Bracco Diagnostics, Inc. v. Amersham Health, Inc.

AMENDED OPINION

FREDA L. WOLFSON, District Judge.

Glossary of Abbreviations

AHI Amersham Health Ine. (U.S.-based Counterclaim Plaintiff)

ASD GEH Area Sales Director

AWC Adequate and well-controlled study

BDI Braceo Diagnostics Inc.

[witness] D Designated deposition testimony

[witness] Dec Designated declaration

CE Continuing Education for doctors, nurses and technicians

CIN Contrast Induced Nephropathy or renal damage caused by x-ray contrast medium

CM Contrast Medium or Contrast Media

CME Continuing Medical Education for doctors

CMS Centers for Medicare and Medicaid Services

CT Computer Tomography. A type of x-ray procedure where the CM is given by i.v. administration

CT DCAM Novation’s DCAM for CT (i.e., x-ray) contrast media

CT+MR DCAM Novation’s DCAM for both CT (i.e., x-ray) and MR contrast media

Cx Braeco’s Proposed Post-Trial Conclusion Of Law at paragraph “x”

Dx: y Defendant’s Trial Exhibit “x” at page “y” (where y is the last three numbers of a Bates number, if applicable)

DCAM Decision Criteria Award Matrix

DHRxns Delayed Hypersensitivity Reactions

Dual DCAM Novation’s DCAM for a dual source award for both CT (i.e., x-ray) and MR contrast media

EC Financial Criteria

FDA United States Food and Drug Administration

GEH GEH Healthcare, which acquired the three named defendants, who in turn acquired Amersham and Nycomed

GPO Group Purchasing Organization

HOCM High Osmolar Contrast Medium

intra-arterial (form of administration directly into an artery)

Intra-venous (form of administration directly into a vein)

IOCM GEH’s trademarked term, Isosmolar Contrast Medium

ITB Novation’s June 14, 2004 “Invitation To Bid”

JACC Journal of the American College of Cardiology

KOL Key Opinion Leader

LBB “Low Best Bid” or “Low Best Bidder”

LOOM Low Osmolar Contest Medium

MA Meta-Analysis, a type of clinical study analysis

MACE Major Adverse Cardiac Events or Major Adverse Clinical Events, depending on the study design

MRDCAM Novation’s DCAM for MR contest media

MRI magnetic resonance imaging contrast media

NAC N-acetylcysteine

NEJM New England Journal of Medicine

NFC Non-Financial Criteria

NQWMI Non-Q-wave Miocardial Infarction

RFA GEH’s responses to Braeeo’s requests for admissions

RFP GPO Request For Proposal

OTSheet Omnipaque Toss Sheet

Px:y Plaintiff’s Trial Exhibit “x” at page “y” (where y is the last thi-ee

*397

numbers of a Bates number, if applicable)

PCI percutaneous cardiac intervention

PO Pretrial Order

POA Plan of Attack or Plan of Action

PTCA Percutaneous Transluminal Coronary Angioplasty

SR Systematic Review (type of clinical study analysis)

TCT Transcatheter Cardiovascular Therapeutics (TCT) Scientific Symposium

TF Novation’s ICM Task Force

URTBrochure Unchallenged Renal Tolerability Brochure

xTy Trial Transcript Volume “x” at page “y”

WAT Visipaque Value Analyis Tool

Contrast Agents

Isovue Braceo x-ray contrast agent

ProHance Braceo MRI contrast agent

MultiHance Braceo MRI contrast agent

Visipaque GEH x-ray contrast agent

Omnipaque GEH x-ray contrast agent

Omniscan GEH MRI contrast agent

Optiray Tyeo/Mallinckrodt x-ray contrast agent

Hexabrix Tyeo/Mallinckrodt x-ray contrast agent

This matter comes before the Court upon a Complaint brought by Plaintiff Braceo Diagnostics Inc. (referred to herein as “Braceo”) against Defendants Amersham Health Inc., Amersham Health AS, and Amersham PLC (collectively referred to herein as “GEH”) for alleged false advertising in violation of the Lanham Act. In response, GEH filed a Counterclaim against Braceo for alleged false advertising of its own line of products. Braceo and GEH have competing product lines in the contrast medium healthcare industry. The crux of Bracco’s case is that GEH has falsely advertised the superiority of its product, Visipaque, over Bracco’s product, Isovue. The Court conducted a thirty-nine day bench trial with numerous experts

1

and witnesses testifying as to each party’s product lines and the underlying clinical studies upon which GEH and Braceo have based their advertising campaigns.

In light of the evidence presented at trial, the Court concludes that GEH did promote false messages which were sufficient in number to constitute actionable commercial advertisements or promotions under the Lanham Act, however the Court finds that Braceo has failed to establish a causal nexus between GEH’s false advertisements and Bracco’s alleged lost profit damages. In that regard, the Court determines that the greater number of GEH’s advertisements were in fact true and based on reliable scientific studies. The messages that the Court finds false are those that extrapolate beyond the studies’ results. In connection with Bracco’s claim, the Court finds that an injunction and damages for post and future corrective advertising are appropriate remedies to prevent future violations of the Lanham Act. As to GEH’s counterclaim, GEH dismissed its claim for damages and Braceo has stipulated that it no longer uses the offending advertisements. Thus, although the Court finds that certain of Bracco’s ads were false, nonetheless, an injunction is not appropriate in this case. In addition, the Court imposes an alternative dispute mechanism applicable to both parties for safeguarding against any future false advertisements.

I. Overview

A. Parties and Product Lines

GEH and Braceo market and sell x-ray contrast media (“CM”) in the United States. CM are classified by osmolality. HOCM (high osmolar CM) have osmolalities of greater than 1500 mOsm/kg. LOCM (low osmolar CM) have osmolalities between 600 and 850 and include Omnipaque (iohexol), Isovue (iopamidol), Hexa

*398

brix (ioxaglate), Ultravist (iopromide), Iomeron (iomeprol), and Optiray (ioversol). The osmolality of blood is approximately 290 mOsm/kg. Both GEH and Braceo market LOCM; GEH sells Omnipaque and Braceo sells Isovue. In addition, GEH also markets a product called Visipaque (iodixanol) which it classifies as isoosmolar or isotonic, (i.e.-its osmolality equals blood). Visipaque is referred to in various medical literature as an IOCM (iso-osmolar CM). Part of GEH’s advertising campaign is that its iso-osmolar CM performs better than LOCM. Visipaque was introduced in 1996, ten years after Omnipaque and Isovue were marketed and is the only “IOCM” available in the U.S.

B. Procedural History

On December 16, 2003, Braceo filed a four count Complaint in the District of New Jersey against GEH alleging: (1) dissemination of false and misleading advertisements in violation of Section 43(a) of the Lanham Act; and (2) N.J.S.A. 56:4-1,

et seq.;

(3) violations of the common law of unfair competition; and (4) negligent misrepresentations. GEH filed an Answer and two counterclaims against Braceo alleging: (1) dissemination into commerce of allegedly false and misleading statements concerning the relative safety of Omnipaque, Visipaque, and Isovue in violation of Section 43(a) of the Lanham Act; and (2) N.J.S.A. 56:4-1,

et seq.

GEH’s counterclaim was filed against Braceo and its foreign affiliates, Braceo S.p.A. and Braceo Imaging S.p.A. However, pursuant to an Order entered on September 7, 2004, GEH’s counterclaim against Bracco’s foreign affiliates was dismissed for lack of personal jurisdiction. Motions for Summary Judgment were denied by the Court, after which, a thirty-nine day bench trial was conducted between the period of May 7, 2007 and December 2007, followed by further written submissions. The Court held a hearing on May 15, 2008, wherein the Court resolved evidentiary objections regarding the admission of disputed exhibits. Subsequently, the parties submitted proposed Findings of Fact and Conclusions of Law, which were supplemented by Reply briefs and additional

Daubert

briefs to exclude expert testimony proffered by both sides.

II. Findings of Fact

A. Bracco’s Case in Chief

As set forth below, the Court finds that GEH advertises and promotes Visipaque with establishment claims asserting that studies show it is superior in several ways, including renal and cardiovascular safety, pain, heat and discomfort. The Court further finds that: the spike in Visipaque sales that started in 2003 was primarily due to the publication of the NEPHRIC study; GEH’s advertising of NEPHRIC through true renal ads and promotions also contributed significantly to GEH’s success with Visipaque; only a fraction of GEH’s ads were false; while these false ads were sufficient in number to constitute actionable promotions under the Lanham Act, they were not the cause of GPO contracts being awarded to GEH. In addition, the Court finds that the limited false ads disseminated by GEH were not willfully false because GEH relied on scientific studies, which have not been disproved, and that GEH had a protocol in place for approving advertisements that attempted to ensure against falsity.

1. GEH’s Establishment Claims Of Renal Superiority

In late 2002 to early 2003, GEH focused its ads and promotions on renal establishment claims based on the NEPHRIC study; GEH claimed that Visipaque had superior renal safety over competitor

*399

drugs or LOCM.

(See, e.g.,

P1672 (“[w]e will begin to shift our focus from a Excellent Patient Comfort/Cardiac Safety message to the prime message being Excellent Renal Tolerance”), P106, P849:932, P1269:219, P1147:261, P1265:203, P1266:208; 13 T 72, 16 T 95, 6 T 58-79,102-104, 17 T 69-70). These claims are of two types: the data (from NEPHRIC or other studies) show (a) Visipaque is superior to a LOCM or all LOCM or (b) Visipaque is as good as or better than LOCM with pretreatments.

2

GEH uses the term LOCM to obscure the fact that its own drug, Omnipaque, was the comparator in the NEPHRIC study, and to thereby lessen any impact on Omnipaque, specifically, and to generalize the results to all LOCM, including Isovue. (P1534, P1535, P1519, P1523; 13 T 62-63).

GEH designed and then planned to disseminate the claims through multiple promotional channels (print media, websites, GEH representatives, medical doctors and CME’s). (8 T 4-15,81-129, 135-37, 17 T 53,64-68; P869 (’03), P849 (’04), P2098 (’05)).

3

GEH determined that the claims were the most effective way to convert sales based on its experience,

(e.g.,

7 T 178), and marketing research (P196, P696, P1400, P1700, P1716:739, P1742, P2038; 13 T 27-28).

The GEH representatives were instructed in Plans of Action (“POA”)

(e.g.,

P210L559

(e.g.,

“less incidence of CIN”)), memoranda

(e.g.,

P102 (“top 3 messages”), PI04, P353, P398:394, P639:552 (“(CIN) in high-risk patients was 11X less likely ... than with LOCM”), P640, P661, P662, P696, P772, P1832:194, P2027, P4249; D790), training

(e.g.,

P651

(e.g.,

‘Visipaque is clinically proven to be ... safer for high risk patients”), P1136:370 (“safer”)) and Medical Bulletins

(e.g.,

P402:563

(e.g.,

“NEPHRIC data clearly demonstrate ... a significantly better renal safety profile than a traditional [LOCM], such as iohexol, in at-risk patients”), P538:888, P798:078) to disseminate the claims.

(E.g.,

P85, P632, P774, P1008, P1012, P1021, P1080, P1082, P1136, P1178, P1373:182, P1561, P1572:893, P1681, P1699, P1721, P2099, P2100, P2101, P3708; 8 T 68-81, 129-135, 148-80, 9 T 5-53, 65-80, 88-102).

