to those contacted in February
2014. O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶¶ 4-5. The State of New York was unaware
of any failure by Allergan to conform with its communication obligations under the injunction
and affirmatively stated that Allergan fulfilled its obligations; Judge Sweet endorsed that
Allergan complied with these provisions in agreeing to dismiss the action. O’Shaughnessy Decl.
I Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov.
30, 2015) (ECF No. 96-1) at *3-4. And as this Court has repeatedly stated, the injunction
“blunted much of the success of Forest's ‘hard switch,’” Sergeants Benevolent Ass’n Health &
Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S. Dist. LEXIS 128349, at *30 (S.D.N.Y.
Sept. 13, 2016).
Further, Litvin Decl. Ex. 190 is dated June 26, 2013 — well before even Plaintiffs would
contend that any hard switch conduct was initiated, and contains no evidence contradicting the
communication plan articulated by Ms. Snyder.
Accordingly, since DPPs provide no evidence to dispute the fact, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
426. Forest sent caregivers, health care providers, long term care facilities, and health
plans over 900,000 communications alerting them of the injunction and the continued
availability of Namenda IR.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶ 5; Ex. 325, Snyder Dep. 114:20-11-
115:19; Ex. 302, FRX-AT-03983934; Ex. 303, FRX-AT-04287221; Ex. 304, FRX-AT-
04288492.
Response: Admitted in part, denied in part. Admitted that Forest sent over 900,000
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communications. Denied that those communications were limited to “alerting them of the
injunction and continued availability of Namenda IR.” As noted above, and as demonstrated in
O’Shaughnessy Decl. Exs. 302, 303, and 304, Forest tainted the majority of these
communications with the assertion that Forest was appealing the injunction to create fear,
uncertainty and doubt about the continued availability of Namenda IR. See Response to ¶¶ 397,
398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397-98, and 418. DPPs’ response consists of improper argument or a recitation
of different purported facts, but no evidentiary basis to contest the statement. Accordingly, the
fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Additionally, DPPs’ response does not provide any evidentiary basis to contest the statement, but
instead attempts to “contextualize or dispute the relevance of the statement,” which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
In particular, DPPs’ response stems from a misreading of the Snyder declaration.
O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶ 4 (“To comply with the injunction, Forest
compiled all of the communications sent as part of its February 2014 announcement in order to
ensure that the list of individuals and entities who received the announcement of the injunction
mirrored those who received the February 2014 announcement.”). Similarly, the exact language
of Judge Sweet’s injunction required Forest to “inform healthcare providers, pharmacists,
patients, caregivers, and health plans of this injunction . . . and the continued availability of
Namenda IR in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. I Ex.
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440
288, FRX-AT-01747641 at 7641-2 (emphasis added). Judge Sweet’s injunction did not require
Forest to exactly duplicate all forms of communication to all those potentially affected by any
communication with Forest, nor did the injunction preclude Forest from referencing its decision
to appeal the injunction. Forest performed the required outreach to those contacted in February
2014. O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶¶ 4-5. The State of New York was unaware
of any failure by Allergan to conform with its communication obligations under the injunction
and affirmatively stated that Allergan fulfilled its obligations; Judge Sweet endorsed that
Allergan complied with these provisions in agreeing to dismiss the action. O’Shaughnessy Decl.
Ex. 29,1 Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov.
30, 2015) (ECF No. 96-1) at *3-4. And as this Court has repeatedly stated, the injunction
“blunted much of the success of Forest's ‘hard switch,’” Sergeants Benevolent Ass’n Health &
Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S. Dist. LEXIS 128349, at *30 (S.D.N.Y.
Sept. 13, 2016). Further, Litvin Decl. Ex. 190 is dated June 26, 2013 — well before even
Plaintiffs would contend that any hard switch conduct was initiated, and contains no evidence
contradicting the communication plan articulated by Ms. Snyder.
Accordingly, since DPPs provide no evidence to dispute the fact, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
427. Forest updated its website for Namenda IR and Namenda XR to include a banner
message which alerted the website visitor of the court order and continued availability of
Namenda IR in a similar manner to the website announcements of the February 2014
withdrawal.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶ 5
Response: Admitted in part, denied in part. Admitted that Forest put a banner
message on its website. Denied that the banner was limited to alerting “the website visitor of the
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court order and continued availability of Namenda IR in a similar manner to the website
announcements of the February 2014 withdrawal.” As noted above, Forest tainted the majority of
these communications with the assertion that Forest was appealing the injunction to create fear,
uncertainty and doubt about the continued availability of Namenda IR. See Response to ¶¶ 397,
398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397-98, and 418. DPPs’ response consists of improper argument or a recitation
of different purported facts, but no evidentiary basis to contest the statement. Accordingly, the
fact should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
Additionally, DPPs’ response does not provide any evidentiary basis to contest the statement, but
instead attempts to “contextualize or dispute the relevance of the statement,” which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
In particular, DPPs’ response stems from a misreading of the Snyder declaration.
O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶ 4 (“To comply with the injunction, Forest
compiled all of the communications sent as part of its February 2014 announcement in order to
ensure that the list of individuals and entities who received the announcement of the injunction
mirrored those who received the February 2014 announcement.”). Similarly, the exact language
of Judge Sweet’s injunction required Forest to “inform healthcare providers, pharmacists,
patients, caregivers, and health plans of this injunction . . . and the continued availability of
Namenda IR in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. I Ex.
288, FRX-AT-01747641 at 7641-2 (emphasis added). Judge Sweet’s injunction did not require
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Forest to exactly duplicate all forms of communication to all those potentially affected by any
communication with Forest, nor did the injunction preclude Forest from referencing its decision
to appeal the injunction. Forest performed the required outreach to those contacted in February
2014. O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶¶ 4-5. The State of New York was unaware
of any failure by Allergan to conform with its communication obligations under the injunction
and affirmatively stated that Allergan fulfilled its obligations; Judge Sweet endorsed that
Allergan complied with these provisions in agreeing to dismiss the action. O’Shaughnessy Decl.
I Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov.
30, 2015) (ECF No. 96-1) at *3-4. And as this Court has repeatedly stated, the injunction
“blunted much of the success of Forest's ‘hard switch,’” Sergeants Benevolent Ass’n Health &
Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S. Dist. LEXIS 128349, at *30 (S.D.N.Y.
Sept. 13, 2016).
Further, Litvin Decl. Ex. 190 is dated June 26, 2013 — well before even Plaintiffs would
contend that any hard switch conduct was initiated, and contains no evidence contradicting the
communication plan articulated by Ms. Snyder.
Accordingly, since DPPs provide no evidence to dispute the fact, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
428. Forest issued a press release regarding the injunction, which was published in
various websites, in a substantially similar form as the February 2014 announcement.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶ 5
Public Document: December 11, 2014 Press Release from Actavis available at
https://www.allergan.com/investors/news/thomson-reuters/actavis-confirms-district-
court-ruling-to-require
Response: Admitted in part, denied in part. Admitted that Forest issued a press
release. Denied that it was in “substantially similar form as the February 2014 announcement”
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because it explicitly noted that Forest was appealing the injunction order. See December 11,
2014 Press Release from Actavis available at https://www.allergan.com/investors/news/thomson
reuters/actavis-confirms-district-court-ruling-to-require, (“Actavis confirmed that the Court has
set a hearing for Monday, December 15 on the scope of the injunction. The Company said that it
will immediately appeal the decision.”). See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397 and 398. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
In particular, DPPs’ response stems from a misreading of the Snyder declaration.
O’Shaughnessy Decl. I Ex. 290 , Snyder Decl. ¶ 4 (“To comply with the injunction, Forest
compiled all of the communications sent as part of its February 2014 announcement in order to
ensure that the list of individuals and entities who received the announcement of the injunction
mirrored those who received the February 2014 announcement.”) Similarly, the exact language
of Judge Sweet’s injunction required Forest to “inform healthcare providers, pharmacists,
patients, caregivers, and health plans of this injunction . . . and the continued availability of
Namenda IR in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. I Ex.
288, FRX-AT-01747641 at 7641-2 (emphasis added). Judge Sweet’s injunction did not require
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Forest to exactly duplicate all forms of communication to all those potentially affected by any
communication with Forest, nor did the injunction preclude Forest from referencing its decision
to appeal the injunction. Forest performed the required outreach to those contacted in February
2014. O’Shaughnessy Decl. I Ex. 290, Snyder Decl. ¶¶ 4-5. The State of New York was unaware
of any failure by Allergan to conform with its communication obligations under the injunction
and affirmatively stated that Allergan fulfilled its obligations; Judge Sweet endorsed that
Allergan complied with these provisions in agreeing to dismiss the action. O’Shaughnessy Decl.
I Ex. 291, Settlement Agreement, New York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov.
30, 2015) (ECF No. 96-1) at *3-4. And as this Court has repeatedly stated, the injunction
“blunted much of the success of Forest's ‘hard switch,’” Sergeants Benevolent Ass’n Health &
Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S. Dist. LEXIS 128349, at *30 (S.D.N.Y.
Sept. 13, 2016). Further, Litvin Decl. Ex. 190 is dated June 26, 2013 — well before even
Plaintiffs would contend that any hard switch conduct was initiated, and contains no evidence
contradicting the communication plan articulated by Ms. Snyder.
Accordingly, since DPPs provide no evidence to dispute the fact, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
429. Forest communicated with its sales representatives and managers about the
continued availability of Namenda IR.
Defendant’s Evidence: Ex. 325, Snyder Dep. 117-16-120:25; 139:13-25 (“Q. ... in the
context here of making, of communicating with physicians about the injunction, do you
know of any instances where sales representatives told physicians that Namenda
Immediate release would not be discontinued after the injunction? A. Yes. There were
definitely – sales representatives would have communicated that to physicians.”); Ex.
305, FRX-AT-03794674.
Response: Admitted in part, denied in part. Admitted that Forest communicated with
its sales representative and managers. Denied that the communication was limited to being about
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“the continued availability of Namenda IR.” Instead, these individuals were instructed to discuss
the appeal of the injunction. See O’Shaughnessy Decl. Ex. 325, Snyder Dep. at 120:14-17 (“I’m
providing factual information to our sales representatives we’re appealing this decision”). See
also Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397 and 398. Forest further objects to DPPs’ speculation about a supposed
instruction to sales representatives based on Ms. Snyder’s testimony discussing O’Shaughnessy
Decl. I Ex. 305, FRX-AT-03794674. Ms. Snyder’s message does not instruct sales
representatives to mention the appeal, noting only that “if you get questions about these letters or
the plans for IR, please communicate [that] Actavis plans to continue the sales for Namenda
tablets according to the court order” and requesting that sales representatives “please do not
speculate as to the outcome of the appeal or provide any additional comments on the legal
matters.” Id. (emphasis added).
DPPs’ response consists of improper argument or a recitation of different purported facts,
but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2). Furthermore, DPPs’ response merely attempts to “contextualize or dispute the
relevance of the statement,” but does not challenge any aspect of the statement itself, which is an
improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-
25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
430. Forest’s January 2015 announcements also mentioned the fact that Forest was
appealing the December 2014 Injunction, no plan or even proposal to discontinue supply of
Namenda IR was referenced together with the fact of Forest’s appeal.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶5; Ex. 325, Snyder Dep. 119:13-120:17;
Ex. 302, FRX-AT-03983934; Ex 303, FRX-AT-04287221; Ex. 304, FRX-AT-04288492.
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Response: Denied. There was no reason to include the discussion of the appeal other
than to create fear, uncertainty and doubt concerning the future availability of Namenda IR. See
O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶ 24. Defendants’ economist, Dr. Pierre-Yves
Cremieux, agreed that non-lawyers would understand the message of Forest’s appeal to mean
that Forest “disagree[d]” with the injunction and had decided to “go to a higher court to see
whether they can convince the higher court that, in fact the lower court’s decision was in error.”
Litvin Decl. Ex. 468, Cremieux Dep. (Oct. 20, 2017) at 13:4-21.. See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397 and 398. Dr. Berndt’s ipse dixit testimony, untethered to the evidence,
cannot create a genuine issue of fact sufficient to defeat summary judgment. Raskin v. Wyatt
Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report is not a talisman against summary
judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y.
1999) (holding that “expert testimony without a factual foundation cannot defeat a motion for
summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001). DPPs’ response thus consists of
improper argument or a recitation of different purported facts, but no evidentiary basis to contest
the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
431. The New York Attorney General confirmed that Forest had performed its
obligation to inform healthcare providers, pharmacists, patients, caregivers, and health plans of
the December 2014 Injunction and the continued availability of Namenda IR “in the same or
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substantially similar manner in which it announced in February 2014 the potential plan to
discontinue Namenda IR.”
Undisputed Record Evidence: Ex. 291, Settlement Agreement, New York. v. Actavis, plc,
No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 3.
Response: Denied. The statement is inadmissible hearsay. Thus, Defendants cite no
evidence that supports their contention and it is therefore denied. See Koch v. Town of
Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56 “places the initial burden on the moving
party to identify ‘those portions of the ‘pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, which it believes demonstrate the absence
of a genuine issue of material fact.’”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986)). Moreover, Forest did not “inform healthcare providers, pharmacists, patients,
caregivers, and health plans of the December 2014 Injunction and the continued availability of
Namenda IR ‘in the same or substantially similar manner in which it announced in February
2014 the potential plan to discontinue Namenda IR.’” See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397-98, and 418. DPPs’ response consists of improper argument or a recitation
of different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp.
3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response merely attempts to
“contextualize or dispute the relevance of the statement,” but does not challenge any aspect of
the statement itself, which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
K. Subsequent Announcements and the Settlement with the New York Attorney
General
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432. On December 16, 2014, Forest filed a notice of appeal with the Second Circuit
Court of Appeals.
Undisputed Record Evidence: Ex. 306, Notice of Appeal, New York v. Actavis, plc, No.
14-4624 (2d Cir. December 16, 2014) (ECF No. 1); Ex. 291, Settlement Agreement, New
York. v. Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 2.
Response: Admitted.
433. On May 22, 2015, the Second Circuit affirmed the District Court’s injunction.
Undisputed Record Evidence: Ex. 373, Order, New York v. Actavis, plc, No. 14-4624 (2d
Cir. May 22, 2015) (ECF No. 336); Ex. 291, Settlement Agreement, New York. v.
Actavis, plc, No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 2.
Response: Admitted.
434. Once Forest had lost its appeal, Forest circulated a press release stating the
following and confirming that Namenda IR will remain on the market: “While we are
disappointed by the Court’s decision to uphold this ruling, we intend to continue our strong
efforts to convey the significant benefits of NAMENDA XR® to physicians, patients and
caregivers,” said Brent Saunders, CEO and President of Actavis.
Defendants’ Evidence: Ex. 307, FRX-AT-03671360.
Public Document: May 22, 2015 Press Release from Actavis available at
https://www.allergan.com/investors/news/thomson-reuters/actavis-confirms-appeals-
court-ruling-requiring-co
Response: Admitted, but Forest also continued its public legal challenge to the
injunction, filing for rehearing in the Second Circuit on June 5, 2015, and then filing a petition
for certiorari with the U.S. Supreme Court on November 4, 2015. Litvin Decl. Ex. 485,
Cremieux Dep. (Oct. 20, 2107) at Dep. Exs. 12-13 (excerpt of Defendants-Appellants’ Petition
For Rehearing En Banc, State of New York ex rel. Schneiderman v. Actavis PLC, No. 14-4624
(2d Cir.), filed June 5, 2015 (ECF No. 363)) and Allergan (Forest) press release dated Nov. 25,
2015).
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Forest’s Objection: DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. Accordingly, the fact
should be deemed admitted. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
435. On November 4, 2015, Forest filed a petition for certiorari to the Supreme Court.
Undisputed Record Evidence: Ex. 291, Settlement Agreement, New York. v. Actavis, plc,
No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 2.
Response: Admitted.
436. On November 30, 2015, with the petition for certiorari still pending, Forest and
the NYAG entered into a settlement agreement.
Undisputed Record Evidence: Ex. 291, Settlement Agreement, New York. v. Actavis, plc,
No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 3 (indicating Forest
complied with the injunction and informed constitutes of Namenda IR’s continued
availability).
Response: Admitted in part, denied in part. Admitted that Forest settled. Denied that
“Forest complied with the injunction and informed constitutes of Namenda IR’s continued
availability.” See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 397 and 398. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp.
3d at 186 n.3. Additionally, DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted in full. Fed. R. Civ. P.
56(e)(2).
437. The NYAG and Forest agreed to dismiss, with prejudice, and release all claims,
including those relating to damages, in connection with the NYAG action.
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Undisputed Record Evidence: Ex. 291, Settlement Agreement, New York. v. Actavis, plc,
No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) at 4-6.
Response: Admitted.
L. Entry of Generic Namenda IR in July and October of 2015
438. The FDA approved ANDA 090048, Dr. Reddy’s Laboratories Inc., U.S. ANDA
for generic memantine on April 14, 2010.
Undisputed Evidence: Ex. 328, McCormick (DRL) Dep. 42:14-22.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
42.
Response: Admitted.
439. Dr. Reddy’s launched generic memantine on July 11, 2015.
Undisputed Record Evidence: Ex. 328, McCormick (DRL) Dep. 54:24-55:2.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
44.
Response: Admitted.
440. The FDA approved ANDA 090058, Sun ANDA for generic memantine, on May
5, 2010.
Undisputed Record Evidence: Ex. 308, SUN0007329; Ex. 330, Nadkarni (Sun) Dep.
47:25-48:3.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
97.
Response: Admitted.
441. Sun launched generic memantine on July 11, 2015.
Undisputed Record Evidence: Ex. 330, Nadkarni (Sun) Dep. 64:18-66:14.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
99.
Response: Admitted.
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442. The FDA approved ANDA 079225, Mylan’s ANDA for generic memantine, on
January 30, 2015.
Undisputed Record Evidence: Ex. 309, MYLMEMA_000028.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
70.
Response: Admitted.
443. Mylan launched generic memantine on July 11, 2015.
Undisputed Record Evidence: Ex. 355, Curia (Mylan) Dep. 56:10-13.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
72.
Response: Admitted.
444. The FDA approved ANDA 090041, Amneal’s ANDA for generic memantine, on
April 10, 2015.
Undisputed Record Evidence: Ex. 327, Gupta (Amneal) Dep. 61:13-62:15; Ex. 310
Gupta Ex. 7.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
28.
Response: Admitted.
445. Amneal launched generic memantine on July 11, 2015.
Undisputed Record Evidence: Ex. 327, Gupta (Amneal) Dep. 68:21-25.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three. Dkt. 147, ¶
30.
Response: Admitted.
446. The FDA approved ANDA 090051, Lupin’s ANDA for generic memantine, on
April 15, 2015.
Undisputed Record Evidence: Ex. 311, LPI-NMDA00004618.
Response: Admitted.
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447. Lupin launched generic memantine on July 13, 2015.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three at 13, Dkt.
147, ¶ 58.
Response: Undisputed.
448. The FDA approved ANDA 090073, Wockhardt’s ANDA for generic memantine,
on September 4, 2015.