4

The claims were then disseminated nationwide using print media, GEH representatives and continuing medical education (“CME”) presentations. The print media

(e.g.,

brochures, websites, presentations, articles) with extracted messages that were identified in Bracco’s pretrial

*400

brief and discovery responses and addressed at trial include:

5

• Press releases on its website:

“[]The NEPHRIC data clearly demonstrate that VisipaqueTM offers a significantly better renal safety profile than traditional low osmolar non-ionic contrast media in at-risk patients---- We believe that the data strongly support Visipaque as the agent of choice for these patient groups.” P2449:379, P69:915, P254:863, P772:340, P1448:898, P4149:p2; 7 T 68-69.

•

Computer Tomography (CT) brochures:

“Nonionic Dimer Provides Lower Osmolality, Reduced ... CIN” “CIN”: “Nonionic Dimer”: “Nonionic Monomer”: “f”. P410:965, 3649:408, 3649A:408; D2324:117.

•

Novation presentation:

“Isosmolar VISIPAQUE ... Demonstrated to significantly reduce incidence of Contrast-induced Nephropathy (CIN).” P2161:391. GEH rep efforts included the delivery of the claims and print media in face-to-face detailing of administrators, technicians, nurses and doctors, for which records were presented at trial from GEH’s sales call record system, emails and memoranda, e.g.”

6

•

Sales Calls Records:

“Discussed patient types that would benefit from Visipaque usage over Isovue. Re-affirmed with Nephric study.” P2312:A637284, P4049:A637284. “Discussed having hospital start using Visipaque for high-risk patients in CT. Detailed Nephric study and core visual aid to support benefits of isosmolar Visipaque vs. Isovue.” P2312:A637355, P4049:A637355. “[CJlinical studies, nephric etc show less risk nephrotox vs ... Isovue for [high risk] pts .... ” P2312:A659673, P4049:A659673. “reviewed why Visi. is the best for kidneys.” P2312:A670058, P4049A670058. “Approached dr. with nephric focus and differentiating vis from loem class with regards to osmoality. Reminded dr. that patients are 11 times likely to have CIN with the loem class than visi.” P3682:Omni/3727,4049:Omni/3727.

7

8

*401

•

Consorta detailing:

“Baluchi [from Consorta] asked about Isovue with respect to Omnipaque/LOCM as positioned in NEPHRIC. We made the point that Omnipaque represents a LOCM (gold standard) and confirmed his key take away that it is iso-osmolar versus low-osmolar that was studied, not necessarily Visipaque vs. Omnipaque.” P682:286. “I ... discussed the attributes of Isosmolar Visipaque including it’s impact on CIN-a clinical issue just coming to light; it’s elimination of costly drug therapies (fenladopan) to prevent CIN with std LOCM”. P793:514.

•

HPG detailing:

“Ami presented the Nephric data to Lew and he was very interested in the info.

He told her that one criticism of this paper was that it was not a head to head with Isovue. Ami showed him the list of references that prove the incidence of CIN with Isovue is equal to that of Omnipaque so it is reasonable to draw a correlation that the results of Nephric would be the same if Isovue had been used.

” P663:942 (emphasis added).

The Court also finds that GEH-sponsored CME presentations for doctors

(e.g.,

P849:946) delivered IOCM versus LOCM claims:

9

• 2001 CME On CIN:

“[R]ecent controlled trials have shown that

non-ionic Iso-osmolar contrast agents are superi- or to low-osmolar agents

in preventing CIN.” P425L210 (emphasis added). “The use of iodixanol in at-risk patients appears to minimize the risk of CIN even without additional pharmacological prophylaxis.” P425L212.

At trial, GEH’s sales rep, Mr. Joseph Murray, confirmed delivering these claims through the print media

(e.g.,

press releases and articles) and CME-type presentations to customers in order to convert sales to Visipaque.

(E.g.,

16 T 31-49, 56-58, 81-88, 97-114; 17 T 49-51, 64-132).

2. The Falsity Of GEH’s Renal Establishment/Superiority Claims

The Court finds that certain assertions made by GEH were supported by the studies’ (NEPHRIC and Chalmers) conclusions

(e.g.

— Visipaque may be renally superior over a LOCM — Omnipaque), while others were not (i.e.- — Visipaque may perform better than LOCM with prophylactics and Visipaque is renally superior over all LOCM). Braceo asserts that GEH’s representations are false and misleading because: (a) the NEPHRIC study omitted results and has flaws that contradict GEH’s claims (Pl.’s FOF ¶¶ 11-15,

*402

17); (b) the studies (NEPHRIC and Chalmers) cannot reliably (Pl.’s FOF ¶¶ 11-13) support a conclusion of Visipaque superiority over all LOCM; and (c) the weight of the clinical evidence is that Visipaque is not superior to all LOCM as a group or to Isovue individually (Pl.’s FOF ¶¶ 11-15, 17). For example, Braceo asserts that results of studies done with intra-arterial (“i.a.”) use are not reliable enough to predict with reasonable certainty intravenous (“i.v.”) results, (see P1733)

10

11; furthermore, Braceo points out that no studies compare Visipaque to a LOCM combined with pretreatments or even head-to-head with multiple LOCM.

The Court finds: (1) while there were flaws in NEPHRIC, those flaws do not vitiate its results; (2) the NEPHRIC and Chalmers studies are not unreliable in their conclusions; and (3) it has not been established by the weight of clinical evidence that Visipaque is superior to all LOCM as a group or to Isovue individually. Although there has never been one adequate and well-controlled (“AWC”) clinical study (let alone two, done the same way with the same drug) showing that Visipaque is superior to any LOCM (even Omnipaque), with or without pretreatments,

12

13 the Lanham Act does not demand such a rigorous finding. Nonetheless, although not dispositive, the FDA agrees with the Court’s findings in numerous letters sent to GEH, including one as recent as March 21, 2005, where it states that the results of the NEPHRIC study cannot be extrapolated to CM other than Omnipaque in GEH advertising. (P1894.)

To lay the foundation for Bracco’s claims, and GEH’s defenses, the parties first presented background clinical evidence at trial. The following pertains to such evidence: randomization in a clinical trial increases its reliability;

14

a primary endpoint is a clinically relevant endpoint around which a study is designed;

15

studies may also have secondary endpoints, which are of interest but are deemed to be of less importance to the study investiga

*403

tors;

16

a MA is a statistical combination of results from multiple studies;

17

a p-value is a statistical measure that provides a general estimate of the probability that two tested clinical strategies are different;

18

furthermore, the probability that two treatments are different can be roughly estimated as 1 minus the p-value.

19

After laying a foundation for generalized information regarding the interpretation of medical studies, the parties presented specific clinical evidence in connection with GEH’s claim that Visipaque is less nephrotoxic than other LOCM. Changes in renal function are commonly measured by serum creatinine (“SCr”).

20

Dr. Peter Aspelin, an M.D., Ph.D., a professor of medicine in Stockholm,

21

and the author of NEPHRIC, testified that CIN is commonly defined as an increase in SCr up to 3 days of 0.5 mg/dL, 25%, or both,

22

and that rises in SCr after 3 days may be due to factors other than administration of CM.

23

Braceo disputes this definition of CIN; it contends that rises in SCr after three days are significant. The Court need not determine the clinical significance of CIN after three days because while I find that such data is relevant to the weight given to a study’s conclusions, here I find that the use of either definition would not make the underlying study unreliable.

Nonetheless, it is undisputed that patients with both renal insufficiency (RI) and diabetes are at a higher risk for developing CIN, than patients with only RI or only diabetes.

24

In addition, Dr. Harold I. Feldman, an expert in internal medicine and nephrology, proffered by GEH, testified that patients with only diabetes have a lower risk than patients with only RI

25

and that greater contrast volume increases a patient’s risk of CIN,

26

while N-acetylcysteine (NAC) or sodium bicarbonate may reduce CIN.

27

Furthermore, it was established at trial, through expert testimony and exhibits, that there is a scientifically reasonable and widely held belief in the medical community that LOCM are less nephrotoxic than HOCM due to the reduced osmolality of LOCM.

28

This belief is also shared by Braceo.

29

As to LOCM, Dr. Feldman testified at trial, that as of February 2003, there was little evidence of differences in nephrotoxicity between Omnipaque and Isovue.

30

Bracco’s Dr. Spi

*404

nazzi testified, and published to his peers, that as of the date NEPHRIC was published, it was believed that all nonionic LOCM performed similarly even though he qualified the testimony as not being supported by “evidence in the field.”

31

Notwithstanding the prevailing belief in the field, the FDA found it to be misleading for GEH to advertise, based on the NEPHRIC results (comparing Visipaque to one LOCM, Omnipaque), that “Visipaque is safer than other conventional non-ionic contrast media.” (P1894). This implies that the FDA did not believe that there was sufficient support to conclude that all LOCM perform similarly. Thus, the FDA questioned, based on the NE-PHRIC study, claims of Visipaque superiority over ah LOCM as opposed to merely the LOCM tested in NEPHRIC.

GEH relies on several scientific studies to support its claim that Visipaque is less nephrotoxic than other LOCM, and hence has a better renal safety profile, but primarily, GEH relies on the Chalmers and NEPHRIC studies. Chalmers, first published in 1999, was a randomized head-to-head trial of Visipaque (iodixanol) and Omnipaque (iohexol) administered to patients with RI.

32

It showed Visipaque to be less nephrotoxic than Omnipaque.

33

NE-PHRIC was a double-bhnd, randomized, multi-center, head-to-head trial comparing the nephrotoxicity of Visipaque and Omnipaque in patients with RI and diabetes.

34

Dr. Aspelin was the principal investigator (“PI”) for NEPHRIC.

35

He has nearly 200 published papers and is a peer-reviewer for several journals.

36

Dr. Aspelin was not a consultant for'GEH and was not paid for his work on the NEPHRIC study, however, he did receive input from GEH regarding the formulation of the language used in his conclusions in NEPHRIC and indeed, GEH was the financial sponsor for the study.

37

NEPHRIC reported that Visipaque was less nephrotoxic and caused 11 times less CIN than the studied CM, Omnipaque.

38

Dr. Aspelin had overall responsibility for, and final authority over, the content of NEPHRIC.

39

The other NEPHRIC authors, including Dr. Berg (a renal physiology expert) contributed to and approved the contents of the article

40

While the results of the NEPHRIC study, which was a head-to-head comparison of Omnipaque and Visipaque, provide reasonable scientific support for the claim that Visipaque performs better than Omnipaque in high risk patients, it does not support the claim that Visipaque performs better than all LOCM for that patient group.

41

See infra

pp. 132-39. Other studies in the field and referred to at trial will be reviewed below.

*405

a. The RECOVER Study

RECOVER was a randomized blinded head-to-head clinical trial, published in 2006, comparing the nephrotoxicity of Visipaque and Hexabrix (ionic low osmolar CM) in patients with RI.

42

It showed that Visipaque was less nephrotoxic and caused less CIN than Hexabrix,

43

Neither party, Braceo nor GEH, was involved in the study or publication of RECOVER.

44

Braceo alleges that RECOVER is unreliable due to a discrepancy with an earlier published abstract. However, the RECOVER authors explained in a published letter to the editors that the published results in the Journal of the American College of Cardiology (herein “JACC”) were accurate, and that the results reported in the earlier abstract were based on preliminary data.

45

Accordingly, the Court finds this study to support the contention that Visipaque is less nephrotoxic than Hexabrix.

b. The Jingwei Study

Jingwei was a head-to-head clinical trial, also published in 2006, comparing the nephrotoxicity of Visipaque and Isovue in patients undergoing percutaneous cardiac intervention (“PCI”).

46

It showed that Visipaque caused smaller SCr elevations.

47

Nonetheless, there was no clinically significant difference in the occurrence of CIN. The record does not indicate any involvement by GEH or Braceo in the Jingwei study.

c.The McCullough Meta-Analysis (“MA”)

The McCullough Meta-Analysis (“MA”), published in 2006, used patient level data from head-to-head randomized intra-arterial clinical trials gathered from a GEH patient database.

48

Dr. Peter McCullough, a consultant for GEH, and co-authors had control over the MA

49

McCullough found that Visipaque was less nephrotoxic than LOCM in: (i) all risk level patients; (ii) patients with RI; and (iii) patients with RI and diabetes.

50

Bracco’s expert, Dr. Lee Jen Wei, re-analyzed the MA and confirmed that Visipaque causes less CIN than the LOCM analyzed in the study using the CIN definition chosen by McCullough.

51

However, as Wei cogently and significantly pointed out during his testimony, the McCullough MA was comprised of 16 studies, 9 of which were Omnipaque and 7 of which were non-Omnipaque LOCM. Isovue only represented 1 of the 16 studies. Dr. Wei concluded through statistical analysis, and the Court finds his testimony credible and persuasive, that when the non-Omnipaque studies were compared to Visipaque there was no statistically significant difference in CIN and that the nine Omnipaque studies skewed the results. Therefore, the Court does not find the McCullough Meta Analysis Study reliable for the claim that Visipaque (“IOCM”) causes less CIN than all LOCM.

*406

d. The VALOR trial

The VALOR study, sponsored by GEH, was an head-to-head clinical trial comparing the nephrotoxicity of Visipaque and Optiray, and allowed for the discretionary administration of Nacetylcysteine (“NAC”).

52

Following a protocol specified interim analysis, it was determined that patients receiving NAC had more CIN.

53

Thus, enrollment was suspended and then terminated.

54

A manuscript reporting on VALOR was submitted for publication in 2007.

55

The incidence of CIN was lower with Visipaque than Optiray, and Visipaque caused a lower maximum percentage change in SCr from the baseline.

56

However, the study concluded that there was no statistically significant difference in the incidence of CIN between the two CM tested; therefore no reliable conclusions can be drawn from this study as to Visipaque’s renal superiority.

e. The IMPACT article

IMPACT was a study sponsored by Braceo and completed in 2006.

57

It was not a prospective study, but combined secondary data from two previously completed Braceo studies, INVICTA and VIR-PACT, that were designed to study image quality, not CIN.

58

The post-hoc combination of data from two studies was not disclosed in the manuscript and is not an accepted practice in the scientific community.

59

Although Dr. Feldman testified that IMPACT does not contradict the conclusions of NEPHRIC because of the different patient sample groups, IMPACT does come to the conclusion that Visipaque and Isovue performed similarly and had similar renal safety profiles in patients at elevated risk for CIN.

60

f.The CARE Study

CARE was another Braceo sponsored study

61

comparing Visipaque and Isovue. CARE was published in May 2007, and, prior to that, was not available to GEH.

62

All patients received sodium bicarbonate according to a protocol from the Merten study, which showed that sodium bicarbonate reduced CIN when used with Isovue.

63

Merten concluded that sodium bicarbonate inhibited the negative effects of hyperosmolar stress caused by LOCM such as Isovue.

64

At the time the CARE protocol was finalized, there was no significant evidence that bicarbonate was beneficial when used with an iso-osmolar agent

*407

like Yisipaque.

65

Dr. Feldman testified that CARE does not speak to the relative nephrotoxicity of Yisipaque and Isovue

without

use of bicarbonate and does not contradict Chalmers, NEPHRIC, RECOVER, Jingwei, or the McCullough MA.

66

That is true, however, the Court finds this study’s findings probative because its results indicate no statistically significant difference in CIN between Isovue with sodium bicarbonate and Visipaque with sodium bicarbonate.

g. The Sharma Pooled Analysis, Solomon Systematic Review and Solomon/DuMouchel articles are biased and methodologically flawed

The Sharma Pooled Analysis (D262A) was drafted in-house by Braceo and was based upon a prior article by Dr. Alberto Spinazzi, Bracco’s senior vice-president responsible for medical and regulatory programs.

67

Braceo performed the statistical analysis

68

and paid Dr. Samin K. Sharma, a doctor at Mount Sinai School of Medicine, $50,000 for his costs associated with the article.

69

Braceo also drafted the Solomon Systematic Review (D107) and paid Dr. Richard J. Solomon, a specialist in internal medicine and nephrology and an expert proffered by Braceo, $30,000 for his involvement.

70

Together with Dr. Solomon, Braceo published an abstract of its review, but without data from Chalmers to “strengthen the argument” of equivalency between Isovue and Visipaque.

71

Braceo and Dr. Spinazzi were intimately involved in drafting the Solomon/DuMouchel article (D222).

72

Because of methodological flaws, the Court finds that no reasonable conclusions on the relative nephrotoxicity of Visipaque, Omnipaque and Isovue can be drawn from the Sharma, Solomon Systematic Review or Solomon/DuMouchel articles.

73

Bracco’s expert, Dr. Isabel Elaine Allen, attempted to validate the Solomon Systematic Review, but her analysis was plagued by errors.

74

The reported CIN rates in both Solomon and Sharma were in fact lower for Visipaque than for both Isovue

75

and Omnipaque,

76

although the difference in the rate of CIN between Visipaque and Isovue was not statistically significant. There was a statistically significant difference in the rate of CIN between Visipaque and Omnipaque, and furthermore a statistically significant difference between Isovue and Omnipaque; Visipaque and Isovue performed better than Omnipaque overall.

*408

h. The NEHPRIC Study

The NEPHRIC study, reported in the NEJM (P2467), compared Visipaque and Omnipaque head-to-head, but stated in its conclusion that “[njephropathy induced by contrast medium may be less likely to develop in high-risk patients when iodixanol [ (an iso-osmolar contrast medium) ] is used rather than a low-osmolar, nonionic contrast medium.” Braceo assails the reliability of the NEPHRIC study by contending: (1) it was not designed to test whether osmolality is responsible for CIN (e.g., 20 T 6) and therefore cannot support the conclusion that Visipaque performs better than all LOCM in connection with renal function and CIN; (2) it has never been repeated in an AWC study; (3) it does not provide any support for the conclusion that Visipaque is as good as or better than LOCM with prophylactics;

77

and (4) it does not represent the weight of scientific evidence. (P2467; 3 T 89-90).

In addition, Braceo avers, through the testimony of Dr. Solomon, that Table IV of the NEPHRIC article, which purports to present results from other studies, is inaccurate and misleading because it incorrectly reports the results of those studies. (3 T 126-31; P3148, 37, 2053, 2386, 2390). Braceo also alleges that Table IV is inaccurate and misleading because it does not report the allegedly contradictory results of GEH’s NEPHRIC II study;

78

but NEPHRIC II was not completed prior to the publication of the original NEPHRIC article and therefore could not have an impact on the reliability of the Table IV charts when published. Additionally, any such allegations as to the results of the NEPHRIC II study are speculative and it is improper for the Court to draw any inferences in the absence of its production.

According to Braceo there are several additional flaws inherent in NEPHRIC which make it unreliable:

• Primary outcome flaw. The record indicates that Nephric’s primary endpoint — mean peak change in serum creatinine — is not a reliable metric, although it is used in the article and GEH’s ads (e.g., the 11 times better assertion). (33 T 207) (Feldman). P4288:437 (“unknown clinical significance”), P200 (p3, FDA rejects Nephric’s mean peak change endpoint);

see also

P1540 (definition of clinically significant)

•

Omitting of key results.

The NEJM article does not report the 25% rise in serum-creatinine results (P44, P4144, P1887; D2039T), which GEH added to make the study more comparable to the Chalmers study and to provide a more rigorous test for CIN.

Id.;

3 T 90-99. Instead, the article falsely states that the secondary endpoints were significantly better. (P2467:913). GEH’s marketing director was aware of this unreported data (e.g., P195L131 (declining to provide the 25% results in Spain)) and he permitted the article to falsely report that all of the secondary outcomes showed a statistically significant (defined as p<0.05) difference between Visipaque and Omnipaque

79

*409

• Hydration flaws.

Inadequate hydration was described by a GEH doctor as one of the “greatest weaknesses of the study” but it was not acknowledged in the article or any ad. (P530:148, 20 T 25; 3 T 101-105).

•

Baseline and other population flaws.

The patients in the Omnipaque group had worse baseline values (P207-08, P979, P1887, P48, P49; 3 T 119-120; 20 T 35), which greatly increases the chance of getting CIN.

Id.

The patient groups also had other differences that were never analyzed together.

Id.;

3 T 105-109,112-117. Furthermore, since there was no standard hydration, and hydration changes baseline values to an unknown extent, there is no way to know the correct values and thus there was no way to accurately calculate mean peak change or CIN. P823, P4250; 20 T 39.

• Improper manipulation.

While the study was ongoing, and in violation of the protocol and proper practice, GEH took secret and forbidden peeks at the data looking for trends, and even changed the study endpoints and stopped the study early in response.

80

E.g.,

P562:821 (found “Mean of max day 2 and 3: 20% (25% for Omnipaque and 15% for Visipaque)” to compare treatment arms before study completion), 1882:966 (“The statistician thought the data [from the two treatment arms] looked equal in both CrCl groups.”); 11 T 20-26, 43-44, 71-75; D2039T (“pretend”, “plausibility will not increase”), 2339, 2440. These types of unplanned interim analyses (defined by D2340:42 and D2339:34 as any comparison of treatment arms prior to completion) and secret attempt to “fix” the study midstream makes the trial non-prospective. P830; 20 T 28-33, 11 T 14-44, 70-71; P130. When a NEJM reviewer asked whether there was an interim analysis (P1869, 46), GEH and the authors replied there was none, and then amended the article to falsely say there was none. (P68; 20 T 17-18).

•

Hidden duration of diabetes flaw.

Duration of diabetes may be a predictor of CIN (P 4377:29K; 34 T 57-62). GEH found that the statistically significant higher duration of diabetes in the Omnipaque patients may explain the results, independent of the CM, making the conclusion of the article unreliable. GEH did not reveal these results to the public. (P49, P967, P4364, P4364T, P4365, P4365T; 20 T 33-34).

•

Misrepresentative conclusion and manuscript.

GEH’s marketing director provided input to the NEJM article to try to make it misleading, and then celebrated the final version’s obscuring of the limitation of the results of the study to Omnipaque and its overly broad and unsupportable conclusion. P1519, P1534, P1535, P4210 (admitted to only show input), P1532, P4208, P1672, P1873 (conclusion same as TCT abstract), P1876, P4208; 6 T 87-89, 13 T 62-71; see also P480.