Undisputed Record Evidence: Ex. 312, WOCKHARDT00000006; Ex. 351, Venkatesan
(Wockhardt) Dep. 51:2-5.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Wockhardt would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
449. Wockhardt launched generic memantine in November 2015.
Undisputed Record Evidence: Ex. 351, Venkatesan (Wockhardt) Dep. 72:15-18.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Wockhardt would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
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450. The FDA approved ANDA 200155, Torrent Pharma, Inc.’s (“Torrent”) ANDA
for generic memantine, on October 13, 2015.
Undisputed Record Evidence: Ex. 352, Gupta (Torrent) Dep. 20:24-21:3.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Torrent would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
451. Torrent launched generic memantine on December 9, 2015, or soon thereafter.
Undisputed Record Evidence: Ex. 352, Gupta (Torrent) Dep. 30:9-31:3.
Response: Plaintiffs object to and dispute this statement as irrelevant as Plaintiffs are
not attempting to prove Torrent would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
452. The FDA approved ANDA 090052, Teva’s ANDA for generic memantine, on
October 25, 2011.
Undisputed Record Evidence: Ex. 313, TEVANIR-00000459.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
111.
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Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Teva would have come to the market earlier in the but-for world. Otherwise,
the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
453. Teva did not launch a generic memantine product under ANDA 090052.
Undisputed Record Evidence: Ex. 350, Cavanaugh (Teva) Dep. 72:25-73:11.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Teva would have come to the market earlier in the but-for world. Otherwise,
the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
454. The FDA approved ANDA 090044, Orchid’s ANDA for generic memantine, on
March 12, 2012.
Undisputed Record Evidence: Ex. 204, ORGENUS0005365.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147, ¶
84.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Orchid would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
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Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
455. Orchid did not launch a generic memantine product.
Undisputed Record Evidence: Ex. 334, Wilk (Orgenus) Dep. 160:9-161:13.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Orchid would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
456. Apotex Inc. and Apotex Corp. (collectively “Apotex”) filed ANDA 90-244 on
January 11, 2008 and received tentative approval on May 1, 2012.
Undisputed Record Evidence: Ex. 205, Decl. of Kiran Krishnan (May 24, 2017), ¶¶ 2, 5.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Apotex would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2)
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456
457. Apotex has not yet obtained final FDA approval of ANDA 90-244 for generic
memantine.
Undisputed Record Evidence: Ex. 205, Decl. of Kiran Krishnan (May 24, 2017), ¶ 5.
Response: Plaintiffs object to this statement as irrelevant as Plaintiffs are not
attempting to prove Apotex would have come to the market earlier in the but-for world.
Otherwise, the Plaintiffs admit this statement.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
M. No Way to Identify if Any Patients Switched Because of the February 2014
Announcement
458. Plaintiffs have no evidence that any “certain patients” switched as a result of the
February 2014 announcement.
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 54:2-13 (“Q. Sir with all due
respect, we can discuss the appropriateness of the methodology but for the moment, all
we’re trying to do is understand the methodology itself and how it works. So my next
question is, you testified that your model is not designed to understand specific
patient behavior, I believe is the language you used. Did I understand that correctly?
A. You’d have to read back my exact words but I think that’s a fair summary or
characterization of my view on it, yes.”) (emphasis added), 187:3-188:13 (describing
such an analysis of patient decisions as “not the right analysis to do”); see also Ex. 349,
Berndt Dep. 185:22-193:10 (“Q. And it’s fair to say you haven’t done any sort of
regression or econometric model to look at other potential market events to deduce
whether or not it was only favorable placement on Optum’s formulary and the
announcement of the planned withdrawal that caused increased conversion in early 2014;
is that fair? A. I have not undertaken any econometric analysis.”), 201:22-202:2 (“Q. ...
Am I right you’ve done no quantitative assessment of the effect of the post-injunction
real-world conversion rates in this case; is that right? A. That is correct.”).
Response: This contention is irrelevant and no response is required. By way of
further response, it is denied. As Dr. Russell Lamb explained, “an analysis of patient switching is
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irrelevant to the question of whether proposed Class members who are direct purchasers, not
patients, were injured by Defendants’ challenged conduct.” O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶¶ 29, 79; see also id. ¶¶ 76-87 (explaining why tracing economic effects at the
patient level is inappropriate). Forest itself has explained that: “Forest deals with wholesalers,
not patients.” Litvin Decl. Ex. 486, Cremieux Dep. (Oct. 20, 2017), at Dep. Ex. 11 at 13 (excerpt
of Reply Br. of Defendants-Appellants, State of New York ex rel. Schneiderman v. Actavis PLC,
No. 14-4624 (2d Cir.), filed Feb. 23, 2015 (ECF No. 275)). There is no requirement that direct
purchasers must trace the impact of the “hard switch” on individual patients. In its order granting
collateral estoppel in plaintiffs’ favor, this Court has already held (1) that Forest “possessed
monopoly power over the U.S. memantine market up until the entry of generic competition,” and
that (2) Forest’s hard switch was a “coercive and anticompetitive” act within this market. In re
Namenda Direct Purchaser Antitrust Litig., No. 15 Civ. 7488, 2017 WL 4358244, at *16
(S.D.N.Y. May 23, 2017). Thus, the marketwide nature of this disruption has been conclusively
established. Id. (the injunction “was an acknowledgment that Forest had already caused
anticompetitive injury to the memantine market that had to be rectified.”) (emphasis in original).
Forest’s conduct was directed to the entire market, not at specific purchasers or even to specific
benefit plans or physicians; and Forest utterly failed to rectify, and indeed exacerbated that injury
after the injunction. The class here consists not of patients, but of wholesalers and other direct
purchasers, each of whom serves broad portions of the memantine market. O’Shaughnessy Decl.
Ex. 193, Lamb Report ¶42. See also Litvin Decl. Ex. 487, Lamb (October 6, 2017) Dep. at 87:7-
14 (“The analysis I’ve done here is specific to this market... [W]e’re talking about a very large
volume of what I have already described as the excess XR sales in the actual versus the but-for
world ... those excess sales are going to be widespread across the class.”). These direct
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purchasers derive their demand for product through a series of links between patients and the
direct purchasers. Thus, while switching occurs at either the patient or pharmacy level, this is
ultimately reflected in the volumes and market share of Namenda IR, Namenda XR, and generic
Namenda IR purchased by the proposed class members, and the impact of the hard switch
strategy was to increase the conversion from Namenda IR to Namenda XR, which otherwise
would have been approximately 30% to over 50% at the time of generic entry. O’Shaughnessy
Decl. Ex. 193, Lamb Report ¶¶ 24-26, 151-60; see also Response to ¶ 386. Thus, tracing the
effects of a “hard switch” down to individual patients is unnecessary to establish impact upon
direct purchasers (on a classwide or individual basis) as a matter of law. See In re Warfarin
Sodium Antitrust Litigation, 214 F.3d 395 (3d Cir. 2000); Teva Pharm. USA, Inc. v. Abbott
Labs., 252 F.R.D. 213, 229-31 (D. Del. 2008). Thus, as Dr. Lamb concludes, because the
withdrawal announcement had a marketwide effect, the use of Forest’s own business planning
forecasts reveals the damages to the class. See O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶
86-138, 143-60; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 30-43.
Forest’s Objection: DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Furthermore, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Accordingly, the fact should be deemed admitted. Fed. R.
Civ. P. 56(e)(2).
To the extent that any further clarification is required as to the relevance of this fact,
Forest refers the Court to its ruling on Sept. 13, 2016:
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Plaintiffs have alleged an injury, because they allege that they were forced to pay for
certain patients' memantine treatment at brand-name prices because these patients
switched to Namenda XR prior to the entry of the injunction. Assuming Plaintiffs can
ultimately prove that these patients switched to Namenda XR because of the
announced withdrawal of Namenda IR, it is entirely irrelevant that the hard switch
never occurred and that Namenda XR was priced below Namenda IR prior to the
injunction. Plaintiffs' injury comes from having to pay for Namenda XR after generic
entry — when absent Defendants' anticompetitive conduct, their patients' prescriptions
would have been filled by a far cheaper generic (which, as Defendants state, was
available for less than 10% of the July Namenda IR price).
Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S.
Dist. LEXIS 128349, at* 38-39 (S.D.N.Y. Sept. 13, 2016) (emphasis added).
459. Dr. Lamb, Plaintiffs’ Damages Expert, stated that his model is not based on “an
analysis of an individual patient’s behavior” or “actual physician prescriptions.”
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 43:21-44:5 (“Q. Am I correct,
sir, that the NSP database does not track actual physician prescriptions to compile its
sales database? A. I believe that’s correct. I don’t believe that the NSP data is based on a
survey or census of physician scripts, prescriptions. It’s based – pardon me, just to clarify
my answer, it’s based on the movement of the product through the supply chain.”); see
also Ex. 349, Berndt Dep. 168:17-170:3 (“But you don’t have any evidence here of a
survey or otherwise of physicians and their habitual practices for prescribing Namenda
XR and Namenda IR; correct? A. That is correct. I don’t have any specific evidence
here”)
Defendants’ Evidence: Ex. 54, Fowdur Rep. ¶ 120 (explaining the role of patient
behavior in physician decision making) (“Professor Berndt’s research also concludes in a
different study that between 13% and 22% of prescription drug spending was attributable
to the effects of direct-to-consumer advertising. Similarly, in another paper, Professor
Berndt attests that 32% of patients who had seen advertising for a prescription drug in
2000 and 30% of patients in 2001 talked to their physician about the drug, and 13% of
patients indicated that their physician prescribed the drug that they asked about. Professor
Berndt also found evidence that direct-to-consumer advertising was associated with
increased initiation and appropriate duration of therapy.”).
Response: Denied. Dr. Lamb’s model accounts for patient and physician preferences.
Defendants have quoted out of context Dr. Lamb’s statement concerning actual physician
prescriptions and NSP data. However, because Dr. Lamb’s model is based in part upon Forest’s
forecasts, which were undertaken in the context of a detailed study of the market, patients,
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physicians, caregivers, managed care entities and other interested entities, Dr. Lamb’s model
does account for both physician prescriptions and patient behavior. See Response to ¶ 458.
Furthermore, Defendants cite inappropriate conclusions drawn by Dr. Fowdur from Dr. Berndt’s
study of Direct to Consumer (“DTC”) advertising. As Dr. Berndt opines, while a patient may
initiate a conversation with his or her physician about a typical drug, the common physician
response is to simply dispense physician’s most preferred treatment instead. O’Shaughnessy
Decl. Ex. 55, Berndt Reply ¶ 18. Namenda is in class of drugs different from those typically
subject to a DTC campaign, as patients are suffering from moderate to late stage Alzheimer’s,
and many are in Long Term Care facilities, and thus less likely to be influenced by DTC
advertising. Indeed, Forest surveyed physicians, pharmacists, and caregivers about its planned
switch to Namenda XR, but did not survey patients. See id.; see also Response to ¶ 458. Finally,
Dr. Lamb’s analysis concluded that the impact of the hard switch strategy was to increase the
conversion from Namenda IR to Namenda XR, which otherwise would have been approximately
30% to over 50% at the time of generic entry. O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶
151-60; see also Response to ¶ 386.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 386, 458. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
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To the extent that further support is required, at Dr. Lamb’s deposition from October 6,
2017, Dr. Lamb was asked whether “your model assumes that all actual Namenda XR days of
therapy above your but-for estimate consists of the anticompetitive hard switches at issue in this
case” to which Dr. Lamb responded that was “a fair way [to] characteriz[e] it.” O’Shaughnessy
Decl. II Ex. 396, Lamb (Oct. 6) Dep. 46:13-24. Dr. Lamb also acknowledged in his November
10 deposition, conducting any analysis of analogues or assumptions going into Forest’s models
“would have not been necessary or appropriate.” O’Shaughnessy Decl. II Ex. 395, Lamb (Nov.
10) Dep. 165:11-168:20. Dr. Lamb repeatedly admitted that he performed no surveys or
empirical analyses of whether physicians actually changed their prescribing practices as a result
of Forest’s conduct. O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep. 78:6-79:13; 79:16-
81:9; 120:1-121:4.
Additionally, DPPs’ selective citations to Dr. Berndt’s reply do not rebut Dr. Fowdur’s
testimony, which simply acknowledges possible impacts related to direct to consumer marketing
derived from Dr. Berndt’s own research–which Dr. Lamb did not consider. Dr. Berndt
acknowledges in the same paragraph that “DTC advertising could have some impact on
caregivers, who, derivatively, may have had interaction with their charge’s physician, which can
partially explain the increase in physician reports of discussion about Namenda and hits on the
Namenda website reported by Dr. Fowdur.” O’Shaughnessy Decl. I Ex. 55, Berndt Reply Rep. ¶
18. To the extent that DPPs’ believe there is some greater implication as to Dr. Fowdur’s
conclusions, such discussion is neither relevant here, nor permitted under Rule 56.1.
Moreover, Forest has moved to exclude the inadmissible opinions of Dr. Lamb and Dr.
Berndt regarding the use of forecasts to calculate Namenda IR market share in the but-for world.
Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of Dr. Ernst Berndt
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and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017. And the unsupported
ipse dixit opinion of DPPs’ purported experts cannot create an issue of fact sufficient to defeat
summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report
is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc,
69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony without a factual
foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001).
460. Nor did Plaintiffs Damages Expert rely on data that “measures demand for
prescription drugs including both what the provider prescribes in the retail setting and what is
ultimately dispensed to consumers across four unique channels.”
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 187:3-188:13 (noting that
analysis of physician prescriptions or patient switching is “not the right analysis to do”);
see also Ex. 364, Lamb (Nov. 10, 2017) Dep. 16:6-19:18 (discussing Ex. 206, Lamb Ex.
11), 54:7-15 (Dr. Lamb conceded that he did not undertake any investigation or analysis
of how many prescribing physicians had knowledge” of various financial calls or whether
they impacted prescribing behavior”); see also Ex. 56, Lamb Reply Report ¶¶ 29, 79 (“an
analysis of patient switching is irrelevant to the question of whether proposed Class
members who are direct purchasers, not patients, were injured by Defendants’ challenged
conduct.”), ¶¶ 85-87 (conceding that “physicians, not patients were a primary focus of
Forest’s efforts”);
Public Documents: Ex. 206, IMS, “NPA Data Brief” at *1 (“NPA is useful to
address a variety of research topics examining pharmaceuticals, especially
investigations that focus on prescription drug utilization, Rx size, average
consumption, and more than 90 prescriber specialty groupings representing over
170 specialties.”) (emphasis added).
Response: Denied. See Response to ¶ 458. By way of further response, as Dr. Lamb
concluded, the level of the market at issue is the wholesaler level rather than at the prescription
or dispensary level, as the class is comprised of direct purchasers. O’Shaughnessy Decl. Ex. 193,
Lamb Report ¶ 42; O’Shaughnessy Decl. Ex. 56, Lamb Reply ¶ 40. Analyzing the effects of
Defendants’ conduct by resort to prescription data specifically would thus not provide an
accurate measure of the impact on direct purchasers. O’Shaughnessy Decl. Ex. 193, Lamb
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Report ¶ 42; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶40. Dr. Lamb’s analysis relies
on Forest’s own forecasts, National Sales Perspectives data from IMS Health,5 and available data
from Forest and manufacturers of generic immediate-release memantine hydrochloride. These
sources provide information which indirectly measures effects at both the prescription and retail
dispensary levels. O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 145-60; O’Shaughnessy Decl.
Ex. 56, Lamb Reply Report ¶¶ 40-43. As Dr. Lamb testified: “measuring the effect of the hard
switch is taking account of the incremental conduct related to hard switch. The person that
you’re describing, the patient preference or physician preference is a person you would expect to
have switched under the conventional switch.... the reality is the kind of person you’re
describing, the physician or the patient who prefers some aspect of XR, Namenda XR would be
accounted for under the patients that switched in the but-for world in the soft switch strategy.”
O’Shaughnessy Decl. Ex. 363, Lamb (Oct. 6) Dep. at 57:12-58:11. See also O’Shaughnessy
Decl. Ex. 363, Lamb (Oct. 6, 2017) Dep. 59:12-18 (“So I would disagree with the premise of
your question that my damages analysis doesn’t account for the fact that there are some
physicians or patients who might have some preference for Namenda XR for whatever reason.”).
Direct purchasers operate on the principle of derived demand, purchasing those products
5 IMS National Sales Prescription (“NSP”) data has been called the “gold standard” for
prescription drug sales data in the United States. See In re Neurontin Mktg. & Sales Practices
Litig., No. 04-CV-10739-PBS, 2011 WL 3852254, at *32 (D. Mass. Aug. 31, 2011), aff’d, 712
F.3d 21 (1st Cir. 2013). See also In re Cardizem CD Antitrust Litig., 218 F.R.D. 508, 538 (E.D.
Mich. 2003) (referring to IMS Health, Inc. as “the recognized leader in data collection for the
pharmaceutical industry.”); In re Brand Name Prescription Drugs Antitrust Litig., No. 94 C 897,
1999 WL 639173, at *4 (N.D. Ill. Aug. 17, 1999) (IMS Health data analyzes sales information in
“an effective and cost-efficient manner” and there is “no reason exists not to utilize this data
when measuring the Class Plaintiffs’ damages.”); Johns Hopkins Bloomberg School of Public
Health, Center for Drug Safety and Effectiveness, (“The National Sales PerspectivesTM (NSP) is
considered the industry standard for measuring pharmaceutical spending.”), available at
https://www.jhsph.edu/research/centers-and-institutes/center-for-drug-safety-and-
effectiveness/research/data-assets/.
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demanded by their customers and are thus informed by patient and prescription demand.
O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 24-26, 42. Furthermore, what is inappropriate
here is the use by Defendants’ experts of National Prescription Audit (NPA) data. See, e.g.,
O’Shaughnessy Decl. Ex. 54, Fowdur Report ¶¶ 95 n.220, 129, 147 n.328, 173 n.365, App. A ¶¶
5-24. As Dr. Lamb explains, NPA data: (1) does not cover the entire memantine hydrochloride
market but only a subsection thereof, and (2) does not purport to measure purchases by members
of the proposed direct purchaser class and therefore measures the wrong level of the market. See
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶ 39. At her deposition. Dr. Fowdur admitted
that unlike NSP data, which reflects 100% of sales, the NPA data do not reflect 100% of
prescriptions. See Litvin Decl. Ex. 488, Fowdur (October 20, 2017) Dep. 122:23=123:7. In
contrast, IMS explains that NSP data is used to “monitor and assess national sales given its
accuracy representing 100% of the U.S. pharmaceutical sales market.” O’Shaughnessy Decl. Ex.
330, IMS, “HSRN Data Brief: National Sales Perspectives. See also O’Shaughnessy Decl. Ex.
193, Lamb Report ¶ 79 (IMS’s National Sales Perspectives database (“NSP”) “captures 100% of
the total U.S. pharmaceutical market, measuring sales at actual transaction prices and ‘monitors
every major class of trade and channel of distribution for prescription pharmaceuticals, over-the-
counter products and select, self-administered diagnostic products in the United States.’”); id. at
¶ 79 n.157 (“According to IMS, ‘[t]he IMS sales database is derived from the processing of more
than 1.5 billion transactions each year. These transactions reflect both direct sales from
approximately 100 pharmaceutical companies and indirect sales information from over 700
distribution centers. The universe of these direct and indirect sales are made to over 552
wholesalers, 223 drug and food chain warehouses, 5,793 non- federal hospitals and 334 federal
government and non-government mail service pharmacies.’” National Sales Perspectives Brief).