(PL’s FOF ¶ 13). Taking into consideration that the study compares one LOCM (Omnipaque) with Visipaque, nonetheless, the Court does not find that the study’s results are vitiated by the flaws identified by Braceo. In addition, the NEPHRIC

*410

study uses conservative language in its conclusion (e.g.-use of Visipaque “may” cause less CIN than “a” LOCM), which does not render the study unreliable merely because it only compared Visipaque and Omnipaque. As it pertains to GEH’s advertising, however, the non-definitive language used in the NEPHRIC conclusion permits GEH to use it for the contention that Visipaque may be renally better than a LOCM (which in the context of the article, means better than Omnipaque), but only if GEH plainly identifies, in same size print (and not in footnoted material), that Omnipaque was the only LOCM compared and that the NEPHRIC findings are limited to the studied CM.

81

The NEPHRIC article cannot be used to claim that Visipaque has a superior renal safety profile to all or any other LOCM. Further, in regard to the claim that “Visipaque is as good as or better than LOCM with prophylactics,” the Court finds that the results of the NEPHRIC study cannot reliably support such a conclusion because using a LOCM with prophylactics was not part of the results of the study and was only concluded through a MA.

Moreover, Braceo contends that reliance on NEPHRIC is unreasonable because all other reliable clinical trials, reviews and MAs demonstrate no basis for a superiority claim of Visipaque over Isovue. Indeed, Braceo contends that all reported AWC clinical evidence and properly conducted MAs

(e.g.,

Dr. Wei’s unrebutted MA of GEH data) show no statistically significant difference between Visipaque over either Isovue or Optiray, whether given i.a. or i.v.

82

(1 T-4 T, 11-12). Braceo also contends that for seven years prior to the NEPHRIC campaign, no doctors had ever observed that Visipaque caused less CIN,

Id.,

and that GEH’s internal hidden data, never mentioned in its ads, also show no renal superiority for Visipaque.

83

GEH reported to its representatives that the studies provide valid and reliable information and that anecdotal experiences are not reliable in making CIN comparisons. (P260:413; 13 T 72-74).

In further support of its claim for false advertising, Braceo also relies on FDA findings which declined to approve a renal superiority claim for Visipaque. The FDA has repeatedly found (e.g., in the years 1996, 2001, 2005) that there is inadequate support to make renal superiority claims for Visipaque. (E.g., P596, P457, P585,

*411

P200, P816, P1894; 7 T 54-56; 14 T 41-57; 15 T 25-37, 38-39, 43-48). Furthermore, in 2001, GEH submitted the proposed NE-PHRIC study to the FDA with proposed superiority claims. (P200, P199, P4205, P816, P556, P818, P1542, P264B, P271, P1670, P1543, P810, P972; 20 T 48-57; 14 T 57-62). The FDA again rejected GEH’s proposed claims, requiring AWC clinical trials and rejecting NEPHRIC as an AWC clinical trial (e.g., “the current [NE-PHRIC] protocol contained a number of sources of variability, which may confound the ability to clearly determine the effects of the drug on renal function”). (P200, 1542; 20 T 48-51).

As part of GEH’s rebuttal to the assertion that its representations constituted false advertising, GEH relied on four studies; Chalmers, NEPHRIC, RECOVER and the McCullough MA. Braceo contends that flaws in these studies vitiate their results as follows: (a) Chalmers was not AWC (small and unblinded), showed no significant difference (there was total agreement that the 10% test is irrelevant), and even the authors concluded it was weak (3 T); (b) NEPHRIC is unreliable; (c) RECOVER only involves Hexabrix (an ionic agent), it showed no differences in certain CIN measures and it is unreliable (3 T; Solomon Dec.; D1990; P3823); and (d) the McCullough MA is of limited value as demonstrated by Dr. Wei’s unrebutted testimony (11 T-12 T) that the McCullough MA results were mostly due to Omnipaque (and not Isovue).

84

The Court finds that these studies’ conclusions do not establish the proposition that Visipaque has renal superiority to all LOCM.

Turning specifically to the NEPHRIC study, despite certain flaws, there were significant reliable aspects. The Visipaque and Omnipaque groups in NEPHRIC were demographically comparable.

85

The requisite number of patients pursuant to the protocol were included.

86

All patients had RI and met the inclusion criteria.

87

Also, the Court is not convinced that the use of NAC in 11 patients affected the viability of the NEPHRIC results.

88

Furthermore, contrary to Bracco’s assertion, no interim analysis, as that term is understood and defined by the scientific community, was performed during NE-PHRIC.

89

ICH and FDA Guidelines for clinical trials, adopted by Bracco’s expert Dr. Sanford Bolton (an expert in pharmaceutics, physical pharmacy and bio-statistics, as authoritative),

90

define an interim analysis as the unblinded comparison of

*412

treatment results.

91

During NEPHRIC, the results were not unblinded and treatment results were not compared.

92

ICH and FDA Guidelines acknowledge that a sponsor may, without impacting a study’s validity, monitor the success of planned accrual targets and the appropriateness of design assumptions.

93

Indeed, it is the sponsor’s responsibility to do so.

94

Thus, GEH’s monitoring of patient enrollment, sample size assumptions and overall (not separated into two treatment groups) SCr changes (e.g., Ps 562, 1882, 1883, 1884, 1885 1890, 1891), do not constitute interim analyses.

95

As to Bracco’s claim that GEH influenced the wording of the NEPHRIC study conclusion, the Court finds that GEH did have input. Nonetheless, Dr. Aspelin’s first draft dated March 6, 2002, which was authored before GEH offered comments and before presentation of an abstract at the TCT conference, also included a conclusion applying NEPHRIC results to the class of LOCM.

96

97

Further, Dr. Aspelin testified that he, his co-authors, and the New England Journal of Medicine editors believed in the scientific reasonableness of the conclusion.

98

All of this lends support to the reliability of the article, but combined with the chronic rejection by the FDA of its use for superiority advertising and the fact that the NEPHRIC article only compares one LOCM to Visipaque, it cannot be concluded from the study and the article that Visipaque is renally better than all LOCM. Indeed, this latter finding is also supported by the non-definitive language used in NEPHRIC’s own conclusion that Visipaque

MAY

cause less CIN than

A

LOCM. Thus, the Court concludes that the NEPHRIC results do not support a claim of Visipaque renal superiority over all LOCM or any LOCM other than the one tested in that study (Omnipaque) because only one LOCM was compared, and because the NEPHRIC conclusion does not make an absolute claim of Visipaque renal superiority, hedging its findings with less than definitive language; NEPHRIC also does not support a conclusion that Visipaque has renal superiority over LOCM with prophylactics because the study did not compare any LOCM with prophylactics against Visipaque.

i. None of the Proffered Studies Demonstrate that all LOCM (including Isovue) without Prophylactics Cause the Same Rate of CIN

Braceo contends that P1937, an internal GEH document with MA results, shows

*413

differences in rates of CIN between LOCM and that as such, a head-to-head study with one LOCM cannot be extrapolated to other LOCM. GEH contends that this was not an analysis of relative CIN rates

99

and that published guidelines treat all LOCM, including Omnipaque and Isovue, as functionally interchangeable.

100

However, the Court finds that even though multiple CM are categorized together as LOCM, it does not mean that they have the same effect, or produce the same rate of CIN. The Court is not persuaded that all LOCM perform identically — multiple studies introduced in evidence show that not all LOCM perform similarly nor do they produce the same rate of CIN.

(See

RECOVER, Jingwei, McCullough MA, VALOR, IMPACT and CARE).

3. GEH’s Establishment Claims Of Non-Renal Superiority

GEH also disseminated establishment claims of cardiovascular system, pain, warmth, discomfort and patient movement superiority, and establishment claims that Visipaque, and iso-osmolar agents generally, are a superior class of drugs that lead to lower hospital, legal and patient care costs. The Court finds that these claims explicitly or implicitly assert that data from clinical studies show that Visipaque is superior to a LOCM or all LOCM and thus they are establishment claims. As with the renal establishmenf/superiority claims, these claims were: (a) designed to be disseminated (Pl.’s FOF ¶ 4); (b) shown to be effective by GEH’s collective experience and marketing research (PL’s FOF ¶ 4); (c) disseminated by the GEH representatives (PL’s FOF ¶ 5); and (d) disseminated in various channels of communication.

101

a. GEH’s Non-Renal Cardiovascular Superiority Claims Are Not False And Misleading

Examples of the cardiovascular system establishment/superiority claims extracted from GEH’s print media, sales calls records and CME-type presentations are:

102

•

Press releases on website even during trial:

“Abstract Shows Significantly Lower Incidence of [Major Adverse Cardiac Events or Major Adverse Clinical (“MACE”) ] Following [PCI] Using Visipaque Compared to Isovue.... ” P2669:480, P3114H:857-58, P1893:94041, P4151:p2; 7 T 69.

•

CT brochures:

“Nonionic Dimer Provides Reduced MACE ...” P410:965, P3649:408, P3649A408, D2324:117.

• Sales call records:

“Visipaque doesn’t increase heart rate or B/P like LOCM”. P3682: Omni/38573, 4049:Omni/38573.

*414

i. MACE

Braceo contends that GEH’s cardiovascular claims are false because: (a) the studies do not support the claims

(e.g.,

no superiority over all LOCM, i.a. results do not predict i.v. results, and any difference purportedly shown in studies was fleeting because the results for different contrast agents converge after 30 days); (b) there were allegedly omitted results and flaws that contradict the claims made in GEH’s advertising; and (c) the studies GEH relies on (COURT and VICC) are unreliable. The following is a detailed analysis of Bracco’s allegations beginning with the various promotional materials disseminated and moving on to the integrity of the COURT and VICC trials. Bracco’s assertions, include: (1) the weight of the clinical evidence shows that Visipaque is not superior to all LOCM and definitely not superi- or to Isovue (Braceo concedes that ionic Hexabrix may be inferior); and (2) there has never been one AWC clinical study (let alone two, done the same way with the same drug) showing that Visipaque is superior to a LOCM with regard to MACE.

1. FDA findings

Referencing a series of letters dating back to 1996, Braceo argues that the FDA found no support for GEH to make cardiovascular superiority claims.

(E.g.,

P596, P457, P588, P585, P82; 15 T 25-39, 43-44). Nonetheless, some of these letters predate the COURT trial (circa 2000) and all pre-date the VICC trial (circa 2005) and since that time, new evidence has come to light. Thus, the Court finds these FDA letters are neither dispositive, nor highly probative as to whether GEH’s advertising was literally false regarding its claims of the incidence of MACE.

See infra

pp. 467-69.

2. COURT Study as Reported by GEH

Braceo asserts that GEH reported false information from the COURT study. (P2561). According to Braceo the study is limited to: (a) a comparison between Visipaque and ionic Hexabrix; (b) the patients studied (“extrapolation of these results to [a stable] population is not possible” (P2561), and the reported results were not consistent with the results from the less sick patients in the VIP study,

see

discussion

infra

at pp. 417-18, (P71)); and (c) a fleeting difference in adverse events between the two drugs cumulatively at the 30 day point (something not mentioned in GEH’s ads). (5 T 37-44). Braceo also asserts that the actual data, including data not disclosed by GEH, show that there were no differences between the drugs and the results were not reliable.

103

GEH responds by contending that COURT was a randomized head-to-head clinical trial comparing Visipaque and a LOCM, Hexabrix, in 856 high risk patients undergoing Percutaneous Transluminal

*415

Coronary Angioplasty (“PTCA”).

104

Dr. Davidson was the principal investigator (“PI”) and helped design and run it.

105

Dr. Kevin Harrison, the PI of the Braceo sponsored VICC trial, was also an investigator for COURT.

106

The primary endpoint of COURT was in-hospital MACE.

107

The in-hospital period is most relevant because MACE events caused from CM, as opposed to those caused by other factors, tend to cluster in the first few days.

108

The Visipaque group had less in-hospital MACE than Hexabrix (5.4% vs. 9.5%) and fewer myocardial infractions (“Mis”) (2.0% vs. 4.4%).

109

The incidence of MACE at 30 days favored Visipaque (9.1% vs. 13.4%).

110

Dr. Kern, a Braceo expert, agreed that COURT showed that “the incidence of [MACE] and major angiographic complications are reduced in high risk patients undergoing coronary interventions with Visipaque compared "with Hexabrix.”

111

MACE events in COURT were adjudicated in a blinded manner by the authors.

112

I need not find whether the COURT results could support a conclusion that MACE is related to osmolality,

113

because the conclusion in COURT only stated that Visipaque causes less MACE than Hexabrix in high risk patients undergoing coronary intervention.

114

The Court finds that, despite the qualms referenced by Braceo, the COURT study is sufficiently reliable to permit one to conclude with reasonable certainty that it established a cardiovascular superiority claim for Visipaque over Hexabrix for use in high risk patients undergoing coronary intervention. COURT does not, however, support such a conclusion as to any LOCM other than Hexabrix.

3. VICC study

The Bracco-sponsored VICC trial compared Isovue to Visipaque. (P2326, P3909). However, this study has never been published in a peer-reviewed journal

115

and Braceo contends that it was poorly designed and unreliable based on several flaws, including: (a) its crossover effect and lack of a washout period, (23 T 122-124); (b) its failure to uniformly measure CK-MB (23 T 126-127); (c) its side effect; and (d) the adjudicators’ failure to follow the rules on calculating CK-MB change (P3912:654). D1441; 5 T 44-67; 25 T 121-44; 33 T (Spinazzi). The Court finds that these concerns, whether in isolation, or in conjunction, do not make the study so unreliable as to render it unsup

*416

portable for the conclusions stated therein. The results of the trial show that Visipaque had statistically significant less incidence of in-hospital MACE than Isovue.

GEH correctly avers that VICC was a Braceo sponsored head-to-head randomized trial comparing Visipaque and Isovue in 1276 patients at mixed risk levels for MACE.

116

Dr. Harrison was the PI.

117

Drs. Charles Davidson and Morten Kern were co-investigators.

118

The idea for the VICC trial came from Duke University, which approached Braceo for support.

119

The evidence reveals that Braceo agreed to sponsor it and then tried to minimize publication of any negative results.

120

The primary endpoint of VICC was the incidence of MACE in the earlier of the first two days following contrast administration, or until hospital discharge.

121

The VICC protocol specified CK-MB for the primary diagnosis of non-Q-wave Mis.

122

CK-MB are commonly used in clinical practice for such diagnosis.

123

Visipaque caused less in-hospital MACE than Isovue (4.8% vs. 9.0%), including less in-hospital non-Q-wave Mis (3.4% vs. 7.5%), which the study concluded was significant for treatment.

124

At 30 days there were significantly fewer non-Q-wave Mis with Visipaque.

125

The periods of 0-7, 2-7, and 2-30 day MACE were included as secondary endpoints in VICC, but are not as clinically relevant as in-hospital MACE.

126

There was also no significant difference in repeat PCIs of the target vessel, i.e., the vessel treated at the time of procedure.

127

Repeat PCIs of non-target vessels are unlikely to be related to the effects of CM.

128

The Court finds that it is scientifically reasonable to conclude from VICC that (1) Visipaque is associated with significantly less in-hospital MACE than Isovue;

129

and (2) Visipaque is associated with fewer non-Q-wave Mis than Isovue.

130

The primary results of VICC and COURT are essentially the same.

131

VICC confirmed the findings of COURT, extended it to a different comparative agent, and was a

*417

more contemporary study based on the practice having changed, i.e., use of more stents and the use of more IIB/IIIA inhibitors.

132

Dr. Kern testified that the lack of a washout period in VICC makes the data difficult to interpret, but Dr. Harrison disagreed; he testified that it does not affect interpretability of the data.

133

In addition, Dr. Davidson testified that he did make sure that the patients in his portion of the VICC trial who underwent a diagnostic procedure got the same drug as in the interventional procedure, thus eliminating a crossover or a washout effect. (23 T 122:24-123:14). Furthermore, he found that Visipaque performed better than Isovue whether it was the same contrast agent being used in the procedures or whether there was contamination from another contrast agent. (23 T 123:18-124). Further, Dr. Kern signed the published abstract that did not mention the washout issue

134

and approved the protocol in conjunction with his colleagues.

135

The testimony reveals that Braceo believed VICC favored Visipaque, and thus would damage Isovue in the market. As a result, Braceo sought to contain damage by re-analyzing the data, seeking to undermine the validity of unfavorable results, and pressuring Dr. Harrison regarding the contents of the abstract and manuscript.

136

The Court finds that the VICC study is sufficiently reliable to permit one to conclude with reasonable certainty that Visipaque causes less in-hospital MACE than Isovue for patients undergoing PCI within the initial 48 hours after the procedure.

4. The VIP Trial

The Court finds that VIP, a study published in 2000, that compared Visipaque and Hexabrix in low risk patients,

137

does not undermine the conclusions of COURT or negate its findings regarding high risk patients. However, VIP’s conclusion that there is no statistically significant difference between Visipaque and Hexabrix in low risk patients with regard to MACE,

138

militates against any finding that Visipaque performs better than this low-osmolar contrast agent with regard to MACE in that patient group. Furthermore, since no other studies have focused on Visipaque and any other LOCM to confirm the incidence of MACE in low risk patients, there is no basis to assert any Visipaque superiority claims for MACE in low risk patients.

ii. Hemodynamic Effects

Braceo contends that GEH has not rebutted Bracco’s evidence that iso-osmolality and Visipaque are not superior over Isovue or other non-ionic LOCM for heart rate, blood pressure, ECG, LVEDP and other cardiovascular effects as shown by Dr. Kern and VIP (P71), IMPACT (P2799), Sutton I (P3770), Sutton II (P3855), Verow (P2356), Manninen (P3846), Palmers (P3847), and Klow (3844), or that iso-osmolality does not cause less red blood cell deformity than LOCM. 5 T (Kern); P27, P34, P41; 2 T (Katzberg). Moreover, GEH’s internal data also shows

*418

no superiority: DXVPRC01 (P1705); DXVD09 (P220:931). (5 T 76; 2 T 58-60).

Braceo contends that GEH’s rebuttal ignored Bracco’s proofs and relied on excerpts from three articles that are not cited in the ads in issue and that cannot support the scope of its claims: the Bergstra Article does not attribute the LVEDP difference seen between Omnipaque and Visipaque to osmolality differences (D814:222) and the Soiva and Murdock articles did not involve Visipaque (D2249; D2377). In fact, Soiva, finding significant differences between LOOM, showed that LOOM cannot be considered as a uniform group. Here, GEH incorrectly contends that there is a good basis to conclude, from clinical trials, that Visipaque causes fewer and milder hemodynamic effects

{e.g.,

heart rate changes) than LOOM

139

and that LOOM are all similar in this regard.

140

The Court finds that these conclusions are neither adequately supported nor reliably based upon the studies GEH cites.

b. GEH’s non-renal discomfort-type claims

Examples of the discomfort-type (i.e., claiming less pain, warmth, discomfort or patient movement or designed for such) establishment/superiority claims extracted from GEH’s print media, sales calls records and CME-type presentations are:

141

•

Website, brochures and CMEs:

“[Visipaque] offers significantly better comfort to the patient ...” P2508:767A, P2511C:781A, P4163:767A, P4166C:781A.

•

CT brochures:

“Less chance of extravasation-related complications — including pain, discomfort ... when used:” “Less chance of patient discomfort ... when used in:” “High concentration”, “High-rate injections”, “Multiple procedures”, “High-speed procedures.” P410:966.

•

Sales call records:

“She asked why use Vis Shared theory iso-osmolar, less fluid shifts and thus less pt discomfort, movement and need to rescan.... ” P2312:A650688, P4049:A650688.

GEH makes claims that Visipaque is superior to LOOM because it provides less pain, heat, and discomfort and that these benefits are due to its iso-osmolality. Braceo contends that these claims are false and misleading because: (a) the studies do not support the claims

{e.g.,

no superiority over all LOOM, i.a. results do not predict i.v. results, no difference in movement ever shown); (b) omitted results and flaws contradict the statements; and (c) the weight of the clinical evidence is that Visipaque is not superior to all LOOM and definitely not superior to Isovue. There may be a benefit in heat sensation that is sometimes

*419

described as pain in peripheral angiography, but that has never been proven and peripheral angiography is a de minimus use of CM. (1% today, 2 T 91; 29 T 158-159). GEH’s own Dr. Anthony Nicholson, an interventional radiologist, testified that GEH’s claims were too broad because any benefit of Visipaque is limited to direct local injections in small vessels, a limitation found in none of GEH’s advertising claims.

(Id.)

In addition, there has never been one AWC clinical study that was repeated and supports the claim that Visipaque is superior to a LOCM (or all LOCM) in a manner claimed by GEH. Furthermore, Braceo contends that the FDA found there was no support to make discomfort-type superiority claims for Visipaque.

(E.g.,

P596, 457, 588, 585, 82; 15 T 25-39, 43-44). At most, the FDA permits GEH to make a very limited and inconclusive statement about a trend that is not a superiority claim. (14 T 66).

There have been eleven studies showing no difference in patient movement and no reliable study showing a difference in patient movement. GEH’s attempt to show a difference (DXV071) was a failure so GEH did not make great effort to release the results. (P557).

142

Furthermore, data from unpublished studies showed no consistent differences in pain, discomfort or movement: GEH MA (P549); DXV071 (P557); DXVA001 (P220:930); DXASG001 (P220:930); DXVD11 (P220:932); 2 T. Braceo asserts that Dr. Michael Rappeport’s survey demonstrated that the claim, Visipaque is superior regarding pain “compared to LOCM”, is understood by an overwhelming proportion of customers to claim superiority to all LOCM. (PL’s FOF ¶ 18). However the Court is excluding Dr. Rappeport’s survey for its inherent unreliability.

See infra

p. 90. In response to the Rappeport survey, GEH proffered Dr. Nicholson who presented several studies asserting differences in pain or discomfort (nothing on patient movement) but none compared Visipaque to all LOCM or even one LOCM in an AWC study that was ever repeated.

(See

29 T).

Conversely, GEH avers that CM can cause pain, discomfort or heat upon injection, and that this aspect of patient comfort is clinically relevant.

143

GEH also contends that Visipaque causes less pain, discomfort and warmth than LOCM, including Isovue, in certain procedures,

144

and that this difference is clinically relevant.

145

No study has shown Isovue to cause less pain than Visipaque.

146

Braceo acknowledged that there is less pain with Visipaque than Isovue in peripheral angiography procedures.

147

Bracco’s expert, Dr. Katzberg, acknowledged the same.