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Finally, Dr. Lamb’s analysis concluded that the impact of the hard switch strategy was to
increase the conversion from Namenda IR to Namenda XR, which otherwise would have been
approximately 30% to over 50% at the time of generic entry. O’Shaughnessy Decl. Ex. 193,
Lamb Report ¶¶ 151-60; see also Response to ¶ 386.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 386, 458. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
To the extent that further support is required, at Dr. Lamb’s deposition from October 6,
2017, Dr. Lamb was asked whether “your model assumes that all actual Namenda XR days of
therapy above your but-for estimate consists of the anticompetitive hard switches at issue in this
case” to which Dr. Lamb responded that was “a fair way [to] characteriz[e] it.” O’Shaughnessy
Decl. II Ex.396, Lamb (Oct. 6) Dep. 46:13-24. Moreover, as Dr. Lamb acknowledged in his
November 10 deposition, conducting any analysis of analogues or assumptions going into
Forest’s models “would have not been necessary or appropriate.” O’Shaughnessy Decl. II Ex.
395 Lamb (Nov. 10) Dep. 165:11-168:20.
Moreover, Forest has moved to exclude the inadmissible opinions of Dr. Lamb and Dr.
Berndt regarding the use of forecasts to calculate Namenda IR market share in the but-for world.
Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of Dr. Ernst Berndt
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and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017. And the unsupported
ipse dixit opinion of DPPs’ purported experts cannot create an issue of fact sufficient to defeat
summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report
is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc,
69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony without a factual
foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001).
461. Instead, Plaintiffs Damages Expert conceded that his model relies on NSP data
which monitors “the movement of the product through the supply chain.”
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 43:21-44:5.
Response: It is admitted that Dr. Lamb used NSP and manufacturer data which
measured market effects at the direct purchaser level, which corresponds to the proposed class
here. As direct purchasers make acquisitions based on the demand derived from the market, such
data also reflect shifts in prescriptions and dispensation of prescription pharmaceuticals. Indeed,
such data is the only way to measure damages to the proposed class appropriately, which is
comprised of direct purchasers. However, such data also mirrors movements between Namenda
XR and Namenda IR at the prescription and patient level, as direct purchasers’ acquisitions are a
function of demand derived from downstream customers, which are in turn driven by
prescriptions and dispensation of pharmaceutical products. See Response to ¶ 458. It is denied
that Dr. Lamb relies solely upon NSP data. In fact, Dr. Lamb’s model also relies upon Forest’s
internal forecasting documents and other internal documents discussing the market for Namenda
and Forest’s projections of conversion. See Response to ¶ 386.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 386, 458. DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
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which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
462. Plaintiffs’ damages model is unable to discern changes in patient or prescriber
behavior and cannot account for individual’s switching decisions.
Plaintiffs Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 56:7-21 (“Q: I think I
understand you testimony. So in attempting in your methodology to assess the intended
effect of the alleged hard switch at the market level, it’s possible that your damages
calculation includes sales of XR to patients who simply prefer a once-a-day formulation.
That’s possible. Correct? A. I think that’s possible. I have some – I think it’s possible.
I’m not sure what the relevance of it is for understanding how the product moved
through the supply chain.”), 187:10-188:13 (explaining that his damages
calculation is “not an analysis of patient scripts or patient behavior directly.
That’s a – that’s not the right analysis to do.”).
Response: Denied. Defendants mischaracterize the testimony of Dr. Lamb. As Dr.
Lamb later explained in response to the same line of questioning, his damages model did indeed
account for patient and prescriber behavior:
The person that you’re describing, the patient preference or physician preference
is a person you would expect to have switched under the conventional switch. In
other words, the conventional switch accounts for that kind, exactly that kind of
behavior ... the reality is the kind of person you’re describing, the physician or the
patient who prefers some aspect of XR, Namenda XR would be accounted for
under the patients that switched in the but-for world in the soft switch strategy.
O’Shaughnessy Decl. Ex. 363, Lamb (Oct. 6, 2017) Dep. 57:21-58:11. After repeated
attempts by the examiner to mischaracterize his testimony, Dr. Lamb bluntly refuted
Defendants’ assertion stating “So I would disagree with the premise of your question that
my damages analysis doesn’t account for the fact that there are some physicians or patients
who might have some preference for Namenda XR for whatever reason.” O’Shaughnessy
Decl. Ex. 363, Lamb (Oct. 6, 2017) Dep. At 59:12-18.
By way of further response, Plaintiffs note that changes in “patient or prescriber
behavior” and/or various “switching decisions” were already accounted for in Defendants’ own
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forecasts predicting the expected effects on Namenda sales with and without the “hard switch
strategy.” As Dr. Berndt explains, Forest prepared detailed forecasts and projects to model the
expected conversion of patients and prescriptions from Namenda IR to Namenda XR, which was
based on market research including surveys of physicians, caregivers, care managers, and
pharmacists. O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 25-26 & n.31; O’Shaughnessy
Decl. Ex. 55, Berndt Reply Report ¶¶ 15-20. Those surveys reflected many concerns that
switching patients was not warranted nor in the patient’s best interests. See Response to ¶ 359.
Forest also studied analogous situations in which a brand company introduced a new extended-
release version of a pharmaceutical into the market as a line extension to an existing immediate
release product, and Forest concluded that those analogous situations would be useful in trying to
accurately project the likely acceptance of Namenda XR over Namenda IR. O’Shaughnessy
Decl. Ex. 231, Berndt Report ¶ 27. See also Responses to ¶¶ 458-61.
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 359, 458-461. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
To the extent that further support is required, at Dr. Lamb’s deposition from October 7,
2017, Dr. Lamb was asked whether “your model assumes that all actual Namenda XR days of
therapy above your but-for estimate consists of the anticompetitive hard switches at issue in this
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case” to which Dr. Lamb responded that was “a fair way [to] characteriz[e] it.” O’Shaughnessy
Decl. II Ex. 396, Lamb (Oct. 6) Dep. 46:13-24 (emphasis added) Moreover, as Dr. Lamb
acknowledged in his November 10 deposition, conducting any analysis of analogues or
assumptions going into Forest’s models “would have not been necessary or appropriate.”
O’Shaughnessy Decl. II Ex. 395 Lamb (Nov. 10) Dep. 165:11-168:20. Dr. Lamb repeatedly
admitted that he performed no surveys or empirical analyses of whether physicians actually
changed their prescribing practices as a result of Forest’s conduct. O’Shaughnessy Decl. II Ex.
395, Lamb (Nov. 10, 2017) Dep. 78:6-79:13; 79:16-81:9; 120:1-121:4.
Moreover, Forest has moved to exclude the inadmissible opinions of Dr. Lamb and Dr.
Berndt regarding the use of forecasts to calculate Namenda IR market share in the but-for world.
Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of Dr. Ernst Berndt
and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017. And the unsupported
ipse dixit opinion of DPPs’ purported experts cannot create an issue of fact sufficient to defeat
summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report
is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc,
69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony without a factual
foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001).
463. Dr. Lamb stated that in his opinion, it was “not appropriate or necessary to look”
at physician or patient preferences in this case or base an analysis of an “individual patient
decision.”
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 51:20-56:5, 56:23-58:11.
Response: Denied. Dr. Lamb’s methodology already incorporated analysis of
physician and patient preferences as it was based on market data regarding sales and Forest’s
own studies and forecasts of the market, which took into account preferences of physicians and
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caregivers. See Response to ¶ 462; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 30-36.
Indeed, as Dr. Berndt observed, Forest’s forecasts and analyses had already extensively
incorporated Forest’s studies of physician and caregiver preferences, and such preferences were
thus built into Forest’s forecasts. Therefore, there was no need to further examine physician or
patient preferences beyond the analysis already conducted. See Response to ¶ 462. Moreover, as
Dr. Lamb explained, his damage analysis revealed the effect of the challenged conduct on direct
purchasers, as the class is comprised of direct purchasers and not patients, and that analysis is
more appropriately done at the market level. See O’Shaughnessy Decl. Ex. 363, Lamb (Oct. 6,
2017) Dep. at 54:25-56:5 (“I’m trying to understand the effect of the alleged misconduct, the
challenged conduct on the market, on the sales of memantine hydrochloride whether in brand
form or generic, and in understanding that and understanding the effect of the challenged
conduct with respect to that, the appropriate analysis is at the market level, the intended effect of
the challenged conduct is at the market level. As we discussed a moment ago, for example, I’ve
looked at Forest on forecasts of the effect of different switch strategies, conventional switch
versus hard switch. That analysis is conducted, just as my analysis is, at the market level. So it’s
not necessary nor appropriate to think of the intended effect at the patient level in measuring
aggregate class-wide damages for this class, this proposed class. As you know, this proposed
class is not patients. So I haven’t attempted to break that out, the new to therapy memantine
hydrochloride patient or an existing memantine hydrochloride patient, because it’s really not
relevant for understanding class-wide damages.”).
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 386, 458-462. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
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at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
To the extent that further support is required, at Dr. Lamb’s deposition from October 7,
2017, Dr. Lamb was asked whether “your model assumes that all actual Namenda XR days of
therapy above your but-for estimate consists of the anticompetitive hard switches at issue in this
case” to which Dr. Lamb responded that was “a fair way [to] characteriz[e] it.” O’Shaughnessy
Decl. II Ex. 396, Lamb (Oct. 6) Dep. 46:13-24 (emphasis added). Moreover, as Dr. Lamb
acknowledged in his November 10 deposition, conducting any analysis of analogues or
assumptions going into Forest’s models “would have not been necessary or appropriate.”
O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep. 165:11-168:20. Dr. Lamb repeatedly
admitted that he performed no surveys or empirical analyses of whether physicians actually
changed their prescribing practices as a result of Forest’s conduct. O’Shaughnessy Decl. II Ex.
395, Lamb (Nov. 10) Dep. 78:6-79:13; 79:16-80:2; 120:10-15.
Moreover, Forest has moved to exclude the inadmissible opinions of Dr. Lamb and Dr.
Berndt regarding the use of forecasts to calculate Namenda IR market share in the but-for world.
Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of Dr. Ernst Berndt
and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017. And the unsupported
ipse dixit opinion of DPPs’ purported experts cannot create an issue of fact sufficient to defeat
summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report
is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc,
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69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony without a factual
foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001).
N. No Way to Know if Patients Switched to Namenda XR for Other Reasons,
Including Lower Price, Formulary Placement, or Product Convenience
464. Further, Plaintiffs have no evidence as to what portion of patients who converted
to Namenda XR did so as a result of the announced withdrawal, as opposed to other reasons.
Plaintiffs Depositions: Ex. 349, Berndt Dep. 184:16-187:7 (conceding that the
announcement was not the “sole cause” of patient switching); see also Ex. 363, Lamb
(Oct. 6, 2017) Dep. 56:7-21 (“Q: I think I understand you testimony. So in attempting in
your methodology to assess the intended effect of the alleged hard switch at the market
level, it’s possible that your damages calculation includes sales of XR to patients who
simply prefer a once-a-day formulation. That’s possible. Correct? A. I think that’s
possible. I have some – I think it’s possible. I’m not sure what the relevance of it is for
understanding how the product moved through the supply chain.”), 158:8-165:14
(distinguishing various conducts Forest undertook as part of its Namenda XR launch
between “soft switch” tactics and conduct undertaken as part of a “hard switch
strategy.”).
Response: Denied. As this Court held in its summary judgment opinion granting
plaintiffs estoppel:
Both Judge Sweet and the Second Circuit concluded that the result of the
hard switch would be that a “significantly higher” number of patients would
convert from Namenda IR to Namenda XR than if Forest had not attempted
to pull Namenda IR from the market. Namenda I, 2014 WL 7015198, at *28;
id. at *39 (hard switch would result in “inflation of [Namenda] XR’s share of the
memantine market”); see also Namenda II, 787 F.3d at 655 (holding that Forest’s
hard switch “has the effect of significantly reducing usage of rivals’ products”
(quoting Microsoft, 253 F.3d at 65)). Forest’s own internal projections estimated
that, using only soft-switch tactics, only 30% of Namenda IR patients would
voluntarily switch to Namenda XR. Namenda I, Unredacted Op. at 80. Under a
hard-switch strategy, that percentage skyrocketed to 80%-100%. Id.
***
Importantly, Judge Sweet found that Forest’s hard-switch tactics had already
resulted in more customers converting from Namenda IR to Namenda XR than
Forest had estimated would convert voluntarily. At the time the preliminary
injunction was entered, “about 50% of existing patients [had] converted from
Namenda IR to Namenda XR in anticipation of the lack of availability of
Namenda IR.” Namenda I, 2014 WL 7015198, at *29. This is significantly
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more than the 30% that Forest had estimated would convert if only soft-
switch tactics were employed.
In re Namenda Direct Purchaser Antitrust Litig., No. 15 Civ. 7488 (CM), slip op. at 24-25
(May 23, 2017) (unredacted version) (emphasis added). See also O’Shaughnessy Decl. Ex. 6,
Unredacted Sweet Op. at ¶¶ 134, 142, & p.117. These findings are binding on Defendants
here.
The record in this case amplifies on these prior judicial findings. The majority of
Defendants’ internal analyses prepared before the decision in mid-October 2013 to initiate the
hard-switch strategy projected that without the hard switch, Defendants would gain between
18.67% and 40% of the market. As reflected in the Berndt Reply Report, Revised Exhibit D,
which compiled the predicted Namenda conversion rates without a hard switch from Forest’s
forecasts:
(1) Eighteen forecasts predicted 30% or less conversion:
Litvin Decl. Ex. 146, FRX-AT-03716706 (“Namenda XR Forecast_ 1222013” (30%));
Litvin Decl. Ex. 494, FRX-AT-01604019 (“Namenda Working Forecast LE4 0124 v2” (30%));
Litvin Decl. Ex. 504, FRX-AT-01671063 (“Namenda Working Forecast LE4 030513” (18.67%);
Litvin Decl. Ex. 500, FRX-AT-01649318 (“Namenda XR forecast_031113” (24%)); Litvin Decl.
Ex. 28, FRX-AT-01604399 (“Namenda Working Forecast LE4 FINAL 031913” (28%)); Litvin
Decl. Ex. 503, FRX-AT-01671042 (“Namenda Working Forecast LE1 042513” (28%)); Litvin
Decl. Ex. 501, FRX-AT-01649808 (“Namenda XR forecast_050113” (30%)); Litvin Decl. Ex.
497, FRX-AT-01609806 (“Namenda forecast_061413” (30%)); O’Shaughnessy Decl. Ex. 268,
FRX-AT-01642799 (“Namenda forecast_090613” (26%)); O’Shaughnessy Decl. Ex. 269, FRX-
AT-01592880 (“Namenda forecast_091113” (22%)); O’Shaughnessy Decl. Ex. 270, FRX-AT-
01644132 (“Namenda forecast_091613” (30%)); O’Shaughnessy Decl. Ex. 271, FRX-AT-
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01616631 (“Namenda forecast_092713” (29%)); O’Shaughnessy Decl. Ex. 273, FRX-AT-
01617447 (“Namenda forecast_093013 ef2” (30%)); O’Shaughnessy Decl. Ex. 272, FRX-AT-
01655656 (“Namenda forecast_093013” (29%)); O’Shaughnessy Decl. Ex. 274, FRX-AT-
03724272 (“Namenda forecast_100313” (29%)); O’Shaughnessy Decl. Ex. 276, FRX-AT-
03724325 (“Namenda production forecast_10042013” (30%)); O’Shaughnessy Decl. Ex. 277,
FRX-AT-01639601 (“Namenda production forecast_10072013 v2” (30%)); O’Shaughnessy
Decl. Ex. 278, FRX-AT-03600941 (“Namenda production forecast_10082013 v3” (30%));
(2) Thirteen forecasts predicted 31-39% conversion:
Litvin Decl. Ex. 498, FRX-AT-01641216 (“Namenda XR forecast_11302012 _BM
Assumptions” (34%)); Litvin Decl. Ex. 502, FRX-AT-01651403 (Namenda XR
forecast_1182013” (34%)); Litvin Decl. Ex. 493, FRX-AT-01604015 (“Revised XR FDC
forecast new” (b28, h35%)); Litvin Decl. Ex. 495, FRX-AT-01604141 (“Revised XR FDC
forecast 3-6-13” (b33, h35%)); Litvin Decl. Ex. 492, FRX-AT-01602965 (“Revised XR FDC
forecast” (b33, h35%)); O’Shaughnessy Decl. Ex. 245, FRX-AT-01671038 (“Namenda Working
Forecast LE4 FINAL 040313 FDC Scenario 2” (37.3%)); Litvin Decl. Ex. 489, FRX-AT-
01595333 (“Namenda forecast_062613” (33%)); Litvin Decl. Ex. 491, FRX-AT-01601379
(“Namenda forecast_ 080213” (33%)); Litvin Decl. Ex. 505, FRX-AT-01751858 (“PX161 -
2013.8 Namenda Forecast (01628161)” (33%)); Litvin Decl. Ex. 499, FRX-AT-01646209
(“Namenda forecast_080213” (33%)); Litvin Decl. Ex. 506, FRX-AT-03768540 (“Namenda
forecast_082013” (33%)); Litvin Decl. Ex. 490, FRX-AT-01595850 (“Namenda Working
Forecast LE2_090513 FINAL” (37.3%)); O’Shaughnessy Decl. Ex. 233, FRX-AT-01671051
(“Namenda Working Forecast LE3 100213” (37.3%));
(3) Seven forecasts predicted 40% conversion:
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O’Shaughnessy Decl. Ex. 267, FRX-AT-01774559 (“PX63 – Copy of Frx-Ny-01581722”
( 40%)); Litvin Decl. Ex. 496, FRX-AT-01607876 (“5 Yr Plan With Upside Scenario Marketing
4-12-13” (b30, h40%)); O’Shaughnessy Decl. Ex. 246, FRX-AT-01671046 (“Namenda Working
Forecast LE1 061313 PedExt” (40%)); O’Shaughnessy Decl. Ex. 248, FRX-AT-01752159
(“PX76 - Copy of FRX-NY-01639146 (full namenda model)” (40%)); O’Shaughnessy Decl. Ex.
239, FRX-AT-01612936 (“Namenda production forecast_10082013 v3 LOE Apr18” (40%));
O’Shaughnessy Decl. Ex. 244, FRX-AT-03769058 (“Namenda production
forecast_10152013_Flex XR LOE” (40%)); O’Shaughnessy Decl. Ex. 247, FRX-AT-03725539
(“Namenda production forecast_10292013_Flex XR LOE” (40%)). See also O’Shaughnessy
Decl. Ex. 193, Lamb Report ¶¶ 87, 90-92, 143-60; O’Shaughnessy Decl. Ex. 56, Lamb Reply
Report ¶¶ 19, 30-43. As computed by Dr. Berndt, these forecasts yield an average expected
Namenda XR conversion rate between 28% and 33%, depending on the statistical average used
(mode, median, or mean), the expected date generic entry within the forecast, and whether one
includes only forecasts generated closer to the February 14, 2014 switch announcement or
whether all forecasts are included:
O’Shaughnessy Decl. Ex. 55, Berndt Reply Report Exhibit D. See generally O’Shaughnessy
Decl. Ex. 231, Berndt Report ¶¶ 25-55; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶152,
Table 3 (computing average Namenda XR conversion rate contained in group of forecasts).