148

*420

Furthermore, GEH’s expert, Dr. Nicholson, could not substantiate by a reasonable degree of scientific certainty, based on the studies, that any claim of Visipaque superi- or regarding pain extended beyond peripheral angiography procedures.

149

Accordingly, the Court finds that GEH’s claims of comfort superiority are only supported in regard to peripheral angiography procedures. Thus, GEH’s broad assertions of superior patient comfort are not supported by the conclusions of the various studies it uses to bolster them and any such advertising must be limited to the procedures that were used in the studies.

c. GEH’s Osmolality Class/Cost Claims

Examples of the osmolality class and cost establishment/superiority claims extracted from GEH’s print media, sales calls records and CME-type presentations are:

150

•

Website:

“Isosmolar Visipaque. It’s innovative in a class of its own.” P2505:757A, 2511A:774A, 4155A:737, 4160:757A, 4166A:774A, 3448A:p2

•

Diagrams/claims repeated in websites, brochures and CMEs:

Showing “hyperosmolality” (i.e., osmolality higher than blood, like Isovue) leading to “altered morphology” of “erythrocytes” and “endothelial cells”, ultimately leading to “discomfort”, “warmth”, “coldness” and “pain.” P2508:766A, P2511C:781A, P4163:766A, P4166C:781A;

see also

P3114K:823, P2510:771A, P2508:763A, P2511C:779A, P4163:763A, P4165:771A, P4166C:779A, P2183:982, P2184:000, P2311:p4, P2298:p25, P4252:p3, P3828:929, P3261:011, P3829:036, P2156:036, P2157:212. Additional claims of less red blood cell effect of IOCM vs. LOOM can be found at: P2311:p5, P3710:p2, P2280:p5, P395:357, P409:945, P333:738, P410:960, P3649:403, P3649A:403, P436A:421, 27-28, P2298:p7, 13-14, P782:893, P216L387, P2183:991, P2184:009, P4252:pl2, P4174:pl, P3114J:821, P3210:934, 410:962, P3649:405, P3649A:405, P2510:772A, P2508:764A65A, P2511C:780A, P4163:764A-65A, P4165:772A, P4166C:780A; D2324:114, D2334:p2, D2324:112

•

Health Value brochure:

“Isosmolar VISIPAQUE may reduce financial burden

*421

due to serious adverse events”. P446:641, P649;665

•

Sales call records:

“Used the ‘cost’ story for Visi vs. LOCM” P3682:Visi/154349, P4049:Visi/154349

These claims are based upon alleged renal, cardiovascular or discomfort-type superiority tied to osmolality (e.g., 6 T 94-99) or costs. Braceo asserts that they are false and misleading because (a) the studies (shown above) do not support the claims (e.g., no superiority over all LOCM, i.a. results do not predict i.v. results), and (b) omitted results and flaws contradict the claims. The Court finds that the weight of the clinical evidence does not show that Visipaque is superior to all LOCM nor does it show that it is superior over Isovue, except perhaps under limited circumstances for pain and in-hospital MACE for patients undergoing PCI. The FDA found that there was no support for making class/cost superiority claims for Visipaque.

(E.g.,

P588, P585, P82; 15 T 33-39, 43-44). Furthermore, GEH’s medical officer testified that while iso-osmolality is a chemical property of the final Visipaque formulation, it does not put the drug in a proper, formal class of drugs separate from LOCM by FDA standards. (16 T 186-187) (“IOCM and LOCM are not separate classes, Correct?” “That is true.”). This is because the FDA classifies all iodinated contrast media the same.

(Id.)

In addition, Braceo contends that GEH improperly advertised the role of osmolality in causing adverse events. GEH’s documents give some indication that Visipaque has a much higher rate (5-7 times) of delayed adverse events than Isovue and other LOCM

(e.g.,

P1948:947(1.4% v. 0.2%), P2133, P1169, P544, P557, P3860:167; 13 T 82-85) and thus it belies GEH’s superiority claims in regard to Visipaque (and iso-osmolar Isovist, withdrawn for this reason).

In light of this data (P1169:703, P4240:670, P544), GEH countered with claims that there were an equal or lower number of adverse reactions.

(E.g.,

P229L054, 2305(Conclusion), 2309, 976, 2026, 2027, 2286; 15 T 151-152). GEH also argues that Bracco’s foreign affiliate and experts agree that osmolality is relevant to renal safety, cardiac safety, and pain/discomfort.

151

However, the Court does not attribute significant weight to these general assertions. Finally, Braceo asserts, and the Court agrees, that there is little evidence to support a claim of decreased costs using Visipaque. There is no support for GEH’s claims that studies show that there is less patient care, hospital care or legal liability costs for Visipaque versus all the LOCM or even one LOCM.

152

The only way to make such a cost inference is by associating the cost of treating additional instances of MACE and CIN to higher overall cost, but since the Court has not made such a finding with regard to CIN, the only viable means of advertising lower cost is through less incidence of MACE for patients undergoing PCI within the 48 hours after the procedure.

*422

4. Additional Evidence Regarding Dissemination

In addition to the proofs cited above, dissemination of allegedly false claims was confirmed by the testimony of Mr. Scott Kerachsky, Director of Marketing for GEH Healthcare, North America, (15 T 100-142), Dr. Peter McCullough (34 T 160-165), and stipulations by GEH. GEH representatives are instructed to present printed materials a section at a time, by pointing to specific parts, and not as a whole.

(E.g.,

15 T 116, 172-175; P2100:530, 2098).

But, in his testimony, Mr. Kerachsky also elaborated on the impact of GEH’s various levels of approval mechanisms over promotional materials and their dissemination. Specifically, Mr. Kerachsky identified four levels of approval, medical, regulatory, marketing, and legal, whose responsibility it is to ensure that the clinical data provides support for proposed promotional materials. (15 T 86, 90). Mr. Kerachsky also testified that every piece of promotional material used by GEH’s sales force was approved by medical, regulatory, marketing, and legal. (15 T 83, 86, 90). In fact, Mr. Kerachsky himself reviewed prospective promotional materials from a marketing prospective, mindful of FDA regulatory issues and possible conflicts with the underlying clinical data. (15 T 93, 95, 125). For example, with respect to NEPHRIC, Mr. Kerachsky testified that marketing “clarified, just to be extra careful, that it was iohexol” which was studied. (15 T 125).

For the time period covered by GEH’s sales call record production (i.e., Sept. 2003-2005), Braceo asserts that at least 87% of GEH’s representatives delivered GEH’s clinical superiority claims. (17 T 102,107; 18 T 25-34, 40, 42-43; P3493M, 3922, 4049; D2004). While Braceo asserts that at least 82.5% of GEH’s sales call records with substantive communications show the delivery of GEH’s clinical superiority claims to customers, the Court finds this number to be grossly inflated based upon its own evaluation of the records and expert testimony; nonetheless, some instances of false messages are supported by the record.

(See also

17 T 102, 107; 18 T 25-34, 40, 42-43; P3922, 4049; D2004).

GEH argues that Braceo has grossly mischaracterized the number of actionable sales call notes and promotional materials, specifically because of flaws in Mr. Russell’s testimony. For example, Mr. Russell could not identify the basis for his testimony that certain GEH promotional materials contain pain/discomfort superiority claims.

153

Mr. Russell improperly categorized: (1) accurate discussions of the NEPHRIC study,

154

and (2) a Visipaque logo as renal superiority claims.

155

Mr. Russell could not identify the basis for his categorization of GEH promotional materials, including a specific piece containing the statement “Is your contrast media this close to plasma?” as cardiac superiority claims.

156

Mr. Russell improperly categorized statements, including “Currently, there is no health care common procedural code to delineate iso-osmolar contrast agents such as Visipaque from low-osmolar contrast media LOCM,” as class claims.

157

Mr. Russell improperly categorized statements in GEH promotional material, including a piece that expressly states that medical personnel should consider taking

*423

prophylactic measures to reduce the risk of CIN, as promotion of “the lack of pretreatments and emergency use without renal function testing.”

158

Nonetheless, a number of the sales call notes reviewed by this Court do indicate that certain members of the GEH sales force were using the NEPHRIC study’s conclusion to make superiority claims.

In addition, GEH argues that Mr. Russell’s analysis of sales call notes is unreliable because of the allegation that Mr. Russell’s compilation of allegedly improper sales call entries was compiled by Bracco’s counsel

159

and was widely over-inclusive. The compilation was created from 314,468 GEH sales call notes produced in this case.

160

For example, Mr. Russell improperly categorized entries that reference only the word, “NEPHRIC,” as being “on-message.”

161

Also many included notes were duplicative.

162

In addition, GEH states that Mr. Russell’s compilation improperly categorized sales call notes as (1) renal superiority messages; (2) cardiac superiority messages; and (3) evidence of the application of Visipaque “leverage.” Indeed, Mr. Russell admitted that there was no reason that innocuous sales call entries such as “Discussed use of Visi for high risk patients”; “Told him about Visi for the coronary”; and “Thanked Dr. Vogel on the lead to move forward to bundle a LOCM and MRI contrast deal,” were included in the above categories, respectively.

163

GEH argues that due to the lack of standards employed, Mr. Russell’s compilations are inflated and unreliable.

164

The Court agrees that Mr. Russell’s opinions as to the percentage of “onmessage” sales call notes and representatives who made them are greatly inflated.

165

Nonetheless, the Court has had the opportunity to review the sales call notes and disagrees with GEH that the Court should only review sales call notes that mention Isovue as follows: (1) 284 notes that mentioned Isovue; (2) only 38 where Isovue was mentioned and a superiority claim that could arguably be construed from the note; and (3) 1,251 notes from a single GEH sales representative (Chad Chaney) who entered substantially the same comment for numerous notes.

166

I find that focusing on the subset of sales call notes that explicitly mention Isovue would understate of the number of sales calls that improperly made Visipaque superiority claims over all LOCM. GEH’s claim that Visipaque is better than

all

LOCM or a LOCM, without identifying the one LOCM compared, is what makes its advertising campaign problematic; a sales call need not mention Isovue specifically. In sum, Bracco’s position that any advertisement which references NEPHRIC is false is incorrect and thus results in an over-inclusive determination; conversely, GEH’s position that only those advertisements which compare or mention Isovue may be improper is under-inclusive.

5. Evidence Concerning Materiality

The evidence of materiality includes:

*424

• The repetition of certain unsupported claims by GEH’s sales and marketing teams.

• The substance of the claims

(e.g.,

CIN and other clinical data), which cannot be anecdotally observed with reliability

(e.g.,

P260:413; 5 T 28-29).

•The type of claims — i.e., drug safety, which GEH’s own observations (7 T 178) and market research showed were the most effective in converting sales

(E.g.,

P100-102, 104-106, 196:573-580, 1400,1436,1716:739, 2038, 2112).

• The limited evidence that it will take several years for Braceo to recover from GEH’s false claims once they are stopped (17T 117-118; 21 T 110-122).

These few examples, when considered in conjunction, demonstrate that GEH’s false advertising claims appear material to a consumer’s purchasing decision. Moreover, because I find that some of GEH’s claims are literally false, as stated

infra

p. 143-45, there is a presumption of materiality and deception.