Dr. Lamb explains that “internal Forest documents and testimony demonstrate that Forest
studied and forecasted the effect a conventional switch (also known as a soft switch) or hard
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switch would have on the Namenda franchise” and that he “relied on Forest’s own documents to
determine a but-for conversion rate from Namenda IR to Namenda XR that is consistent with
Forest’s own predictions of Namenda XR conversion absent the Hard Switch.” O’Shaughnessy
Decl. Ex. 193, Lamb Report ¶ 150. And, Forest was well-aware that the mere announcement of
the hard switch would accelerate the conversion from Namenda IR to Namenda XR. Litvin Decl.
Ex. 148, FRX-AT-03724244-48 at 44 (October 2, 2013 email from Lei Meng noting with respect
to updating a Namenda forecast, “I have IR to XR conversion accelerating two-fold following
the announcement of withdrawal. I think acceleration will definitely happen but the exact
magnitude is difficult to predict.”). The attached spreadsheet includes an “Acceleration factor
post withdrawal announcement” (see Litvin Decl. Ex. 149, FRX-AT-03724248, “Namenda
Monthly_Withdrawal” tab) and quantifies the “acceleration” expected. The tab “Namenda
Monthly_Withdrawal” shows the expected monthly IR/XR conversion percentage jumping, for
example, from 8% in October 2013, 9% in November 2013 and 11% in December 2013, all
before the assumed January 2014 withdrawal announcement, to 16%, 21% and then 25% in
January, February and March 2014, respectively, after the announcement (assumed, in this
document, to occur in January 2014); see also Litvin Decl. Ex. 36, FRX-AT-01609612 (October
4, 2013 email from Lei Meng, attaching similar spreadsheet incorporating an “Acceleration
factor post withdrawal announcement”) (see O’Shaughnessy Decl. Ex. 274, FRX-AT-03724272
“Namenda Monthly_withdrawal” tab, row 14); Litvin Decl. Ex. 98, FRX-AT-01775352-53
(“Namenda Disruption Scenarios”: chart shows that the trendline of prescriptions dramatically
shifts negatively for Namenda IR and positively for Namenda XR after “Discontinuation
announcement”); Forest’s forecasts explicitly recognize the impact of the announcement,
assuming an “acceleration factor” in the projections of the “withdrawal scenario.” See. e.g.,
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O’Shaughnessy Decl. Ex. 236, FRX-AT-03727191 at 0002 (Namenda production
forecast_10292013_Flex XR LOE 120213) (assuming “[a]cceleration factor post withdrawal
announcement” in the “Namenda Monthly Withdrawal” tab); O’Shaughnessy Decl. Ex. 238,
FRX-AT-01639598 at 0005 (Namenda production forecast_10082013 v3 LOE Jan17) (same);
O’Shaughnessy Decl. Ex. 241, FRX-AT-01608706 at 0003 (Namenda production
forecast_10152013_Flex XR LOE) (same); O’Shaughnessy Decl. Ex. 269, FRX-AT-01592880
at 0002 (Namenda forecast_091113) (same); O’Shaughnessy Decl. Ex. 271, FRX-AT-01616631
at 0008 (Namenda forecast_092713) (same); O’Shaughnessy Decl. Ex. 273, FRX-AT-01617447
at 0005 (Namenda forecast_093013 ef2) (same); Litvin Decl. Ex. 93, FRX-AT-01775264-301
(Namenda IR & XR Conversion Plan October 2013, slides 35 and 37 chart shows that the
trendline of prescriptions dramatically shifts negatively for Namenda IR and positively for
Namenda XR after “Discontinuation announcement”); id. at ’76 (noting 3-6 months advance
notice would be helpful for pharmacists to ensure Namenda patients are informed when they
come in to refill their prescriptions, and noting “It also suggests that the transition will start upon
the announcement”).
Forest’s Objection: Forest hereby incorporates by reference its objections to DPPs’
responses to ¶¶ 458-62. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25.
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Moreover, Forest objects to the DPPs’ assertion that the above quotation from the Court’s
summary judgment order has preclusive effects as to the issue of causation and damages, as
DPPs’ did not seek collateral estoppel on the issue of causation or damages during the original
briefing on summary judgment.
To the extent that any further clarification is required as to the relevance of this fact,
Forest refers the Court to its ruling on Sept. 13, 2016:
Plaintiffs have alleged an injury, because they allege that they were forced to pay for
certain patients' memantine treatment at brand-name prices because these patients
switched to Namenda XR prior to the entry of the injunction. Assuming Plaintiffs can
ultimately prove that these patients switched to Namenda XR because of the
announced withdrawal of Namenda IR, it is entirely irrelevant that the hard switch
never occurred and that Namenda XR was priced below Namenda IR prior to the
injunction. Plaintiffs' injury comes from having to pay for Namenda XR after generic
entry — when absent Defendants' anticompetitive conduct, their patients' prescriptions
would have been filled by a far cheaper generic (which, as Defendants state, was
available for less than 10% of the July Namenda IR price).
Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S.
Dist. LEXIS 128349, at* 38-39 (S.D.N.Y. Sept. 13, 2016) (emphasis added).
DPPs’ long summary of Forest forecasts and predicitions about the announcement only
highlights that there were a range of estimates of conversion under the conventional (no hard
switch) scenario. It was incumbent on DPPs and their experts to assess what happened in the
real world and determine the effect on conversion (if any) of the announcement. They simply
made no effort to do so, and thus there is no evidence of what percentage patients (if any)
switched because of the announcement in the real world, and did not switch back prior to patent
expiration. Moreover, DPPs undertook no effort to decouple any effects from various “soft
switch” efforts undertaken by Forest coincident to the withdrawal announcement and subsequent
to the injunction, including a $120 million sales force expansion and a multi-million dollar
multimedia advertising campaign. . See, e.g., Litvin Decl. Ex. 77, FRX-AT-01747623 at 625, ¶
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10; Litvin Decl. Ex. 112, FRX-AT-01829171 at 171-73 (Actavis memo to “All U.S. Employees”
regarding the DTC campaign); Litvin Decl. Ex. 198, FRX-AT-04363541at 541-48 (Dec. 30,
2014 email string regarding advertising for the DTC campaign); Litvin Decl. Ex. 182, FRX-AT-
04051660 at 61 (Dec. 12, 2014 memo from Meury and others to the “U.S. Commercial Team”).
Furthermore, Forest has moved to exclude the inadmissible opinions of Dr. Lamb and Dr.
Berndt regarding the use of forecasts to calculate Namenda IR market share in the but-for world.
Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and Testimony of Dr. Ernst Berndt
and Dr. Russell Lamb Regarding Forecast Averages, dated Nov. 17, 2017. And the unsupported
ipse dixit opinion of DPPs’ purported experts cannot create an issue of fact sufficient to defeat
summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir. 1997) (“[A]n expert’s report
is not a talisman against summary judgment.”); Virgin Atl. Airways Ltd. v. British Airways plc,
69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that “expert testimony without a factual
foundation cannot defeat a motion for summary judgment”), aff’d 257 F.3d 256 (2d Cir. 2001).
Lastly, to the extent that the evidence DPP’s relied upon discusses the possibility of
actual withdrawal, Forest objects to those assertions as irrelevant. Fed. R. Evid. 402. As this
Court has reiterated, “Forest agreed to leave Namenda IR on the market through July 2015,”
Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis PLC, No. 15-06549, 2016 U.S.
Dist. LEXIS 128349, at *23 (S.D.N.Y. Sept. 13, 2016), and actual withdrawal never took place.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
465. For example, doctors in the prior action testified that once-a-day dosing results in
“greater compliance with treatment,” “improved tolerability ... reduced total treatment costs, and
better long-term clinical outcomes.”
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op. at ¶¶ 46-47.
Response: Admitted in part and denied in part. It is admitted Dr. Bruce Kohrman
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(whom Judge Sweet described as “Defendants’ medical expert”) and another doctor offered
testimony in the New York Attorney General action to the effect that “[f]ewer pills generally
lead to greater compliance with treatment.” O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op.
at ¶¶ 46. It is admitted that defendants’ proffered expert economist Dr. Pierre-Yves Cremieux,
stated that “extended release agents are associated with improved tolerability ... reduced total
treatment costs, and better long-term clinical outcomes.” O’Shaughnessy Decl. Ex. 6,
Unredacted Sweet Op. at ¶ 47 (citing Cremieux, PX 229 ¶18), but he is not a physician and it is
denied that he is qualified to offer such an opinion.
In all other respects, this paragraph is denied, including that Namenda XR is associated
with any such features. To the contrary, physicians surveyed by Forest disliked Namenda XR
and disfavored moving patients from Namenda IR. O’Shaughnessy Decl. Ex. 6, Unredacted
Sweet Op. at ¶ 157 (“Defendants’ surveys show that many physicians, caregivers, and
pharmacists are concerned about potential harm to patients from the forced switch.” Physician
responses “included statements like ‘terrible,’ ‘how awful,’ ‘horrible,’ ‘what kind of game is the
drug company playing?,’ ‘It puts an undue burden on us and would anger me,’ and ‘Is this
legal?’”); id. at ¶159 (“reasons provided by such caregivers [for not finding IR discontinuation
acceptable] include “patient used to it,” “keep things the same for now,” “he likes having his
schedule stay the same,” “doing well [with] it, no reason [to] change” and “I prefer not to change
up her medication at this point.”); id. at ¶ 151 “(Physicians are reluctant to disrupt patients’
medical routines without a medical reason to do so.”); id. at ¶ 155 (“Physicians can also be
reluctant to switch medications because the patients and others, such as their caretakers, must be
educated on how the new medication is taken.”).
Surveys of physicians reflect significant concerns about moving patients from Namenda
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IR to Namenda XR. See Response to ¶ 359.
Based on having marketed Namenda for almost a decade, Forest was very familiar with
its patient population, and knew that Alzheimer’s patients are a particularly fragile patient
population. See Response to ¶ 359. Given the potential risks, without studies that show that a
new medication has meaningful benefits over a patient’s current medication, physicians
frequently will not switch an Alzheimer’s patient from a medicine on which the patient is doing
well. See Response to ¶ 359.
Given the multiple medications that often elderly, mid-to-late stage Alzheimer’s patients
take (CI’s and other medications as needed), the fact that Namenda XR changes a twice a day
regimen to a once a day regimen is of only marginal benefit to such a patient See Response to
¶359.
Particularly in LTC settings, where medication is routinely dispensed by caregivers
multiple times a day, the benefit of reducing Namenda to once-daily XR is minimal. See
Response to ¶ 359.
Forest’s objection: Forest hereby incorporates its objections to DPPs’ response to ¶ 359.
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Additionally, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25.
Further, Forest points out that the survey questions presented to physicians were based on
responses to a hypothetical world in which Namenda IR was fully unavailable. See, e.g., Litvin
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Decl. Ex. 22, FRX-AT-01600903, at 16-18. As discussed throughout Defendants’ Statement of
Undisputed Facts, and discussed at length in both Judge Sweet’s opinion and this Court’s rulings,
a withdrawal of Namenda IR never took place. See generally O’Shaughnessy Decl. I Ex. 291;
see also Sergeants Benevolent Ass'n Health & Welfare Fund v. Actavis, PLC, 2016 U.S. Dist.
LEXIS 128349, at * 22-23 (“After the Second Circuit issued its decision, Forest agreed to leave
Namenda IR on the market through July 2015.”). Thus, to the extent that the evidence DPP’s
relied upon discusses the possibility of actual withdrawal, Forest objects to those assertions as
irrelevant. Fed. R. Evid. 402.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
466. Dr. Lamb’s model is not able to identify any patients switched to Namenda XR
because they preferred the once-a-day formulation of the drug.
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 43:21-44:5 (“Q: Am I correct
sir, that the NSP database does not track actual physician prescriptions to compile its
sales database? A: I believe that’s correct. I don’t believe that the NSP data is based on a
survey or census of physician scripts, prescriptions. It’s based – pardon me, just to clarify
my answer, it’s based on the movement of the product through the supply chain.”),
54:14-56:5; 56:23-58:11 (“Q: Similarly in your model that attempts to assess the
intended effect of the alleged anticompetitive conduct at the market level, your model
doesn’t look at physician prescribing preferences. Correct? ... A physician prescribing
Namenda XR to a patient, for example, because of its once-a-day formulation? A: No,
that’s not appropriate or necessary to look at that issue....”), 185:6-189:16. (“Q: There is
no way we can tell from this data whether patients were reverse commuting to Namenda
IR because of the supply shortage of Namenda XR. Correct? A: I think that’s
correct....”); see also Ex. 349, Berndt Dep. 203:5-10 (“Q. And you don’t do any
quantitative analysis of whether patients actually switched from Namenda XR to generic
Namenda IR in the real world after July 11, 2015, when generics entered; is that fair? A.
That is correct.”).
Response: Denied. Defendants’ own internal forecasting, analysis, and planning
documents, which predicted that only approximately 30% of the market would switch absent the
hard switch, already accounted for physician and caregiver preferences for once-daily dosing, as
Forest prepared its forecasts only after extensive market studies, which included examination of
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analogous switches to extended-release formulations and surveys of physicians and caregivers.
See Response to ¶ 462.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
458-463. As Dr. Lamb repeatedly admitted, he performed no surveys or empirical analyses of
whether physicians actually changed their prescribing practices as a result of Forest’s conduct.
O’Shaughnessy Decl. II, Ex. 395, Lamb (Nov. 10) Dep. 78:6-79:13; 79:16-81:9; 120:1-121:4.
Dr. Lamb also repeatedly stated that individual patient switching decisions were not “the
appropriate analysis,” and were not incorporated into his model. O’Shaughnessy Decl. II Ex.
396, Lamb (Oct. 6) Dep. 53:1-25.
Thus, DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). DPP’s response says nothing about Dr. Lamb’s model. Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
467. Dr. Lamb conceded that his model makes no effort to account for physician
prescribing preferences and thus cannot discern whether prescribing patterns changed out of
concern from the February 2014 announcement, or other decisions influencing physicians’
prescribing behavior.
Plaintiffs’ Admissions: Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep.
63:15-24 (“Q. We’ve established in your prior testimony that your model does not
examine specific physician prescribing practices. Correct? A. That’s correct, my model
doesn’t use physician prescribing practices. It’s not appropriate or necessary to do so.”);
Ex. 364, Lamb (Nov. 10, 2017) Dep. 40:21-42:15 (discussing that Dr. Lamb did not
conduct certain empirical analysis for physician prescribing preferences).
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Response: Denied. Defendants’ own internal forecasting, analysis, and planning
documents, which predicted that only approximately 30% of the market would switch absent the
hard switch, already accounted for physician and caregiver preferences for once-daily dosing, as
Forest prepared its forecasts only after extensive market studies, which included examination of
analogous switches to extended-release formulations and surveys of physicians and caregivers.
See Response to ¶ 462.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
458-63. DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). DPP’s response says nothing about Dr. Lamb’s model. Furthermore, DPPs’
response merely attempts to “contextualize or dispute the relevance of the statement,” but does
not challenge any aspect of the statement itself, which is an improper use of a Rule 56.1
submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
468. Dr. Lamb stated that his structural break test “doesn’t identify the cause of the
break” which resulted in increased Namenda XR conversion in February 2014.
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 95:22-96:19; Ex. 364, Lamb
(Nov. 10, 2017) Dep. 108:15-110:4 (Dr. Lamb conceded that his structural break analysis
“[i]s not that finely honed that it could identify the first instance in which there was effect
on the market” from Forest’s conduct) see also Ex. 349, Berndt Dep. 183:16-187:7
(acknowledging that he did not perform econometric analyses to adduce which conduct
drove which patient decision making).
Response: Denied. In both his opening Report and Reply, Dr. Lamb conducted a
“structural break” test -- a regression analysis, based on IMS National Sales Perspective data – to
analyze whether Forest’s widespread announcement of the hard switch had a statistically
measurable impact on the Namenda conversion rate following the withdrawal announcement.
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O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 119. The test revealed that the “the Hard Switch
from Namenda IR to Namenda XR was effective in converting more sales of Namenda IR to
Namenda XR than otherwise would have been the case.” O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶ 48; see also O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 119. Dr. Lamb’s
analysis showed a statistically significant structural break for nearly all purchasers who bought
monthly from June 2013 through June 2015. See O’Shaughnessy Decl. Ex. 56, Lamb Reply
Report ¶¶ 58-59. As Dr. Lamb explains, “A test for a structural break is appropriate when there
is good reason to believe, based on economic theory or a priori understanding, that one exists. In
this case, it was appropriate to test for a structural break in February 2014 because, as I explained
in the Lamb Report and at my deposition, there is strong reason to believe that the Hard Switch
announcement caused the Namenda XR conversion rate to increase.” O’Shaughnessy Decl. Ex.
56, Lamb Reply Report ¶ 49.
Forest’s Objection: On its face, Dr. Lamb’s Reply Report confirms that his so-called
structural break test is not designed to identify the cause of a structural break, and that it was
appropriate to conduct such a test only because he believed “that one exists.” O’Shaughnessy
Decl. I Ex. 56, Lamb Reply Rep. ¶ 49. Moreover, Dr. Lamb does not find a statistically
significant break for nearly all purchasers, because as he put it “it is not appropriate as a matter
of economics and econometrics to conduct a structural break test at the proposed Class member
level.” Id. at ¶ 58. As Dr. Lamb admitted, “this kind of analysis . . . is not able to tease out
where the source of the structural break comes from by itself. One has to implement it because
one believes that there is some event which leads to a structural break.” O’Shaughnessy Decl. I
Ex. 363, Lamb (Oct. 6) Dep. 95:14-96:19.
In any event, DPPs do not deny that Dr. Lamb made the statement referenced in the
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statement of fact, or that Dr. Lamb assumed that the February announcement was the source of
harm a priori. As such, DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Furthermore, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
469. Plaintiffs have not conducted any studies to as to consumer preferences regarding
Namenda XR, or their decision to convert (i.e. whether the patient converted due to improved
formulary placement, greater product awareness, or the February 2014 announcement).
Plaintiffs’ Admissions: Ex. 358, Benton (Smith Drug Co.) Dep. 142:13-16; Ex. 357,
Doud (Rochester Drug Co.) Dep. 155:5-18.
Response: Denied. The economic analyses conducted by Dr. Berndt and Dr. Lamb
incorporate Defendants’ own internal forecasting, analysis, and planning documents, which
predicted that only approximately 30% of the market would switch absent the hard switch. These
forecasts and studies already accounted for Forest’s having taken numerous surveys and having
had discussions with market participants regarding physician and patient preferences regarding
Namenda XR and decisions to convert other than for the hard switch strategy. See Responses to
¶¶ 359, 462. Additionally, the evidence cited by Defendants fails to support their contention. For
example, Mr. Doud was asked whether RDC had studied the impact of generic memantine on
sales of Namenda IR and XR. O’Shaughnessy Decl. Ex. 357, Doud (Rochester Drug Co.) Dep. at
155:5-18. The cited passage simply has nothing to do with “studies to as to consumer
preferences regarding Namenda XR.”
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Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
359, 458-63. Forest’s forecasts were forward-looking analyses that did not, and can not, be
substituted for real world assessments of consumer behavior. O’Shaughnessy Decl. II Ex. 397,
Meury (NYAG) Dep. 127:25-128:13. Further, to the extent that it does, Forest would note that
the cited forecasts were prospective-looking documents, which Plaintiffs’ expert acknowledged
could serve “a lot of purposes” – but were not intended to retroactively assess consumer
behavior. O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep. at 161:16-162:20. As such,
DPPs’ response consists of improper argument or a recitation of different purported facts, but no
evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
Lastly, to the extent that it is needed, the complete deposition inquiry from Mr. Doud
reads as follows:
Q. Has RDC conducted any type of market studies on the impact that generic memantine
entering the market had on sales of Namenda IR®? A. No. Q. Any studies on the impact
that the introduction of generic memantine had on the sales of Namenda XR®? A.
Actually, no. I mean, we do know that sales slowed down on -- on the IR as soon as the
generic came out. So we know that their sales are way down on that, and they're way
down on the -- on the generic IR, is not selling very well either. The XR is selling very
well. So, I mean, we can see all that. But studies, we didn't do.
O’Shaughnessy Decl. I Ex. 357, Doud (RDC) Dep. 155:5-17. Plaintiffs also made the deliberate
choice to not include the Benton Deposition text as follows:
Q. Does Smith Drug have any way of knowing why the individual patients may choose
Namenda XR versus Namenda IR? A. No. Q. Would it have any way of knowing why an
individual patient would choose Namenda XR over generic memantine? A. No. . . . Q.
Did Smith Drug conduct any sort of studies about a patient's ability or willingness to
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switch between Namenda XR and Namenda IR? A. No. Q. Did Smith Drug conduct any
sort of studies about a patient's ability or willingness to switch between Namenda XR and
generic memantine? A. No.
O’Shaughnessy Decl. I Ex. 358, Benton (Smith Drug) Dep. 140:21-142:20.
470. Plaintiffs present no empirical evidence as to how physicians made their
respective prescribing decisions.
Plaintiffs’ Admissions: Ex. 364, Lamb (Nov. 10, 2017) Dep. 40:21-43:14 (determining
that all conclusions regarding whether physician behavior changed on the back of
financial analysts calls were not based on “empirical analysis,” rather on a review of
documentary evidence), 120:1-123:8 (Dr. Lamb testifying that he did not conduct any
surveys or empirical analysis of physician’s perceived uncertainty about the memantine
market or Namenda’s withdrawal); see also Ex. 349, Berndt Dep. 183:16-187:7
(acknowledging that he did not perform econometric analyses to adduce which conduct
drove which patient decision making).
Response: Denied. The economic analyses conducted by Dr. Ernst Berndt and Dr.
Lamb incorporate Defendants’ own internal forecasting, analysis, and planning documents,
which predicted that only approximately 30% of the market would switch absent the hard switch.
These forecasts and studies already accounted for anticipated physician prescriptions regarding
Namenda XR other than for the hard switch strategy, having been based, in part, on Forest’s
having taken numerous surveys and having had discussions with market participants regarding
physician decision making. See Response to ¶ 359.
Additionally, Defendants cite no evidence that supports their contention. In fact,
O’Shaughnessy Decl. Ex. 364 fails to include the transcript pages Defendants’ cite to support
their assertion.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ response to ¶¶
359, 458-463. DPPs’ objection has nothing to do with “empirical evidence as to how physicians
made their respective prescribing decisions.” As Dr. Lamb repeatedly admitted, he performed no
surveys or empirical analyses of whether physicians actually changed their prescribing practices
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as a result of Forest’s conduct. O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep.78:6-
79:13; 79:16-81:9; 120:1-121:4. Moreover, Forest’s forecasts were forward-looking analyses
that did not, and can not, be substituted for real world assessments of physician behavior.
O’Shaughnessy Decl. II Ex. 397, Meury (NYAG) Dep. 127:25-128:13. Thus, DPPs’ response
consists of improper argument or a recitation of different purported facts, but no evidentiary
basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P.
56(e)(2). Furthermore, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
Note that on December 6, 2017, Forest submitted a set of corrected exhibits. Exhibit 364
was amended to include the pages cited as support for ¶ 470.
471. Based on NPA data, within one month of a generic entry, physicians continued to
prescribe Namenda XR at a rate of over 60%, in comparison to prescriptions for Namenda IR.
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. ¶ 82 (“As a matter of economics,
patients do not choose therapies. Doctors or physicians prescribe therapies which may or
may not be covered by insurance plans.”).
Defendants’ Evidence: Ex. 54, Fowdur Rep. ¶¶ 101-102 (“Notably, in the last four
weeks leading up to generic entry, a single month-long IR prescription would be
sufficient to last until generic versions of IR were available.... Nevertheless, more than
60% of new patients picked Namenda XR over IR in that month. The high adoption rate
of Namenda XR indicates that many patients had preferences for once-daily Namenda
XR, did not have high switching costs, or both.”).
Response: Denied. The citation from Dr. Lamb’s Reply Report does not support
Defendants’ contention concerning the prescription rate of Namenda XR within one month of
generic entry. And Dr. Fowdur’s analysis is deeply flawed. Dr. Fowdur’s analysis relies on NPA
data, which does not cover the entirety of the market. See Response to ¶ 460. Moreover, Dr.
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Fowdur’s analysis relies on the data concerning prescriptions that are new to the brand.
However, as Dr. Lamb explains, “[b]ecause some new patients drop off of therapy, an analysis
using data on new-to-therapy patients overstates the average Namenda XR market share prior to
generic entry, making that analysis unreliable.” O’Shaughnessy Decl. Ex. 56, Lamb Reply
Report ¶ 31. Thus, Dr. Fowdur’s analysis overstates the share of Namenda XR purchases and
sales on the market. See id. ¶ 32 & Fig. 3.
Nor is Dr. Fowdur’s analysis relevant to whether direct purchasers were injured as a
result of Defendants’ conduct. Dr. Fowdur wrongly assumes that the effect of the Hard Switch
conduct ends in December 2014. See O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶ 80. See
also Response to ¶ 484 (discussing the evidence of continued effects post-injunction from
Defendants’ conduct). Moreover, Dr. Fowdur’s analysis is irrelevant to the proposed Class here,
which, does not include patients, and thus Dr. Fowdur analyzes the wrong step in the supply
chain and reaches incorrect conclusions regarding the impact of the challenged misconduct. See
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶ 80.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
359, 458-462, and 469. Moreover, as Plaintiffs’ conceded in their above response to ¶ 460,
“[d]irect purchasers operate on the principle of derived demand, purchasing those products
demanded by their customers and are thus informed by patient and prescription demand” –which
would encompass new to brand users, as well as existing prescriptions. Plaintiffs also
mischaracterize Dr. Fowdur’s analysis, which takes into account both total and new prescriptions
across various analyses, not only new to brand users. E.g., O’Shaughnessy Decl. I Ex. 54,
Fowdur Rep. at ¶ 173 (“To this end, I calculate the total Namenda DOT for the four weeks
ending on January 16, 2015 and normalize this total to a monthly figure.”). Further, Dr. Lamb
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acknowledged in his deposition that prescription data from physicians was aggregated by the
NPA data (and not NSP data), and that “NPA is useful to address a variety of research topics
examining pharmaceuticals, especially investigations that focus on prescription drug utilization.”
O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep. 18:16-19:19.
Thus, DPPs’ response consists of improper argument or a recitation of different purported
facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). Furthermore, DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
472. Throughout 2016, after generic entry and the court’s injunction, physicians
continued to prescribe Namenda XR to new patients at a rate of approximately 30-37%.
Defendants’ Evidence: Ex. 54, Fowdur Rep. ¶ 141 (“[T]hroughout 2016, the weekly
adoption rate of Namenda XR among new IR and XR patients averaged 32%. By 2016,
generic IR had been on the market for many months, so new patients in 2016 could not
conceivably have been influenced by the February 2014 announcement; rather, Forest
only used competitively legitimate soft switch marketing and pricing to compete for these
patients. Despite the significantly cheaper out-of-pocket cost for generic version of twice-
a-day Namenda, almost one in every three new patients in 2016 revealed that they prefer
Namenda XR to IR.”); id. at n. 320 (“Once-a-day versions of Namenda subsequent to
June 2015 include Namenda XR and Namzaric. If I include Namzaric, the average once-
a-day Namenda XR and Namzaric adoption rate for new patients in 2016 would be even
higher at 37%”).
Response: Denied. Dr. Fowdur’s analysis is deeply flawed. Dr. Fowdur’s analysis
relies on NPA data, which does not cover the entirety of the market. See Response to ¶ 460.
Moreover, Dr. Fowdur’s analysis relies on the data concerning prescriptions that are new to the
brand. However, as Dr. Lamb explains, “[b]ecause some new patients drop off of therapy, an
analysis using data on new-to-therapy patients overstates the average Namenda XR market share
prior to generic entry, making that analysis unreliable.” O’Shaughnessy Decl. Ex. 56, Lamb
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Reply Report ¶ 31. Thus, Dr. Fowdur’s analysis overstates the share of Namenda XR purchases
and sales on the market. See id. ¶ 32 & Fig. 3.
Nor is Dr. Fowdur’s analysis relevant to whether direct purchasers were injured as a
result of Defendants’ conduct. Dr. Fowdur wrongly implicitly assumes that the effect of the Hard
Switch conduct ends in December 2014. See O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶
80. See also Response to ¶ 484 (discussing the evidence of continued effects post-injunction
from Defendants’ conduct). Moreover, Dr. Fowdur’s analysis is irrelevant to the proposed Class
here, which does not include patients and thus analyzes the wrong step in the supply chain and
reaches incorrect conclusions regarding the impact of the challenged misconduct. See
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶ 80.
Moreover, a conversion rate of approximately 30% is similar to the conversion rates Dr.
Berndt and Dr. Lamb found would prevail with soft-switch tactics alone.
See Response to ¶¶ 383, 386, 388-89.
It is further denied to the extent Defendants are suggesting sales following the entry of
Judge Sweet’s injunction and the entry of generic Namenda IR are free of anticompetitive
effects, as the market was already tainted and distorted by Defendants’ anticompetitive conduct.
As Dr. Berndt opines, once physicians converted to prescribing Namenda XR in the wake of the
threatened withdrawal, “the physician’s habitual prescribing and any lingering uncertainty or
doubt about whether Forest’s appeal would be successful, which was referenced in many of the
Forest communications about the injunction, were impediments to such a physician to switch
back to prescribing Namenda IR.” O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶ 18. And,
as Dr. Lamb noted, Forest understood that it takes a while for physician habits to change.
Forest’s strategy with respect to the Hard Switch focused on physicians’ behavior because, as
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Jerry Lynch put it in a speech launching Namenda XR, “Physicians have habits and old habits
die hard.” Litvin Decl. Ex. 483, FRX-AT-01630868-888 at 884. See also Litvin Decl. Ex. 484,
FRX-AT-04195587-600 at 589, 596 (in a June 2013 draft of a speech on the Namenda XR
launch, Maria Theodore of Forest noted, “We have to persuade physicians about why they
should treat today with Namenda XR ... why they should convert their patients. ... But there is
another obstacle ... too. I’ll give you a hint... we all have them ... some good and some bad .... It’s
‘habit.’ Namenda is a good product and physicians have been prescribing it for almost a decade.
It’s very automatic. It’s a habit. Usually ... this obstacle disappears over time because over time
new habits will form. However ... given our urgency ... we need to speed up the process.
Physicians need to start automatically adding the letters XR on the prescription pad right away.
Leave this message wringing in doctors’ ears ... ‘Don’t forget -you have to write Namenda
XR!’”) (emphasis in original). Moreover, due to the fragility and vulnerability of their late stage
Alzheimer’s patients, physicians would be reluctant to disrupt their patients’ routine and double-
switch them – first to Namenda XR and then back to generic IR. Litvin Decl. Ex. 70, FRX-AT-
01726785-792 at 789-90 at ¶¶ 30-31 (Lah Declaration). Forest also expected that reverse
commuting was expected to be limited. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶ 64;
O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶18. See also O’Shaughnessy Decl. Ex. 56,
Lamb Reply ¶¶ 69-75.
Forest also anticipated that patients once switched to Namenda XR would not switch
back to IR. For example, Mark Devlin noted in a June 2012 email concerning a “Launch
Readiness” presentation that “the key is not just conversion but also holding on to the XR
business we get and not immediately losing it to generic IR. Managed care and LTC tells us
that anyone converted [to Namenda XR] is likely to stay converted.” O’Shaughnessy Decl. Ex.
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195, FRX-AT-01606209-210 at 209 (emphasis added). Forest’s CEO, Brent Saunders, in a
January 21, 2014 investor call noted “if we do the hard switch and we’ve converted patients and
caregivers to once-a-day therapy versus twice a day, it’s very difficult for the generics then to
reverse commute back, at least with the existing Rxs. They don’t have the sales force, they don’t
have the capabilities to go do that. It doesn’t mean that it can’t happen, it just becomes very
difficult.” Litvin Decl. Ex. 99, FRX-AT-01775500-518 at 516.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
359, 383-384, 386-389, and 458-462. Moreover, as Plaintiffs’ conceded in their above response
to ¶ 460, “[d]irect purchasers operate on the principle of derived demand, purchasing those
products demanded by their customers and are thus informed by patient and prescription
demand” – which would encompass new to brand users, as well as existing prescriptions.
Plaintiffs also mischaracterize Dr. Fowdur’s analysis, which takes into account both total and
new prescriptions across various analyses, not only new to brand users. E.g., O’Shaughnessy
Decl. I Ex. 54, Fowdur Rep. at ¶ 173 (“To this end, I calculate the total Namenda DOT for the
four weeks ending on January 16, 2015 and normalize this total to a monthly figure.”). Further,
Dr. Lamb acknowledged in his deposition that prescription data from physicians was aggregated
by the NPA data (and not NSP data), and that “NPA is useful to address a variety of research
topics examining pharmaceuticals, especially investigations that focus on prescription drug
utilization.” O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep. 18:16-19:19. Dr. Lamb
repeatedly admitted that he performed no surveys or empirical analyses of whether physicians
actually changed their prescribing practices as a result of Forest’s conduct. O’Shaughnessy
Decl. II Ex. 395, Lamb (Nov. 10) Dep. 78:6-79:13; 79:16-81:9; 120:1-121:4.
Thus, DPPs’ response consists of improper argument or a recitation of different purported
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facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R.
Civ. P. 56(e)(2). Furthermore, DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. DPPs criticize Dr. Fowdur for looking at new patient data, but the fact in
question is specifically talking about new patients. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
473. Namenda XR “is selling very well” almost over two full years after generic
Namenda IR’s entry.
Plaintiffs’ Admissions: Ex. 357, Doud (Rochester Drug Co.) Dep. 155:9-18.
Response: Admitted in part and denied in part. It is admitted that Namenda XR has
substantial sales two full years after generic entry. However, as Mr. Doud also states, “sales” are
“way down on the -- on the generic IR, is not selling very well either,” O’Shaughnessy Decl. Ex.
357, Doud (Rochester Drug Co.) Dep. 155:14-16, reflecting that generic Namenda IR sales
continue to be depressed. As noted in Response to ¶ 472, the period following generic entry
continues to be affected by the anticompetitive taint of Defendants’ conduct in no small part
because physician habits “diehard.” See id.
Forest’s Objections: Forest hereby incorporates its objection to DPPs’ response to ¶
472. DPPs’ response does not provide any evidentiary basis to contest the statement, but instead
attempts to “contextualize or dispute the relevance of the statement,” which is an improper use of
a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly,
the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
O. No Way to Know How Many People Switched Back to Generic Namenda IR
From Namenda XR
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474. Namenda XR and IR “are pharmacologically the same drug.”
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op., ¶ 109; Mem. and Order
Denying Defendants’ MTD, Dkt. 106, at 2.
Response: Admitted in part and denied in part. It is denied that Namenda XR and
Namenda IR are bioequivalent and therapeutically, and, as they are not readily substitutable for
each other, prescriptions written for Namenda XR would not be subject to automatic substitution
effects as would any prescriptions written for Namenda IR, for which pharmacists could
automatically dispense the bioequivalent (or AB-rated) generic versions of Namenda IR, which
would be subject to the rapid, and massive, shift from brand to generic sales. See O’Shaughnessy
Decl. Ex. 56, Lamb Reply Report ¶¶ 20-25.
Forest’s Objections: DPPs’ response does not provide any evidentiary basis to contest
the statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
475. Patients can safely transition between Namenda IR to Namenda XR without
titration the next day.
Undisputed Record Evidence: Ex. 6, Unredacted Sweet Op., ¶ 53; Ex. 208, FRX-AT-
01751482 (NYAG Nov. 13, 2014 Hr’g Tr.) 726:6-13 (Dr. Reisberg testifying “that there
were no problems in switching patients back to the IR”), 742:13-22 (Dr. Kohrman stating
that patients did not experience any side effects switching between Namenda XR and IR).
Defendants’ Evidence: Ex. 197, FRX-AT-01765922 (Namenda XR Labeling
Information)
Response: Denied. Defendants’ medical expert, Dr. Barry Reisberg, conceded that he
was not “aware of any studies to support the proposition that it is safe to convert patients from
the extended-release formulation to the immediate release formulation.” O’Shaughnessy Decl.
Ex. 323, Reisberg Dep. (Nov. 5, 2014) at 169:5 – 169:15. Although Defendants point to
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Namenda XR’s Labeling Information, the document only discusses “Switching from Namenda to
Namenda XR Capsules,” and not reverse commuting. See O’Shaughnessy Decl. Ex. 197 at FRX-
AT-01765923. The document also expressly states that “There is no study addressing the
comparative efficacy of these 2 regimes” (i.e. Namenda XR and Namenda IR). And while
Defendants cite to paragraph 109 of Judge Sweet’s opinion, that paragraph does not support
Defendants’ proposition.
Moreover, the proposition is irrelevant. As discussed in Response to ¶ 472, demand for
the product is driven mainly by physician prescriptions, and physicians are reluctant to change a
patient’s Alzheimer’s medication and would thus be reluctant to “reverse commute” from
Namenda XR to the immediate release product. See id.
Forest’s Objections: Forest hereby incorporates its objection to DPPs’ response to ¶
472. DPPs’ response consists of improper argument or a recitation of different purported facts,
but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2). Additionally, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Both Judge Sweet and the FDA found that titration could occur the next day.
See ¶ 476. DPPs response discusses “reverse communting” (i.e., XR to IR conversion), but the
fact in question specifically discusses IR to XR conversion. Accordingly, the fact should be
deemed admitted. Fed. R. Civ. P. 56(e)(2).
476. The FDA concluded: “a patient who is stabilized with NAMENDA IR
formulation 10 mg twice daily may directly switch to the XR formulation at a dose of 28 mg
once daily with no additional titration or lag time.”