6. Harm, Damages And Other Remedies

a. Causation For Bracco’s Losses

i. GEH’s Testimony and Business Records

Numerous GEH witnesses conceded that Visipaque renal safety claims drove substantial sales increases which came, in significant part, at Bracco’s expense. GEH’s President, Dan Peters, testified that GEH enjoyed a dramatic sales increase after the publication of NEPHRIC, primarily due to GEH’s renal safety message. (6 T 103;

see also

7 T 94-95; P2461, 1892:925-6). He acknowledged that GEH’s renal message had a “large impact” on the “whole market” while GEH tried to “minimize [Nephric’s] negative impact on Omnipaque.” (6 T 59-60, 100). GEH’s Vice President of Sales, Don Quinn, confirmed that the “NEPHRIC data coupled with a very consistent targeted marketing campaign has propelled demand for Visipaque to new heights.” (8 T 124-125; P849:934). He further admitted that GEH used NEPHRIC to convert competitive business, including Isovue accounts.

167

Mr. Quinn agreed that GEH set out to increase Visipaque’s market share through an “aggressive sales and marketing effort” and that there “[absolutely” was a connection between that effort and these increases.

168

In addition, GEH’s global brand manager, Mr. Paul Gehris, admitted that GEH saw “very good share growth since the NEPHRIC” that was “driven by awareness of the data and the perceived differentiation.” (13 T 77-80, 14-19; P1694:022). However, it remains that out of the entire GEH ad campaign relating to Visipaque, only a small fraction of the disseminated messages were indeed false. Most were proper and were backed up by the underlying scientific studies that they reference. Therefore, a causal connection cannot be made by a sales trend alone; the accurate touting of favorable results of reliable scientific studies plays too much of a significant part in this case to determine that the limited number of false ads disseminated are the cause of Bracco’s lost profits.

GEH sales representatives also gave testimony relating to GEH’s renal superiority claims. GEH’s representative sales

*425

person, Mr. Murray, testified during his deposition that in general, when talking with customers about high risk patients, he discusses that the NEPHRIC study shows that Visipaque has a better renal profile than traditional LOCM.

(See

16 T 84:4-11). However, when a question relating to that statement was posed to Mr. Murray at trial, Mr. Murray clarified his statement to mean that “when we were talking about NEPHRIC and the traditional LOCM, we were talking about [] Omnipaque.”

Id.

14-17. In fact, Mr. Murray testified that as a sales representatives “he tr[ied] to talk about Omnipaque and Visipaque.”

169

While it is difficult for the Court determine what was actually communicated to the customers, based on Mr. Murray’s testimony, some of this sales calls’ messages may be construed as misleading, especially when Mr. Murray did not qualify or specifically identity Omnipaque as being the traditional LOCM. Nonetheless, the Court finds in its review of the sales call notes that the instances of sales reps making such misleading statements were limited. Importantly, the majority of GEH’s messages were in fact true and properly relied on reliable scientific studies to support them.

GEH admitted that Visipaque’s premium price resulted from its “clinical differentiation” messages. Mr. Quinn testified that customers “absolutely” had to believe Visipaque provided patient benefits to pay the price premium.

170

The 2004 Marketing Plan states that “based upon its clinical differentiation ... a significant price premium has been placed on Visipaque when compared to low osmolar products.”

171

Mr. Gehris admitted the clinical differentiation strategy drove Visipaque’s premium price. (13 T 14-19; P1436:616,622,635). However, this was in large part a result of the underlying studies and GEH’s promotion of their results.

Quotes from GEH business records relating to GEH’s claims of renal differentiation include, for example:

• “The objective ... to increase market share ... will be accomplished strategically by clinically differentiating Isosmolar Visipaque from all other LOCM products....” (P849:932; 8 T 123-124).

• “The Nephric success stories continue to come in with the majority of new dollars coming from competitive LOCM products.” (P1311)

• “Sales performance reflects strong continued efforts in all markets to communicate NEPHRIC results and Visipaque clinical differentiation message .... Sales reports continue to highlight customer acceptance of these messages and adoption of Visipaque use in patients at risk of CIN.” (P1157:744)

• “2005 is projected to be the 3rd consecutive year of very aggressive growth____The NEPHRIC data, coupled with a very consistent and targeted marketing campaign ... has propelled demand for Visipaque to new heights.”

172

*426

Because the NEPHRIC study itself concluded that Visipaque

may

perform better than

a LOOM,

and that conclusion accurately reports the study’s findings, GEH’s internal documents which advocate differentiation of Visipaque from other LOCM did not lead to a false message so long as GEH actually disseminated an accurate portrayal of the NEPHRIC results and did not extrapolate them beyond the limited comparison of Visipaque and Omnipaque. However, to the extent that GEH did not so limit its comparison and message, it would result in a false message.

ii.Sales Trends

In the LOCM market, three players (GEH, Braceo and Tyco) control 97% of the market, with Tyco’s share almost entirely due to the Premier GPO. (P849:881; 8 T 123 (Quinn), 18 T 114 (Malackowski), 21 T 91-92 (Medici)). The Court finds that, outside of the Premier GPO (which is not part of Bracco’s damages claim), the LOCM market effectively is a two-player market. This finding is reinforced by the undisputed facts of record that Braceo and GEH were effectively the only two competitors for the Novation, Consorta and Kaiser contracts (as discussed below). Mr. Medici testified both parties’ market shares were stable but “changed dramatically” after the NEPHRIC article was published and its subsequent marketing, with GEH’s sales increasing and Bracco’s decreasing. (21 T 93, 97, 103-104, 110-113). Mr. Peters agreed that initially Visipaque had grown only gradually but “grew very well after the NEPHRIC study, yes.” (6 T 44).

173

iii. The Parties’ Surveys

The Court is excluding both Bracco’s survey expert, Dr. Rappeport, as well as GEH’s survey expert, Dr. Ericksen. However, Mr. Quinn, GEH’s Vice President of Sales, in an email to GEH officials, announced the results of an informal study of physicians and their feedback regarding the NEPHRIC article, including the “top 3 messages that excite physicians to action,” “Safety inpatient with creatine above 1.5,” “Less Nephropathy” and “Isosmolar Visipaque is 11 times less likely to cause renal failure.”

174

In this case, each of these general statements may be part of a true advertising campaign, but only if they plainly describe the circumstances of the underlying studies,

e.g.

type of patients tested, and the actual products that were tested (and not in small footnoted material); GEH may not extrapolate these findings to CM which were not compared in these studies.

iv. Bracco’s Harm and Response

Mr. Medici and Dr. Spinazzi testified that Braceo expended substantial resources, including spending millions of dollars, responding to the effects of GEH’s allegedly false

claims

— e.g., responding to purportedly deceived customers; responsive advertising; sponsorship of the Sharma, Solomon and Solomon/DuMouchel papers; and two head-to-head Visipaque versus Isovue studies (CARE and IMPACT).

(E.g.,

20 T 108-149; 21 T 99-110). Braceo alleges that GEH’s false ads caused Braceo and Isovue to lose sig

*427

nificant reputation and goodwill.

(Id.)

However, Bracco’s complaints about spending additional funds to sponsor studies verifying its product’s efficacy cannot all be laid at the feet of GEH. Braceo and GEH are the primary players in the field of CM and thus, fiercely compete against each other in the marketplace, obviously target each other, and look to tout their own products whenever possible. Indeed, as shown during the course of the trial, by way of the sheer number of sponsored studies proffered by both parties over the years, in this business it appears to be commonplace, if not a necessary part of the industry, for companies to spend significant amounts of capital in support of scientific comparative studies to promote sales of their products. Moreover, the Court was surprised by the revelations that virtually every clinical trial, study, and resultant publication in this area was sponsored by GEH or Braceo. In some cases, the principal investigators were paid consultants to one of these companies. This has lead the Court to conclude, and lament, that there is little in the way of a truly independent clinical study in the CM market.

v.Anecdotal Evidence of Visipaque Superiority

GEH argues that customers also observed Visipaque’s alleged superiority, anecdotally. However, GEH’s medical department concluded that “spontaneous clinical observation cannot give any statistical evidence” and only head-to-head studies can determine renal safety. (P260:413; 13 T 72-74). GEH’s clinical expert, Dr. Feldman, concurs, 35 T 118-120; P3738:P3, as does the Court. Consequently, the Court finds that anecdotal evidence does not impact the validity or invalidity of GEH’s superiority claims, and cannot be used to bolster the claims.

vi. Visipaque Leverage.

GEH developed a “Visipaque Leverage” strategy to keep existing accounts and convert competitive accounts by (1) “penetrating” the account with Visipaque; and (2) “leveraging” a contract award by threatening to raise Visipaque prices if GEH lost the bid for its other products. The 2004 Visipaque, Omnipaque, and Omniscan Marketing Plans all prominently feature Visipaque leverage.

175

Shortly after GEH developed its “WAT” tool to illustrate Visipaque Leverage to its customers, it observed “several examples already of customers threatening to leave [GEH] ... that reconsider their decision once they understand the consequences of Visipaque price increase should they decide to leave [GEH] on other products.” (P786:201, 470).

vii. The Novation Contract

In 2004, Novation issued an invitation to bid (ITB) for its Injectable CM (ICM) contract.

176

GEH, Braceo, Berlex Labora

*428

tories, Bristol-Myers Squibb, Guerbet, and Tyco Healthcare submitted bids.

177

Novation selected twelve members from Novation hospitals to comprise a Task Force (“TF”) charged with assisting in the evaluations.

178

Its members were experienced with CM. Shortly before the TF’s meeting at which it decided to award a separate technology contract for Visipaque, Novation provided the members with COURT, NEPHRIC, and VICC.

179

The TF recommended, and Novation awarded, a technology contract for Visipaque.

180

At the technology meeting, a Novation representative presented the technology claims for three products. With respect to Visipaque, the representative “went over all of the clinical documentation and referenced the pre-reading. The consensus of the TF was that this contrast agent is unique and innovative and offers clinically proven incremental benefits over other products on the market. The TF believes Visipaque should be carved out and identified as innovative.”

181

It is unknown which specific incremental benefits the TF considered or upon what specific information the TF relied in making its decision to carve Visipaque out of the ICM bid.

182

Generally, Novation asked the TF “to use [relevant] information along with their personal practical and own clinical experience to evaluate not only the bids but new technology submissions. And so it’s [Novation’s] belief that they do that.”

183

It also asked the TF members “to do their own research within their institutions and talk to those clinicians who have further experience, and we expect them to represent that fairly in their decision-making process.”

184

Novation saw no evidence that the TF relied on advertising in concluding that Visipaque offered clinical benefits.

185

Indeed, the stated conclusion of this experienced task force — that Visipaque offers “clinically proven” benefits— is itself evidence that experts in the field can reasonably conclude that Visipaque has advantages over other CM.

In April 2004, as a result of the technology award, Visipaque was carved out from the ICM contract decision process; the TF did not further consider Visipaque in analyzing either the non-financial or financial components of the ICM bids.

186

Even after Visipaque had been carved out, GEH received the highest scores from the TF with respect to all non-financial criteria (NFC).

187

Novation’s contract develop

*429

ment department evaluated the financial portions of the bids and scored each supplier with respect to the financial criteria (FC).

188

The bidder with the lowest ratio of FC score to NFC score has the low best bid.

189

Novation awarded a sole-source contract to GEH based upon its top score on the NFC and its low-best bid for an x-ray/CT and MR combined contract, and based upon the fact that it was the only qualified bidder on ultrasound.