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Public Documents: Ex. 319, FRX-AT-01769421 (FDA, Center for Drug
Evaluation and Research, Clinical Pharmacology and Biopharmaceutics Review
of Namenda XR®, at 4 (May 3, 2010)).
Response: Admitted. O’Shaughnessy Decl. Ex. 319 is not the FDA’s Clinical
Pharmacology and Biopharmaceutics Review of Namenda XR; it is a scheduling order entered in
the Namenda patent infringement litigation (Forest Laboratories Inc. v. Lupin Pharmaceuticals
Inc., et al., No. 08-cv-00021-LPS (ECF No. 117)). Upon review of FRX-AT-01769421, the
quoted language appears in the document.
477. Generic Namenda IR entered the market in July 11, 2015.
Plaintiffs’ Admissions: DPPs’ Statement of Material Facts ISO Count Three, Dkt. 147,
¶¶ 28, 30, 42, 44, 58, 70, 72, 97, 99.
Response: Admitted.
478. Plaintiffs have no evidence that patients did not switch between generic Namenda
IR and Namenda XR, upon the entry of generic memantine into the market.
Plaintiffs’ Admissions: Ex. 349, Berndt Dep. 203:5-10 (“Q. And you don’t do any
quantitative analysis of whether patients actually switched from Namenda XR to generic
Namenda IR in the real world after July 11, 2015, when generics entered; is that fair? A.
That is correct.”); see also Ex. 363, Lamb (Oct. 6, 2017) Dep. 188:15-189:16 (“[Q.]
There is no way we can tell from this data [in Figure 7 of the Lamb report] whether
patients were reverse commuting to Namenda IR because of the supply shortage of
Namenda XR. Correct? A. I think that’s correct. This data discussed in Figure 7 isn’t
analyzing patient behavior.... Forest didn’t think reverse commuting from XR to a generic
version of IR was likely to happen when generic IR came on the marketplace. But this
chart isn’t an analysis of that.”).
Response: Denied. The paragraph is vague and confusing and no response is
required. By way of further response, Dr. Lamb has examined NSP and manufacturer sales data,
as well as other record evidence, and determined that the volume of generic Namenda IR
purchases is lower than the volume of generic Namenda IR purchases that would have occurred
absent the hard switch strategy. See O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 104, 106-20,
158-60. Dr. Lamb’s analyses, while performed at the direct purchaser level, reflect shifts among
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patients as well because direct purchasers’ purchases are a factor of demand in the supply chain.
See Response to ¶ 479.
In Judge Sweet’s opinion concerning the preliminary injunction, the Court repeatedly
noted the difficulties purchasers would face “reverse commuting” back to immediate-release
therapy. See O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. at ¶¶ 76, 116, 138, 143-47, 151-
52, 154-56. The court noted that “several factors are likely to inhibit switching from Namenda
XR to generic memantine once it becomes available in the market[,] including that physicians
and caregivers are reluctant to disrupt patients’ medical routines without a medical reason to do
so.” See O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. ¶143 (citing NYAG Tr. 131:8-
133:22 (Stitt), 508:1-3, 541:21-542:4 (Kane)). See also O’Shaughnessy Decl. Ex. 6, Unredacted
Sweet Op. ¶151-52 (collecting testimony from physicians that they would be reluctant to switch
patients to Namenda XR and then again to immediate release product); id. ¶¶ 144-45 (noting
health plans are reluctant to switch patients from a drug they are already taking, particularly for
vulnerable Alzheimer’s patients). See also Litvin Decl. Ex. 70, FRX-AT-01726785-792 at 786 at
¶¶ 11, 25 (Lah Declaration: physician would not switch patient who is stable and doing well);
Litvin Decl. Ex. 511, Jacobs NYAG Dep. 81:14-82:11 (“[I)f they are on a drug and it is working
for them and there was no reason to change it, I wouldn’t change it.”); Litvin Decl. Ex. 509,
FRX-AT-01776549-64 at ’61, Stitt Decl. [NYAG PX122]) ¶47 (“[P]hysicians are also reluctant
to switch patients to a different drug when the patient is already doing well on the current drug
they are taking.”). This “behavioral change” inhibits switching from Namenda XR back to
generic memantine. O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. ¶ 152 (quoting Saunders
NYAG Dep. at 204-05).
The Court also cited several of Forest’s assessments that reverse commuting would be
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limited. “Defendants have stated that the company is fighting back against the state substitution
laws by seeking to convert patients from Namenda IR to Namenda XR prior to generic entry,
which would allow Forest to evade the application of these laws and thus have a better chance of
protecting its sales. Tr. 223:25-224:4 (Saunders).” O’Shaughnessy Decl. Ex. 6, Unredacted
Sweet Op. ¶ 116. Judge Sweet also cited internal Forest analyses of the expected effects of the
hard switch strategy on reducing reverse commuting, noting that Forest estimated that “5-30
percent” of patients might reverse commute back, a figure “much, much less than 100 percent or
the 90 percent you would get from a conventional launch.” See O’Shaughnessy Decl. Ex. 6,
Unredacted Sweet Op. at ¶ 138. See also Litvin Decl. Ex. 507, FRX-AT-01781422-34 at 28,
Forest Earnings Call Tr., Apr. 29, 2014 [NYAG PX366]; Litvin Decl. Ex. 512, NYAG Hrg. Tr.
at 88:2-8 (Lah), at 223:13-22 (Saunders), at 390:9-392:17 (Berndt) (discussing PX366 (“Q.
Okay. Now what did you take way from this exchange? A. I take it that by April of this year,
Forest had conducted a fair bit of research, its marketing folks had done that; that they came up
with a wide range of estimates, and that Meury and Saunders believed the range of 5-30 percent
is a reasonable range. But notably it’s much, much less than 100 percent or the 90 percent you
would get from a conventional launch.”). Judge Sweet also cited Saunders’s statement to
investors:
[I]f we do the hard switch and we convert patients and caregivers to once-a-day
therapy versus twice a day, it’s very difficult for the generics then to reverse-
commute back, at least with the existing Rxs. They don’t have the sales force.
They don’t have the capabilities to do that. It doesn’t mean that it can’t happen, it
just becomes very difficult and is an obstacle that will allow us to, I think, again
go into to a slow decline versus a complete cliff.
O’Shaughnessy Decl. Ex. 6, Unredacted Sweet Op. at ¶76 (quoting Tr. of Jan. 21, 2014
earnings call); Litvin Decl. Ex. 99, FRX-AT-01775500-518 at 516 (Transcript of Jan. 21,
2014 earnings call). Likewise, Mark Devlin noted in an internal Forest June 2012 email
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concerning a “Launch Readiness” presentation that Forest long understood that “Managed
care and LTC tells us that anyone converted [to Namenda XR] is likely to stay converted.”
O’Shaughnessy Decl. Ex. 195, FRX-AT-01606209.
Dr. Lamb also cited to such internal Forest analyses and discussions as to the difficulties
regarding “reverse commuting,” that is, switching back to immediate release memantine
hydrochloride once a switch had been made to the extended release version. For example, a
Namenda internal analysis shows that Forest itself expected a substantial decline in switching to
the immediate-release version with the implementation of its hard switch strategy. See
O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 95 & Fig. 6; Litvin Decl. Ex. 52, FRX-AT-
01641155 at 40-41. Dr. Berndt similarly opines that “Forest understood that this ‘reverse
commuting’ was highly unlikely, both because of the fact that those prescriptions would not be
subject to automatic substitution with the non-AB-rated generics, but also because of the
disruption to the fragile patients’ prescribing regimen.” O’Shaughnessy Decl. Ex. 231, Berndt
Report ¶ 64 (citing Defendants’ own analyses, O’Shaughnessy Decl. Ex. 195, Litvin Decl. Exs.
508 and 99, FRX-AT-01606209 and FRX-AT-01775500-518 at 16).
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
359, 458-462. DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any evidentiary
basis to contest the statement, but instead attempts to “contextualize or dispute the relevance of
the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
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Moreover, to the extent that DPPs’ rely on Judge Sweet’s opinion or evidence from the
NYAG proceeding for the proposition that switching would likely be difficult, that discussion
was necessarily forward-looking, and could not have been based on data from the period after
generic entry in July 2015. Forest notes that it is undisputed that generic memantine did in fact
enter the market in July 2015 (well after Judge Sweet’s opinion was entered), and that DPPs had
discovery from that time period, yet have pointed to no evidence indicating that patients did not
switch from Namenda IR to Namenda XR after generic entry. Plaintiffs’ “evidence” concerning
actual reverse commuting (including Judge Sweet’s discussion) discussed above is prospective
conjecture from Forest’s executives about what they perceived the likelihood of reverse
commuting to be, prior to generic entry. In fact, Forest’s CEO conceded later that their reverse
commuting assertions were incorrect. Mr. Saunders explained during his NYAG deposition that
after his prior correspondence, he learned generic manufacturers do, in fact, “have sales forces”
and that “when the generic memantine enters the market . . . a whole slew of the healthcare
market will put pressure on physicians to only write generic memantine over branded IR or XR.”
O’Shaughnessy Decl. II Ex. 406, Saunders (NYAG) Dep. 214:24-215:20, 218:6-220:21
(discussing a copy of Litvin Decl. Ex. 99). Thus, Plaintiffs’ evidence does not rebut Forest’s fact
that DPPs’ have offered no proof as to whether actual switching matched Forest’s prospective
assertions.
Plaintiffs’ experts had the data available to them to test these assertions as true, via NPA
data which tracked Namenda sales at the prescription level. O’Shaughnessy Decl. II Ex. 396
Lamb (Oct. 6) Dep. 48:8-49:3, 70:8-21 (noting that Dr. Lamb did no review of prescription level
data); see also O’Shaughnessy Decl. II Ex. 398, Fowdur Dep. at 117:20-118:5 (discussing the
appropriateness of using NPA data in this action). DPPs’ theory of the case is that patients in
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fact switched from Namenda IR to Namenda XR and then could not reverse commute, but no
expert conducted the necessary analysis here, empirical or otherwise, to show that patients did
not reverse commute after the entry of generic memantine. See DRSUF ¶¶ 458-463.
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
479. The NSP data relied on by DPP’s experts “provides data elements related to the
sales dollars and volume of pharmaceutical products to retail and non-retail outlets” to track the
supply pharmaceutical drugs, but does not track patient or physician demand for Namenda XR,
Namenda IR, or generic memantine.
Plaintiffs’ Admissions: Ex. 56, Lamb Reply Rep. n. 77; Ex. 363, Lamb (Oct. 6, 2017)
Dep. 43:21-44:5 (“Q: Am I correct sir, that the NSP database does not track actual
physician prescriptions to compile its sales database? A: I believe that’s correct. I don’t
believe that the NSP data is based on a survey or census of physician scripts,
prescriptions. It’s based - - pardon me, just to clarify my answer, it’s based on the
movement of the product through the supply chain.”), 185:6-189:16. (“Q: There is no
way we can tell from this data whether patients were reverse commuting to Namenda IR
because of the supply shortage of Namenda XR. Correct? A: I think that’s correct....”).
Public Documents: Ex. 330, IMS, “HSRN DATA BRIEF: NATIONAL SALES
PERSPECTIVES” at *1-2.
Response: Denied. As Dr. Lamb concluded, the level of the market at issue is the
wholesaler level rather than at the patient or physician level, as the class is comprised of direct
purchasers. O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 42; O’Shaughnessy Decl. Ex. 56,
Lamb Reply ¶ 40; O’Shaughnessy Decl. Ex. 363, Lamb Dep. 188:1-13 (“the analysis of the
market for purposes of measuring class-wide damages to proposed class members is reliably
based on an analysis of the market...but it’s not an analysis of patient scripts or patient behavior
directly”). Direct purchasers operate on the principle of derived demand, purchasing those
products demanded by their customers and are thus informed by patient and prescription
demand. O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 24-26, 42. Thus, the NSP and
manufacturer data which Dr. Lamb examines incorporates and reflects patient and physician
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product demand. Analyzing the effects of Defendants’ conduct by resort to prescription data
specifically would thus not provide an accurate measure of the impact on direct purchasers.
O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 42; O’Shaughnessy Decl. Ex. 56, Lamb Reply
Report ¶ 40. The NSP data employed by Dr. Lamb is used to “monitor and assess national sales
given its accuracy representing 100% of the U.S. pharmaceutical sales market.” O’Shaughnessy
Decl. Ex. 330, IMS, “HSRN Data Brief: National Sales Perspectives. See also O’Shaughnessy
Decl. Ex. 193, Lamb Report ¶ 79 (“IMS’s National Sales Perspectives database (“NSP”)
‘captures 100% of the total U.S. pharmaceutical market, measuring sales at actual transaction
prices” and ‘monitors every major class of trade and channel of distribution for prescription
pharmaceuticals, over-the-counter products and select, self-administered diagnostic products in
the United States.’”); id. ¶ 79 n.157 (“According to IMS, ‘[t]he IMS sales database is derived
from the processing of more than 1.5 billion transactions each year. These transactions reflect
both direct sales from approximately 100 pharmaceutical companies and indirect sales
information from over 700 distribution centers. The universe of these direct and indirect sales are
made to over 552 wholesalers, 223 drug and food chain warehouses, 5,793 non- federal hospitals
and 334 federal government and non-government mail service pharmacies.’ National Sales
Perspectives Brief.”).
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to
¶¶471-72. Moreover, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. The only portion of the response that might be read to dispute the statement,
“the NSP and manufacturer data which Dr. Lamb examines incorporates and reflects patient and
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physician product demand,” is not supported by a citation to admissible evidence, and, in any
event, does not dispute that NSP data “does not track patient or physician demand.”
Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
480. From this supply data, Plaintiffs cannot offer empirical evidence as to the
difficulties of reverse commuting.
Plaintiffs’ Admissions: Ex. 363, Lamb (Oct. 6, 2017) Dep. 56:23-58:11 (“Q:
Similarly in your model that attempts to assess the intended effect of the alleged
anticompetitive conduct at the market level, your model doesn’t look at physician
prescribing preferences. Correct? ... A physician prescribing Namenda XR to a
patient, for example, because of its once-a-day formulation? A: No, that’s not
appropriate or necessary to look at that issue... .”), 188:15-189:16 (“[Q.] There is
no way we can tell from this data [in Figure 7 of the Lamb report] whether
patients were reverse commuting to Namenda IR because of the supply shortage
of Namenda XR. Correct? A. I think that’s correct. This data discussed in Figure
7 isn’t analyzing patient behavior.... Forest didn’t think reverse commuting from
XR to a generic version of IR was likely to happen when generic IR came on the
marketplace. But this chart isn’t an analysis of that.”); see also Ex. 364, Lamb
(Nov. 10, 2017) Dep. 40:21-43:14 (determining that all conclusions regarding
whether physician behavior changed on the back of financial analysts calls were
not based on “empirical analysis,” rather on a review of documentary evidence),
120:1-123:8 (Dr. Lamb testifying that he did not conduct any surveys or empirical
analysis of physician’s perceived uncertainty about the memantine market or
Namenda’s withdrawal); see also Ex. 349, Berndt Dep. 183:16-187:7
(acknowledging that he did not perform econometric analyses to adduce which
conduct drove which patient decision making).
Response: Denied. See Response to ¶ 479. By way of further response, Dr. Lamb and
Dr. Berndt had ample evidence that defendants’ hard switch strategy would significantly reduce
the likelihood and number of instances of reverse commuting. See Response to ¶ 487. The cited
portions of Dr. Lamb’s testimony in O’Shaughnessy Decl. Ex. 363 do not support the assertion
that “Plaintiffs cannot offer empirical evidence as to the difficulties of reverse commuting.”
Instead, the cited portions explain that Dr. Lamb’s model accounts for exactly the kind of data
defendants complain is lacking. O’Shaughnessy Decl. Ex. 363, Lamb Dep. at 56:7-63:13.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
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458-63, 471-72, 479, and 487. Again, as Dr. Lamb stated in his deposition from October 6,
2017, when asked whether “[his] model assumes that all actual Namenda XR days of therapy
above your but-for estimate consists of the anticompetitive hard switches at issue in this case”
Dr. Lamb responded that was “a fair way [to] characteriz[e] it.” O’Shaughnessy Decl. II Ex. 396,
Lamb (Oct. 6) Dep. 46:13-24 (emphasis added). Further, Dr. Lamb’s testimony in
O’Shaughnessy Decl. Ex. 363 discusses his model’s reliance on “Forest's own understanding of
patient preferences or physician preferences of the kind you've been asking about,” and concedes
that he did no other empirical analysis of reverse commuting beyond his assumption on the
subject. O’Shaughnessy Decl. I Ex. 363, Lamb (Oct. 6) Dep. 56:7-63:13. DPPs’ response thus
does not provide any evidentiary basis to contest the statement, but instead attempts to
“contextualize or dispute the relevance of the statement,” which is an improper use of a Rule
56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact
should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
481. Documents Plaintiffs have relied upon do not provide evidence of how much
reverse commuting was or was not occurring in the marketplace.
Defendants’ Evidence: Ex. 195, FRX-AT-01606209 (June 2012 Forest email noting that
“the key is not just conversion but also holding on to the XR business we get and not
immediately losing it to generic IR. Managed care and LTC tells us that anyone
converted [to Namenda XR] is likely to stay converted.”).
Response: Denied. The NSP and manufacturer data relied upon by Dr. Lamb
encompasses any reverse commuting that was taking place, as purchases of Namenda XR that
were then subject to “reverse commuting” to purchasers of immediate release product would be
reflected within the datasets, which capture all sales in the market. See Response to ¶¶ 479, 480.
By way of further response, Dr. Lamb and Dr. Berndt had ample evidence that defendants’ hard
switch strategy would significantly reduce the likelihood and number of instances of reverse
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commuting. See Response to ¶ 482.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
478-80. Again, as Dr. Lamb stated in his deposition from October 6, 2017, when asked whether
“[his] model assumes that all actual Namenda XR days of therapy above your but-for estimate
consists of the anticompetitive hard switches at issue in this case” Dr. Lamb responded that was
“a fair way [to] characteriz[e] it.” O’Shaughnessy Decl. II Ex. 396, Lamb (Oct. 6) Dep. 46:13-24
(emphasis added). Further, Dr. Lamb’s testimony in O’Shaughnessy Decl. Ex. 363 discusses his
model’s reliance on “Forest's own understanding of patient preferences or physician preferences
of the kind you've been asking about,” and concedes that he did no other empirical analysis of
reverse commuting beyond his assumption on the subject. O’Shaughnessy Decl. I Ex. 363,
Lamb (Oct. 6) Dep. 56:7-63:13. Thus, DPPs’ response consists of improper argument or a
recitation of different purported facts, but no evidentiary basis to contest the statement. SESAC,
1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide
any evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute
the relevance of the statement,” which is an improper use of a Rule 56.1 submission.
Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
482. Dr. Lamb does not cite empirical data to support his opinion that the cause of
Namenda XR’s gradual decline after generic entry was because patients did not or could not
reverse commute.
Plaintiffs’ Admissions: Ex. 193, Lamb Rep. I ¶ 109 (noting that the trend in DOT for
Namenda XR in July 2015 “did not result in a sharp decline”); Ex. 363, Lamb (Oct. 6,
2017) Dep. 188:15-189:16 (“[Q.] There is no way we can tell from this data [in Figure 7
of the Lamb report] whether patients were reverse commuting to Namenda IR because of
the supply shortage of Namenda XR. Correct? A. I think that’s correct. This data
discussed in Figure 7 isn’t analyzing patient behavior.... Forest didn’t think reverse
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commuting from XR to a generic version of IR was likely to happen when generic IR
came on the marketplace. But this chart isn’t an analysis of that.”).
Response: Denied. Dr. Lamb cited many of Defendants’ own internal analyses
regarding the likely effects of the hard switch strategy as opposed to soft switch tactics, which
include Defendants’ own analyses of the likelihood of reverse commuting. See Response to ¶
482. As Defendants themselves predicted, the number of purchases of Namenda XR versus
generic Namenda IR depended on the number of purchases of Namenda IR Forest was able to
convert to Namenda XR prior to generic entry. See O’Shaughnessy Decl. Ex. 193, Lamb Report
¶¶ 86-97. As Mark Devlin of Forest explained in a May 2013 speech, “[T]he core of our brand
strategy with XR is to convert our existing IR business to Namenda XR as fast as we can and
also gain new starts for Namenda XR. We need to transition volume to XR to protect our
Namenda revenue from generic penetration in 2015 when we lose IR patent exclusivity.” Litvin
Decl. Ex. 90, FRX-AT-01775214-17 at 14. Mr. Saunders of Forest similarly explained on a
January 21, 2014 Forest earnings call regarding Namenda XR: “I think our view is that what
we’re trying to do is make a cliff disappear and rather than have a long - a prolonged decline.
And we believe that by potentially doing a forced switch, we will hold on to a large share of our
base users. [...] We’re not just going with both hands tied behind our back.” Litvin Decl. Ex. 99,
FRX-AT-01775500-518 at 516; see also id. (“Keep in mind that this is behavioral change. So
once if we do the hard switch and we converted patients and caregivers to once a day therapy
versus twice a day, it’s very difficult for the generics then to reverse-commute back, at least with
the existing Rxs. They don’t have the sales force. They don’t have the capabilities to go do that.
It doesn’t mean that it can’t happen. It just becomes very difficult, it’s an obstacle that will allow
us to I think again go into to a slow decline versus a complete cliff.”). Defendants’ internal
analyses bear out such predictions: Forest expected to retain higher sales due to the hard switch
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because it is more difficult to reverse commute from a once-daily treatment to a twice-daily
treatment. See O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 95 & Fig. 6, 107-110 (citing, e.g.,
FRX-AT-01641155 at 40-41); O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 20-25.
Moreover, Forest’s forecasts reflected a gradual and steady decline in Namenda XR market share
following entry of generic IR, which is reflected in Dr. Lamb’s modeling. See Response to ¶¶
383, 386, 388-89 (summarizing Forest’s various forecasts predicting this trend).
Finally, Dr. Lamb’s analysis of NSP and manufacturer data in this case also account for
the effects of any reverse commuting. See O’Shaughnessy Decl. Ex. 193, Lamb Report ¶ 109 &
Fig. 7. Such data encompasses the effects of reverse commuting, as direct purchasers’
acquisitions are based on derived demand). Dr. Lamb specifically observes that “the gradual
decline in Namenda XR market share is consistent with the erosion of Namenda XR DOT as
patients transitioned off Namenda XR (either due to mortality or cessation of therapy) and were
not replaced, as new patients started instead on generic memantine hydrochloride at much lower
prices.” Id. ¶ 109.
Nor does the experience with Namenda XR market share in July-August 2015
demonstrate that there was not reverse commuting; as shown above, it was forecasted and
expected to be a slow decline.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
477-82. Forest notes that while Dr. Lamb did cite to NSP data in his report, he has not explained
why or how that data demonstrates switching from Namenda XR to another drug, the lack of
such switching, or the reasons for such switching, nor has he explained how the data shows the
reasons why Namenda XR sales gradually declined for some period of time following generic
entry. His testimony is thus ipse dixit unsupported by the evidence, and cannot create a genuine
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issue of fact sufficient to defeat summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d
Cir. 1997) (“[A]n expert’s report is not a talisman against summary judgment.”); Virgin Atl.
Airways Ltd. v. British Airways plc, 69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) (holding that
“expert testimony without a factual foundation cannot defeat a motion for summary judgment”),
aff’d 257 F.3d 256 (2d Cir. 2001). Thus, DPPs’ response consists of improper argument or a
recitation of different purported facts, but no evidentiary basis to contest the statement. SESAC,
1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide
any evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute
the relevance of the statement,” which is an improper use of a Rule 56.1 submission.
Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
483. Plaintiffs have “done no quantitative assessment of the effect of the
post-injunction real-world conversion rates in this case.”
Plaintiffs Admissions: Ex. 349, Berndt Dep. 201:23-202:2; see also Ex. 364,
Lamb (Nov. 10, 2017) Dep. 40:21-42:15 (discussing that Dr. Lamb did not
conduct certain empirical analysis for physician behavior post-injunction).
Response: Denied. See Response to ¶ 482. Moreover, there is no need to conduct an
analysis of the effect of conversion rates before and after the injunction or before and after
generic entry. As explained by Dr. Berndt and Dr. Lamb, the hard switch campaign impacted the
market starting prior to the February 14, 2014 announcement and continued to impact the market
well past the entry of the injunction and through generic launch in July 2015. See O’Shaughnessy
Decl. Ex. 231, Berndt Report ¶¶ 52-68; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 9-
33; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 89-118; O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶¶ 37-55, 60-100.
Additionally, the excerpted portions of Dr. Lamb’s deposition in O’Shaughnessy Decl.
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Ex. 364 do not include the relevant page numbers. Upon review of the missing pages, the cited
testimony consists of Dr. Lamb simply acknowledging that Forest’s attorney correctly read
paragraph 80 of his report, which explains how he calculated “days of therapy.” Thus, it does not
support Forest’s assertion.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
479-482, as well as its response to 464 to explain the relevance of the above fact, in light of the
Court’s treatment of antitrust injury here. DPPs’ response consists of improper argument or a
recitation of different purported facts, but no evidentiary basis to contest the statement. SESAC,
1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not
provide any evidentiary basis to contest the statement, but instead attempts to “contextualize or
dispute the relevance of the statement,” which is an improper use of a Rule 56.1 submission.
Funnekotter, 2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed
admitted. Fed. R. Civ. P. 56(e)(2).
To the extent that any further clarification is required as to the relevance of this fact,
Forest refers the Court to its ruling on Sept. 13, 2016:
Plaintiffs have alleged an injury, because they allege that they were forced to pay for
certain patients' memantine treatment at brand-name prices because these patients
switched to Namenda XR prior to the entry of the injunction. Assuming Plaintiffs can
ultimately prove that these patients switched to Namenda XR because of the
announced withdrawal of Namenda IR, it is entirely irrelevant that the hard switch
never occurred and that Namenda XR was priced below Namenda IR prior to the
injunction. Plaintiffs' injury comes from having to pay for Namenda XR after generic
entry — when absent Defendants' anticompetitive conduct, their patients' prescriptions
would have been filled by a far cheaper generic (which, as Defendants state, was
available for less than 10% of the July Namenda IR price).
Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis PLC, No. 15-cv-07488-CM, 2016
U.S. Dist. LEXIS 128349, at*38-39 (S.D.N.Y. Sept. 13, 2016) (emphasis added).
For clarity, Forest has included the quotation of Dr. Lamb’s testimony in question:
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Q. Sir, did you perform any empirical analysis to determine the number of
actual prescribing physicians who would have had any knowledge of this
earnings conference call? A. As I understand your question, I don't -- I
believe the answer is no, it wouldn't have any relevance to any of the opinions
or conclusions I've reached or to any of the analyses I've conducted in this
matter. But I -- I would say the knowledge of Namenda IR's withdrawal from the
marketplace is something that the -- both the possibility and the likelihood of that,
and, in fact, based on Forest's internal documents, the certainty of that was known
well before the February 2014 announcement.
O’Shaughnessy Decl. II Ex. 395, Lamb (Nov. 10) Dep. 40:21-41:13 (emphasis added). DPPs
appear to be conflating the cited document to the October 6, 2017 deposition of Dr. Lamb.
Note that on December 6, 2017, Forest submitted a set of corrected exhibits. Exhibit 364
was amended to include the pages cited as support for ¶ 470.
P. The Injunction Undid Any Purported Harm of the February 2014
Announcement
484. On December 15, 2014, Judge Sweet entered an injunction in the NYAG action,
requiring Forest to continue making Namenda IR tablets available and to alert healthcare
providers, pharmacists, patients, caregivers, and health plans of the injunction in the same or
substantially similar manner as the February 2014 announcement.
Defendants’ Evidence: Ex. 288, FRX-AT-01747641 at 7641.
Response: Admitted in part, denied in part. It is admitted that on December 15, 2015,
Judge Sweet entered an injunction ordering Defendant to “continue to make Namenda IR
(immediate-release) tablets available on the same terms and conditions applicable since July 21,
2013” and directed Defendants to “inform healthcare providers, pharmacists, patients, caregivers,
and health plans of this injunction (and provide a copy of the injunction or other means to easily
view the injunction) and the continued availability of Namenda IR in the same or substantially
similar manner in which they informed them of Defendants’ plan to discontinue Namenda IR in
February 2014.” O’Shaughnessy Decl. Ex. 288, FRX-AT-01747641 at 7641-42.
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513
It is denied, however, that Forest complied fully with the injunction, and, denied to the
extent that its alleged compliance removed the anticompetitive impact its conduct had already
had on the market. As explained by Dr. Berndt and Dr. Lamb, the hard switch campaign
impacted the market starting prior to the February 14, 2014 announcement and continued to
impact the market well past the entry of the injunction and through generic launch in July 2015.
See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 52-68; O’Shaughnessy Decl. Ex. 55, Berndt
Reply Report ¶¶ 9-33; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 89-118; O’Shaughnessy
Decl. Ex. 56, Lamb Reply Report ¶¶ 37-55, 60-100.
While Judge Sweet directed Forest to make the continued availability of Namenda IR
known “in the same or substantially similar manner in which they informed them of Defendants’
plan to discontinue Namenda IR in February 2014,” Forest’s effort to inform the public of the
continued availability of Namenda IR was far more limited than its communication of the plan to
withdraw the product. William Kane of Forest noted that in announcing the withdrawal of
Namenda IR, Forest “deployed a comprehensive communications effort across stakeholders to
achieve this goal, and we continue to add new tactics.” Litvin Decl. Ex. 166, FRX-AT-
03793847-856 at 3849. For its withdrawal campaign, Forest spent more than $575,000.00 to
send 5 waves of 2,603,932 emails to caregivers, health care professionals and pharmacists. Litvin
Decl. Ex. 474, Cremieux Dep. Ex. 9, FRX-AT-03749306-08 (May 1, 2015 email to William
Kane, Julie Snyder, and Elizabeth Fung discussing the “multiple waves of emails to care givers,
pharmacists and [long-term care] on discontinuation”). For instance, just an email attaching an
excel report from just one of the vendors that Forest used in its discontinuation communication
campaign, Rosetta.com, reported on the 2.1 million emails sent to caregivers about the
discontinuance in 2014 and the 465,000 emails sent to healthcare providers about the
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514
discontinuance in 2014. Id. Forest’s claims concerning the number of post-injunction
communications were far fewer and less frequent. Dr. Berndt summarized the relative nature and
extent of the withdrawal and the communications pursuant to the Court’s injunction.
IR Discontinuation
Announcements sent from
February 14, 2014 to June
10, 201451
IR Continuation
Announcements (mailed
January 11, 2015 without
reference to appeal)
IR Continuation
Announcements sent
January 11, 2015
(specifically referencing
appeal)
150,000 physicians sent
letters, emails and online
messages
Undetermined number of
the 900,000 letters mailed to
health care plans, managed
care and pharmacies
Remainder of 900,000
electronic communications
to physicians, pharmacists,
caregivers and managed
care plans
200,000 pharmacists sent
letters, emails and chain
announcements
LTC professionals sent
letters and emails
Health plans were contacted
and provided with form
letters to forward to
physicians and patients
1.5 million caregivers sent
emails, letters and pharmacy
messages
Toll free hotline created for
caregivers, physicians, office
staff and pharmacists
Banner ad on Namenda and
partner websites
Pop-up ad on Namenda
website noting continued
sale “in accordance with a
court order, which we are
appealing.”
Forest’s detail
representatives met with
physicians, long term care
facilities, and pharmacists
from February 2014 through
the summer of 2014 to
encourage immediate
switching to avoid
disruption.
Before the injunction was
formally issued, Forest
notified its detail
representatives that it “will
immediately appeal the
decision.”
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O’Shaughnessy Decl. Ex. 55, Berndt Reply ¶ 25 (footnotes omitted).
Moreover, a majority of Forest’s communications specifically referenced Forest’s plans
to appeal the injunction decision until the injunction was affirmed in May 2015, just two months
before generic entry. See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 56-68; O’Shaughnessy
Decl. Ex. 55, Berndt Reply Report ¶¶ 21-27; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶
111-12; O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 71-73. See also Litvin Decl. Exs.
469 and 486, Cremieux Exhibits 10, 11 (Forest’s briefs appealing the injunction). Forest also
communicated its challenge to the injunction in public statements to investors. When asked how
the December 2014 injunction would affect Forest’s plans to convert the market to Namenda
XR, Brent Saunders replied “the key for us, obviously, is we’re appealing the [ruling] and the
stay.” Litvin Decl. Ex. 513, Bloomberg Transcript, Goldman Sachs CEO Unscripted Health Care
Conference, Section, Jan. 6, 2015 at 8. Moreover, Forest instructed its sales representatives and
managers to inform customers that it had “appealed the decision and expect more information to
be available in February.” Litvin Decl. Ex. 514, FRX-AT-03794674 (Cremieux Ex. 4) (letter to
Namenda XR sales reps and managers informing them of the injunction decision and indicating
that if they “get questions about...the plans for IR” they should communicate that “[w]e have
appealed the decision”); Litvin Decl. Ex. 329, Forest Rule 30(b)(6) Julie Snyder Dep. (Oct. 11,
2017) Ex. 7, FRX-AT-03794674 (same).
Forest’s written communications also referenced its intent to appeal the injunction
decision. Litvin Decl. Ex. 479, FRX-AT-03670547 (press release noting Forest’s intention to
“immediately appeal the [injunction] decision”). Forest sent letters to healthcare providers,
pharmacists and caregivers stating that Forest was “appealing” the injunction order, and
communicated the same message on the WebMD website. Litvin Decl. Ex. 515, Cremieux Exs.
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516
6-8, FRX-AT-04288492 (“Dear Healthcare Provider” letter noting Forest “plans to continue the
sale” of Namenda “in accordance with a court order, which we are appealing”), Litvin Decl. Ex.
517, FRX-AT-04287221 (“Dear Customer” letter noting Forest “plans to continue the sale” of
Namenda “in accordance with a court order, which we are appealing”), Litvin Decl. Ex. 516,
FRX-AT-03745344 (email from WebMD sent to healthcare providers containing letter from
Forest stating its “plans to continue the sale” of Namenda “in accordance with a court order,
which we are appealing”); Litvin Decl. Ex. 329, (a compilation of three exhibits from Deposition
of Julie Snyder Dep. at Exs. 8-10); Litvin Decl. Ex. 328, Snyder Dep. at 129:18-21 & Ex. 9.
In a pop-up message on the Namenda website following the Court’s injunction, Forest
stated that it planned to continue selling Namenda IR per the Court’s order, but also noted that it
planned to appeal the order. Litvin Decl. Ex. 109, FRX-AT-01819478-81 at 78 (screenshot of
pop-up message). Defendants have not pointed to any evidence that they subsequently engaged
in a communications campaign after it lost appeal. See O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶ 74.
Defendants’ economist, Dr. Pierre-Yves Cremieux, agreed that non-lawyers would
understand the message of Forest’s appeal to mean that Forest “disagree[d]” with the injunction
and had decided to “go to a higher court to see whether they can convince the higher court that,
in fact the lower court’s decision was in error.” Litvin Decl. Ex. 468, Cremieux Dep. at 13:4-21.
Thus, instead of simply informing the healthcare providers, pharmacists and caregivers that
Namenda IR would stay on the market, Forest engaged in a communications plan to create
uncertainty by informing healthcare providers, pharmacists and caregivers that the injunction
was being appealed and therefore may not stay in place. O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶ 71. In other words, Forest sowed continuing fear, uncertainty and doubt, as
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Forest’s CEO stated in January 2015 that Forest was “optimistic” that the Second Circuit would
overturn the lower court’s “unprecedented” preliminary injunction. O’Shaughnessy Decl. Ex. 55,
Berndt Reply ¶ 21. See Responses to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398. DPPs have expressly admitted the fact as stated, and the remaining pages of their
objections are nothing more than improper argument or a recitation of different purported facts,
but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186 n.3; Fed. R. Civ.
P. 56(e)(2). Additionally, DPPs’ response does not provide any evidentiary basis to contest the
statement, but instead attempts to “contextualize or dispute the relevance of the statement,”
which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S. Dist. LEXIS
73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
To the extent that further objection is required, Forest points out that the exact language
of Judge Sweet’s injunction required Forest to “inform healthcare providers, pharmacists,
patients, caregivers, and health plans of this injunction . . . and the continued availability of
Namenda IR in the same or substantially similar manner in which they informed them of
Defendants’ plan to discontinue Namenda IR in February 2014.” O’Shaughnessy Decl. Ex. 288,
FRX-AT-01747641 at 7641-42 (emphasis added). Judge Sweet’s injunction did not require
Forest to exactly duplicate all forms of communication to all those potentially affected by any
communication with Forest, and Forest performed the required outreach to those contacted in
February 2014. O’Shaughnessy Decl. Ex. 290, Snyder Decl. ¶¶ 4-5. The State of New York was
unaware of any failure by Forest in connection with communication obligations under the
injunction and affirmatively stated that Forest fulfilled its obligations; Judge Sweet endorsed that
Forest complied with these provisions in agreeing to dismiss the action. O’Shaughnessy Decl.
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518
Ex. 291, at 3. And as this Court has repeatedly stated, the injunction “blunted much of the
success of Forest's ‘hard switch.’” Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis
PLC, 15-cv-07488, 2016 U.S. Dist. LEXIS 128349, at *30 (S.D.N.Y. Sept. 13, 2016).
Additionally, DPPs’ reliance on Litvin Decl. Ex. 474, Cremieux Dep. Ex. 9, FRX-AT-03749306-
08 is misplaced. That document confirms that less than 9% of the withdrawal emails were even
opened and, moreover, less than 2% clicked the link in the email. Id.
485. Forest complied with the injunction by compiling all of the communication sent
as part of its February 2014 announcement and sent communications to the same list of
individuals and entities in order to ensure that every individual who received notice of the
February 2014 announcement also received notice that Forest would maintain its supply of
Namenda IR.
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶¶ 4-5; Ex. 81, FRX-AT-03670529
(Actavis press release providing news of the injunction)
Public Documents: Ex. 291, Settlement Agreement at 3, New York. v. Actavis,
plc, No. 1:14-cv-07473 (S.D.N.Y. Nov. 30, 2015) (ECF No. 96-1) (indicating
Forest compiled with the injunction and informed constitutes of Namenda IR’s
continued availability); Mem. Decision & Order at 1, 16, In re Namenda Direct
Purchaser Antitrust Litig., No. 15-cv-07488 (S.D.N.Y. May 23, 2017) (ECF No.
253) (describing the injunction as “requiring Forest to affirmatively undo the
effects of its [February 2014] announcement of the withdrawal”).
Defendants’ Evidence: Ex. 325, Snyder Dep. 115:3-10, 139:13-25.
Response: Admitted in part and denied in part. It is admitted that Forest was required
to make such communications. However, it is denied that Forest “complied” with the injunction.
The injunction required Forest to “inform healthcare providers, pharmacists, patients,
caregivers, and health plans of this injunction (and provide a copy of the injunction or other
means to easily view the injunction) and the continued availability of Namenda IR in the same or
substantially similar manner in which they informed them of Defendants’ plan to discontinue
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519
Namenda IR in February 2014.” O’Shaughnessy Decl. Ex. 288, FRX-AT-01747641 at ‘641-642
(December 2014 Injunction) (emphasis added). Forest did not do so. Instead, the
communications it sent were not the same in number or in frequency as the communications it
made concerning the hard switch strategy, and Forest sowed fear, confusion and doubt by noting
that it was appealing the injunction decision. See O’Shaughnessy Decl. Ex. 81, FRX-AT-
03670529 (Actavis press release providing news of the injunction, explicitly stating that
“[Forest] will immediately appeal the [injunction] decision”). See also Responses to ¶¶ 397, 398,
484.
Forest’s Objection: Forest incorporates by reference its objections to DPPs’ responses to
¶¶ 397-398, 425, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
486. The Namenda XR adoption rate as of the injunction was not statistically different
from the adoption rates that would have existed has no announcement been made.
Defendants’ Evidence: Ex. 54, Fowdur Report ¶¶ 125-127, 131.
Response: Denied. Dr. Fowdur uses flawed and unreliable regression analyses to
come to the conclusion that the “Namenda XR adoption rate as of the injunction was not
statistically different from the adoption rates that would have existed had no announcement been
made.” See O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 37-43. Further, the actual XR
conversion rate is higher than the but-for conversion rate in every month after the hard switch
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was announced in February 2014 (including December 2014, the month of the injunction). Dr.
Lamb computed the actual and but-for conversion rates (see O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶ 98 Fig. 4, copied below):
Furthermore, the injunction did not undo or eliminate the effect of Defendant’s hard
switch strategy. See Response to ¶ 484 (detailing this evidence).
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ response to ¶
484. Dr. Lamb’s criticisms of Dr. Fowdur’s analyses do not contest that the analyses themselves
find exactly what the fact states, and DPPs have not moved to exclude Dr. Fowdur’s analyses.
Thus, the only evidence DPPs cite to suggest that the adoption rates as of the injunction were
different from the adoption rates that would have existed but-for the announcement consists of
the opinions of Dr. Lamb and Dr. Berndt that simply average forecasts and assume that the
average reflects Namenda XR’s share in the but-for world, which are inadmissible for the
reasons Forest has explained. Mem. of Law in Supp. of Forest’s Mot. to Exclude Opinions and
Testimony of Dr. Ernst Berndt & Dr. Russell Lamb Regarding Forecast Averages, dated Nov.
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521
17, 2017.
As a result, DPPs’ response consists of improper argument or a recitation of different
purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d at 186
n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any evidentiary
basis to contest the statement, but instead attempts to “contextualize or dispute the relevance of
the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter, 2015 U.S.
Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted. Fed. R. Civ.
P. 56(e)(2).
Q. The January 2015 Continued-Availability Announcement Undid Any
Purported Harm of the February 2014 Announcement
487. Judge Sweet’s injunction prevented Forest from halting sales of Namenda IR and
required Forest to affirmatively undo the effects of the February 2014 announcement.
Undisputed Record Evidence: Mem. Decision & Order at 16 (May 23, 2017), ECF No.
253
Plaintiffs’ Admissions: DPPs’ Opp’n to Mot. to Dismiss at 38.
Response: Admitted in part and denied in part. It is admitted that Forest was
prevented “from halting sales of Namenda IR” permanently (Forest had stopped manufacturing
Namenda IR before the injunction, see ¶ 397). In all other respects, this paragraph is denied. The
injunction did not require Forest to “affirmatively undo the effects of the February 2014
announcement,” and no such language can be found anywhere in the injunction order.
O’Shaughnessy Decl. Ex. 288, FRX-AT-01747641 at 7641. As Plaintiffs detailed above, the
communications Forest did send were not the same in number or in frequency as the
communications it made concerning the hard switch strategy, and further sowed confusion by
raising doubts as to whether Namenda IR would remain on the market as Forest was appealing
the injunction. See Responses to ¶¶ 397, 398, 484.
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Moreover, as Dr. Lamb concludes, Forest’s post-injunction conduct did not “undo” the
effects of its hard switch strategy. As Dr. Lamb notes, “Dr. Fowdur’s claim that because the
injunction required Forest to ‘undo’ the effects of the Hard Switch, it must actually have done so,
is conclusory and ignores the reality of the pharmaceutical supply chain. Physicians, not patients,
were the primary focus of the Hard Switch conduct, and I have seen no evidence, nor has Dr.
Fowdur identified any evidence, that physician behavior changed.” O’Shaughnessy Decl. Ex. 56,
Lamb Reply Report ¶ 70. See also O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶18
(“Namenda XR prescriptions, unlike most prescriptions given to patients without Alzheimer’s,
would be expected to be almost exclusively driven by physicians’ decisions, which, as I have
written about before, tend largely to be concentrated”). This means physician prescription
patterns are bound by habit, and once physicians got into the habit of writing Namenda XR
prescriptions, the physician would be likely to maintain that habit. O’Shaughnessy Decl. Ex. 56,
Lamb Reply Report ¶ 87; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶18. Forest’s
strategy was to take advantage of such prescribing habits. See, e.g., Litvin Decl. Ex. 483, FRX-
AT-01630868-888 at 884 (draft speech by Jerry Lynch noting that “Physicians have habits and
old habits die hard.”); Litvin Decl. Ex. 484, FRX-AT-04195587-98 at 89, 96-97 (draft
presentation by Maria Theodore noting a goal of switch campaign was to affect physician
prescription habits). Once physicians were habituated to prescribing Namenda XR, they would
likely not proactively consider the benefits of generic entry to go back to writing prescriptions
for Namenda IR. See O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶ 18.
Defendants’ citation to the motion to dismiss opposition brief does not support their
proposition. Plaintiffs’ motion to dismiss opposition never stated that Forest “undid” the effects
of its hard switch strategy, merely that the court required Forest to send communications
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concerning ongoing supply. And the Court’s May 23, 2017 opinion simply observed that Forest
was directed to inform patients and physicians concerning Namenda IR, and never found that
Forest “undid” the effects of the price announcement.
Forest’s Objection: DPPs ignore that this Court already found in its summary judgment
decision that the NYAG Action injunction “require[d] Forest to affirmatively undo the effects of
its announcement of the withdrawal.” Summ. J. Mem. Decision & Order 1, In re Namenda
Direct Purchaser Antitrust Litig., No. 15-cv-07488-CM (S.D.N.Y. May 23, 2017), ECF No. 253.
Thus, DPPs have admitted the first part of the stated fact, and offered no evidence to contradict
that the injunction required Forest to undo the effects of the announcement. Dr. Lamb repeatedly
admitted that he performed no surveys or empirical analyses of whether physicians actually
changed their prescribing practices as a result of Forest’s conduct. O’Shaughnessy Decl. II Ex.
395, Lamb (Nov. 10) Dep. 78:6-79:13; 79:16-81:9; 120:1-121:4. As such, the fact is undisputed,
and should be deemed admitted. Fed. R. Civ. P. 56(e)(2). Additionally, Forest hereby
incorporates its objections to DPPs’ responses to ¶¶ 397-398, and 484.
488. “[A]t the time of the injunction and Forest’s public announcement that it had
cancelled the planned withdrawal and would continue to supply Namenda IR, the level of
adoption of Namenda XR in the actual world was consistent with the corresponding level in the
but-for world.”
Defendant’s Evidence: Ex. 54, Fowdur Rep. ¶131.
Response: Denied. It is denied that Forest announced that it has “cancelled the
planned withdrawal,” as it continued to tell market participants that it was appealing the
injunction decision, creating uncertainty as to whether Namenda IR would remain on the market.
See Response to ¶¶ 397, 398, 484. It is further denied that the level of adoption of Namenda XR
in the actual world was consistent with the corresponding level in the but for world. As this
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Court held in its summary judgment opinion granting plaintiffs estoppel:
Both Judge Sweet and the Second Circuit concluded that the result of the hard
switch would be that a “significantly higher” number of patients would convert
from Namenda IR to Namenda XR than if Forest had not attempted to pull
Namenda IR from the market. Namenda I, 2014 WL 7015198, at *28; id. at *39
(hard switch would result in “inflation of [Namenda] XR’s share of the
memantine market”); see also Namenda II, 787 F.3d at 655 (holding that Forest’s
hard switch “has the effect of significantly reducing usage of rivals’ products”
(quoting Microsoft, 253 F.3d at 65)). Forest’s own internal projections estimated
that, using only soft-switch tactics, only 30% of Namenda IR patients would
voluntarily switch to Namenda XR. Namenda I, Unredacted Op. at 80. Under a
hard-switch strategy, that percentage skyrocketed to 80%-100%. Id.
***
Importantly, Judge Sweet found that Forest’s hard-switch tactics had already
resulted in more customers converting from Namenda IR to Namenda XR than
Forest had estimated would convert voluntarily. At the time the preliminary
injunction was entered, “about 50% of existing patients [had] converted from
Namenda IR to Namenda XR in anticipation of the lack of availability of
Namenda IR.” Namenda I, 2014 WL 7015198, at *29. This is significantly more
than the 30% that Forest had estimated would convert if only soft-switch tactics
were employed.
In re Namenda Direct Purchaser Antitrust Litig., No. 15 Civ. 7488 (CM), slip op. at 24-25 (May
23, 2017) (unredacted version) (emphasis added). See also O’Shaughnessy Decl. Ex. 6,
Unredacted Sweet Op. at ¶¶ 134, 142, & p.117. These findings are binding on Defendants here.
Moreover, as explained by Dr. Berndt and Dr. Lamb, the hard switch campaign impacted the
market starting prior to the February 14, 2014 announcement and continued to impact the market
well past the entry of the injunction and through generic launch in July 2015. See O’Shaughnessy
Decl. Ex. 231, Berndt Report ¶¶ 52-68; O’Shaughnessy Decl. Ex. 55, Berndt Reply Report ¶¶ 9-
33; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 89-118; O’Shaughnessy Decl. Ex. 56, Lamb
Reply Report ¶¶ 37-55, 60-100.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398, 418, 484, and 486. DPPs’ response consists of improper argument or a recitation of
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different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
Moreover, Forest objects to DPPs’ assertion that the above quotation from the Court’s
summary judgment order has preclusive effects as to the issue of causation and damages, as
DPPs’ did not seek collateral estoppel on the issue of causation or damages during the original
briefing on summary judgment.
To the extent that any further clarification is required as to the relevance of this fact,
Forest refers the Court to its ruling on Sept. 13, 2016:
Plaintiffs have alleged an injury, because they allege that they were forced to pay for
certain patients' memantine treatment at brand-name prices because these patients
switched to Namenda XR prior to the entry of the injunction. Assuming Plaintiffs can
ultimately prove that these patients switched to Namenda XR because of the
announced withdrawal of Namenda IR, it is entirely irrelevant that the hard switch
never occurred and that Namenda XR was priced below Namenda IR prior to the
injunction. Plaintiffs' injury comes from having to pay for Namenda XR after generic
entry — when absent Defendants' anticompetitive conduct, their patients' prescriptions
would have been filled by a far cheaper generic (which, as Defendants state, was
available for less than 10% of the July Namenda IR price).
Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis PLC, 15-cv-07488-CM, 2016
U.S. Dist. LEXIS 128349, at *38-39 (S.D.N.Y. Sept. 13, 2016) (emphasis added).
489. Forest’s effort to communicate that it would continue to sell Namenda IR in 2015
“mirrored the communications made in February 2014 announcing withdrawal.”
Defendants’ Evidence: Ex. 290, Snyder Decl. ¶¶ 4-5.
Response: Denied. Forest’s efforts to communicate to market participants about the
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injunction were dwarfed by the overwhelming and pervasive months-long campaign of
communicating the Hard Switch to the market. Additionally, in its communications about the
injunction, Forest consistently and pervasively noted that it was appealing the decision, sowing
fear, uncertainty, and doubt in the market with respect to whether Namenda IR would remain on
the market. See Response to ¶¶ 397, 398, 484.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398, 418, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Accordingly, the fact should be deemed admitted.
Fed. R. Civ. P. 56(e)(2).
490. The efforts to communicate the Namenda IR withdrawal in February 2014 “was
thwarted by the injunction entered in the New York Attorney General matter.”
Plaintiffs’ Admissions: Ex. 363, Lamb Dep. 35:1-22.
Response: Admitted in part, denied in part. It is admitted that the injunction required
Forest to “continue to make Namenda IR (immediate-release) tablets available on the same terms
and conditions applicable since July 21, 2013[.]” O’Shaughnessy Decl. Ex. 288, FRX-AT-
01747641 at 7641-42 (December 2014 Injunction). It is denied that the injunction “thwarted” or
otherwise eliminated the effects of Defendants’ misconduct. See Response to ¶¶ 397, 398, 484.
Moreover, a vast majority of Forest’s communications concerning the injunction
prominently featured references to the fact that Forest was appealing the injunction. See
O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 56-68; O’Shaughnessy Decl. Ex. 55, Berndt
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Reply Report ¶¶ 21-27; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 106-111;
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 69-75; Litvin Decl. Ex. 479, FRX-AT-
03670547 (press release noting Forest’s intention to “immediately appeal the [injunction]
decision”). See Response to ¶¶ 397, 398.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398, 418, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Additionally, DPPs’ response does not provide any
evidentiary basis to contest the statement, but instead attempts to “contextualize or dispute the
relevance of the statement,” which is an improper use of a Rule 56.1 submission. Funnekotter,
2015 U.S. Dist. LEXIS 73221, at *24-25. Nor do DPPs dispute that their own expert testified
that Forest had attempted a hard switch but “that effort was thwarted by the injunction that was
entered in the New York Attorney General matter.” O’Shaughnessy Decl. I Ex. 363, Lamb (Oct.
6) Dep. 35:5-22. Accordingly, the fact should be deemed admitted. Fed. R. Civ. P. 56(e)(2).
R. The New York Attorney General Confirmed the Effect of the Announcement
was Undone By Forest’s Compliance with the Injunction
491. At no time before, during or after the injunction was Namenda IR made
unavailable or otherwise limited in distribution.
Undisputed Record Evidence: Ex. 291, NYAG Settlement Agreement, p. 3;
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
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Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The NYAG Settlement Agreement is
hearsay, and a party may not rely upon inadmissible hearsay in Rule 56 proceedings. See, e.g.,
Spector v. Experian Info. Servs. Inc., 321 F. Supp. 2d 348, 352 (D. Conn. 2004).
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398, 418, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2).
492. The injunction was effective in protecting the competition in the relevant market
and permitting lower cost generic drugs to enter the market in July 2015 and subsequently.
Undisputed Record Evidence: Ex. 291, NYAG Settlement Agreement, p. 3;
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The NYAG Settlement Agreement is
inadmissible hearsay, and a party may not rely upon inadmissible hearsay in Rule 56
proceedings. See, e.g., Spector v. Experian Info. Servs. Inc., 321 F. Supp. 2d 348, 352 (D. Conn.
2004). By way of further response, even after the injunction, Namenda IR was still under the
threat of removal, as Forest consistently and pervasively noted that it was appealing the decision.
See O’Shaughnessy Decl. Ex. 231, Berndt Report ¶¶ 56-68; O’Shaughnessy Decl. Ex. 55, Berndt
Reply Report ¶¶ 21-27; O’Shaughnessy Decl. Ex. 193, Lamb Report ¶¶ 106-111;
O’Shaughnessy Decl. Ex. 56, Lamb Reply Report ¶¶ 69-75. Forest did so to maintain fear,
uncertainty, and doubt in the market with respect to whether Namenda IR would remain on the
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market. See Response to ¶¶ 397, 398, 484.
Defendants cite no evidence, and Plaintiffs are aware of none, that Forest engaged in a
campaign to broadly communicate that it had lost the appeal.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398, 418, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2).
493. “As a result of the injunction, Alzheimer’s patients have not been forced to
switch from Namenda IR to Namenda XR, and instead have been able to select which drug to
use based on their and their physicians’ views of which drug is best for them.”
Statements from Publicly Available Sources: Nov. 25, 2015 Press Release:
https://ag.ny.gov/press-relea s e/ag -schneiderman-announce s-resolution-lawsuit-
protectedalzheimer%E2%80%99s- patients
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The NYAG press release is inadmissible
hearsay, and a party may not rely upon inadmissible hearsay in Rule 56 proceedings. See, e.g.,
Spector v. Experian Info. Servs. Inc., 321 F. Supp. 2d 348, 352 (D. Conn. 2004). By way of
further response, this paragraph is denied, as the New York Attorney General’s expressed hopes
for the effects of the injunction were not borne out as demonstrated by the record in this case.
See Responses to ¶¶ 397, 398, 484.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
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397-398, 418, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
at 186 n.3; Fed. R. Civ. P. 56(e)(2). Accordingly, the fact should be deemed admitted. SESAC,
1 F. Supp. 3d at 186 n.3; Fed. R. Civ. P. 56(e)(2).
494. “Patients who wished to remain on Namenda IR during early 2015 and then
switch to the generic version when it became available over the summer were able to do so
without any disruption in their medical treatment. In addition, Alzheimer’s patients who wish to
take Namenda XR instead of Namenda IR are also free to do so.”
Statements from Publicly Available Sources: Nov. 25, 2015 Press Release:
https://ag.ny.gov/press-release/ag-schneiderman-announces-resolution-lawsuit-
protected-alzheimer%E2%80%99s-patients.
Response: Denied. Defendants cite no evidence that supports their contention and it
is therefore denied. See Koch v. Town of Brattleboro, 287 F.3d 162, 165 (2d Cir. 2002) (Rule 56
“places the initial burden on the moving party to identify ‘those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.’”) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The NYAG press release is hearsay, and a
party may not rely upon inadmissible hearsay in Rule 56 proceedings. See, e.g., Spector v.
Experian Info. Servs. Inc., 321 F. Supp. 2d 348, 352 (D. Conn. 2004). By way of further
response, this paragraph is denied, as the New York Attorney General’s expressed hopes for the
effects of the injunction were not borne out as demonstrated by the record in this case. See
Response to ¶¶ 397, 398, 484.
Forest’s Objection: Forest hereby incorporates its objections to DPPs’ responses to ¶¶
397-398, 418, and 484. DPPs’ response consists of improper argument or a recitation of
different purported facts, but no evidentiary basis to contest the statement. SESAC, 1 F. Supp. 3d
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