190

The Novation TF appears to have based its evaluation of GEH’s bid on personal experience, feedback from physician colleagues, clinical information, and the positive relationship Novation had with GEH.

191

It is impossible to determine how, if at all, the award decision would have been “different if in fact the council viewed Visipaque differently than [it] did,” and had Visipaque not been carved out.

192

Ultimately, on March 1, 2005, Novation, a long-time customer of GEH, announced that GEH had won a sole-source contract for X-ray and MR CM. (P4118).

193

As is usual in this market, all bidders, except GEH and Braceo, were eliminated early.

194

Novation identified presumptive winners using a formula Low Best Bid (“LBB”) = FC/NFC. (P4126, 4083). The LBB results appear on a CT Decision Award Criterial Matrix (“DCAM”); MR DCAM; CT + MR DCAM; and Dual DCAM. (P4083). NFC scores were provided by the TF and FC scores were calculated “in-house” at Novation.

195

Braceo was the LBB for the CT DCAM and the Dual DCAM. Braceo was a very close second on the two other DCAMs;

*430

[[Image here]]

(19 T 63; P4083; 37 T 44-45). This is because Bracco’s FC scores were millions of dollars lower. (P4083; 37 T 38 — 40).

However, Braceo contends that if Visipaque had been included in the FC, Braceo would have been the lowest bidder for the CT + MR DCAM — by a margin of more than $13 million — and it would have therefore won both the CT and MR sole-source contracts.

196

Braceo further contends that GEH’s allegedly false Visipaque claims almost certainly affected the NFC scores as well. GEH’s NFC score was 138.2 points higher than Bracco’s. (P4083, 4084; Sweeney T 316-7). Braceo would have won the CT + MR DCAM (and thus both contracts) if GEH’s NFC score was only 15 points lower or, conversely, Braeco’s 13 points higher (or if both changed by 7-8 points). (P4085:101,103; 19 T 80-81; Sweeney T 256). The Court does not, however, find that GEH’s false advertising was a substantial factor in the TF’s carve-out decision. GEH maintains that Novation’s decision to renew its longstanding contract with GEH was not based on advertising, let alone GEH’s alleged false advertising, noting that GEH and its predecessors had held a sole source contract with Novation since at least the late 1980s and Novation was generally satisfied with GEH products and services.

197

In fact, Braceo even acknowledged that it was extremely unlikely that Novation would award a contract to another supplier and gave itself a 0% chance of winning a sole source award because of GEH’s strong relationship and history with Novation and the general satisfaction of Novation members with GEH products.

198

The Court finds this longstanding favorable business relationship highly probative of Novation’s decision to continue awarding the bid to GEH.

The Court also finds that the NE-PHRIC article itself was a substantial driver for Visipaque’s special carve out, and that even if there was false advertising in GEH’s ad campaign, it was not sufficient to be a material factor in this bid. The TF members and their colleagues

*431

were titled individuals chosen from the staff at various hospitals, who may have been exposed to GEH’s Visipaque promotional campaign,

199

but who were also privy to the underlying studies supporting such contentions. GEH’s pre-award sales call records on Novation member hospitals show the limited dissemination of GEH’s false superiority claims.

200

The Court finds that the offending sales call notes were too few to have a material impact on the award of the Novation contract nor were these sales calls made directly to any of the TF members participating in the decision. Although Braceo asserts that a few weeks before the carve out decision GEH met with the TF and again presented its Visipaque claims, the TF was still privy to the underlying studies and free to come to its own conclusions regarding Visipaque and its desirability as a CM.

201

More importantly, Braceo has not proffered evidence to show that any of the TF members were influenced by the ads as opposed to the underlying studies when they made their decisions.

202

In fact, Novation gave the TF a 27-page summary of the “things ... viewed to be most important” from GEH’s 300-page bid. Dan Sweeney, Vice President, Contract and Program Sales at Novation, testified that Novation provided the TF with GEH’s bid summary to serve as the main reference to evaluate GEH’s bid.

203

However, Mr. Sweeney could not testify what additional information the TF members considered except for their own personal experience in the medical field. (Sweeney T 66:9-23). Even if the TF only considered the bid summary, the Court finds that the bid summary does not claim Visipaque superiority to

all

LOCM. In response to the bid summary’s inquiry as to clinical studies that evaluate the safety and efficacy of the proposed products, GEH cited to the NEPHRIC, COURT, and VICC studies. Specifically, GEH expounded on NEPHRIC’s results as to renal safety, stating that “[i]n a comparison of VISIPAQUE vs. iohexol, VISIPAQUE was demonstrated to significantly reduce incidence of contrast-induced-nephropathy (CIN) ... and the conclusion was that nephropathy induced by contrast medium may be less likely to develop in high-risk patients when VISIPAQUE is used rather than

the

low-osmolar, non-ionic contrast medium.” (P4137:6331) (emphasis added). In light of their experiences, the TF members should have known that iohexol is Omnipaque and that NEPHRIC’s conclusions are limited to that comparison, given the language in the bid summary that Visipaque may be safer renally than

“the

lowosmolar, non-ionic contrast medium” compared in NEPHRIC. Absent from the bid

*432

summary is any mention of another LOOM, i.e. Isovue, or any statements that seek to extrapolate NEPHRIC’s findings to another LOOM. Essentially, the TF members were left to weigh the value of NEPHRIC and the other studies cited with respect to Visipaque.

Visipaque safety claims are the most salient feature of the NFC portion of the summary and likely account for most of the large disparity in GEH’s and Bracco’s NFC scores.

204

Mr. Sweeney, although

not

a member of the TF, admitted that the TF members likely read GEH’s bid summary to mean that Visipaque has superior safety to other CM and less pain than “traditional LOCM” which would include Isovue.

205

GEH’s GPO expert admitted that Braceo’s NFC score certainly could have been lowered by GEH’s Visipaque safety claims. Braceo alleges that the clinical information in the summary was so misleading that Mr. Sweeney thought that the NEPHRIC and COURT studies might have been against Isovue.

206

However, Mr. Sweeney was not on the Novation TF, and was only responsible for the financial aspect of the bidding process, without any sophisticated knowledge of the clinical nature of GEH’s bid. In fact, Mr. Sweeney conceded that he has limited knowledge of the clinical studies that evaluated the efficacy and safety of Visipaque. (Sweeney T 175-77). Accordingly, his lack of knowledge regarding scientific names of drugs (i.e. iohexol vs. iodixanol) that were represented in various studies is not probative of what was understood by the decision-makers — the TF members — because they had the underlying studies and were able to come to their own decisions regarding the efficacy of the products. Furthermore, the Court does not find this to be a substantial factor in the bid, because the vast majority of the material in the summary was not false or misleading and consisted of appropriate advertising materials which touted the NEPHRIC study results in an acceptable way, (See 37 T 6, 21; 36 T 220-229). The Court finds that any inaccurate information in the summary, limited as it was, did not have a material impact on the TF, particularly when combined with the TF members’ satisfaction with GEH’s products and GEH’s longstanding relationship with Novation.

viii. The Consorta Contract

In 1999, Consorta entered into a five-year, sole-source contract with Braceo for supply of x-ray and MRI CM.

207

Consorta put the contract out for bid in 2003 and received bids from at least Braceo, GEH, Berlex, and Tyco/Mallinckrodt.

208

In January 2004, Consorta awarded separate solesource contracts to GEH for X-ray and MR agents (Braceo is seeking only damages for loss of the X-ray contract). (P702). The X-ray contract awarded to GEH by Consorta was a three-year sole source contract.

209

Consorta’s Award Rationale states: “The imaging subcommittee agreed that the clinical acceptability of radiographic [x-ray] agents [ (e.g. — Isovue,

*433

Visipaque, and Omnipaque) ] would not be an issue,”

210

nonetheless, it also states that “Bracco’s ProHanee™ [ (Bracco’s paramagnetic agent) ] ... had not garnered high compliance ... and that determining clinical acceptance of the paramagnetic agents was a critical step in the decision making process.” The Consorta Award Rationale later states that GEH “was the only company that could provide clinically acceptable products, with formidable market positions, for both our radiographic and paramagnetic needs [and furthermore, that GEH] “is the only manufacturer of Isosmolar Contrast Media (Visipaque™).” ”

211

GEH avers that the reasons for the award were: (1) GEH is the only manufacturer of Isoosmolar CM; (2) GEH’s more competitive prices for Omnipaque and Visipaque; (2) low clinical acceptance of Bracco’s MRI product, ProHanee; and (3) Con-sorta’s belief that Braceo acted unethically during the bidding process.

212

Also, the Consorta members’ satisfaction with GEH’s products, based in part on their own clinical trials, contributed to their decision to contract with GEH.

213

Braceo asserts that, despite all the abovementioned factors, that GEH’s false advertising campaign was a material factor in the Consorta Award. The Court disagrees, but will begin its analysis by looking at internal GEH dialogue and the dialogue between Consorta and GEH. Mr. Jay Rapp, National Accounts Director at GEH, told Mr. Smith, his supervisor, that “[w]e need to drive as much Visipaque business within Consorta accounts as possible between now and the RFP process.”

214

Mr. Smith agreed “Visipaque will be key to our success” and said the “POA should [include] specific elements for increasing Visipaque sales.”

215

Mr. Rapp told Consorta’s Dan Ingram, Manager of Imaging Contracts, that Visipaque “must be part of the [financial] comparison,” and further stated in an internal GEH email that Dan Ingram “understands this, but we need to make this clear at the [July 2003] presentation as well as individual meetings ... and explai[n] the cost of not using Visipaque.” (P629; 12 T 111— 112; P4226, 608). GEH’s July 2003 presentation devoted nine slides to Visipaque’s alleged benefits (versus three Omnipaque

*434

slides). (P782:890 — 901; 12 T 138-148). Braceo points to evidence that Consorta “asked about Isovue with respect to Omnipaque/LOCM as positioned in NEPHRIC” and that GEH responded: “it is Iso-osmolar versus low-osmolar that was studied [in NEPHRIC], not necessarily Visipaque versus Omnipaque.” (P682; 2 T 153-157).

GEH’s statements emphasize the possible extension of the NEPHRIC head-to-head study to all LOCM, and at the same time deflect negative reaction away from Omnipaque. The above statement is ambiguous at best, but is not necessarily false, because the NEPHRIC study and article devotes part of its analysis to extending the conclusion from the two CM studied, Visipaque versus Omnipaque, to Visipaque versus other LOCM. Furthermore, NEPHRIC hedged its conclusion to say that Visipaque

may

perform better than

a

LOCM. The Court does not find that NEPHRIC was unreliable for this latter conclusion, but does find that GEH must disclose that the two CM used in the study were Visipaque and Omnipaque, and that GEH may not extend NEPHRIC’s results to a claim that Visipaque performs better than any LOCM other than Omnipaque. Here, Consorta was clearly aware that NEPHRIC compared Omnipaque and Visipaque. However, Braceo contends that GEH took its advertising a step further.

One example of the alleged false advertising in the GEH presentation was a NE-PHRIC slide claiming “high risk patients 11X less likely to develop CIN with an isosmolar CM, iodixanol, than with a lowosmolar CM.” (P782:A251897). However that same slide also presents a chart showing iodixanol (Visipaque) versus iohexol (Omnipaque).

(Id.)

While this slide appears to obscure the name brands of the products tested, it still presents the two CM that were tested in the study. Thus, the slide was not false, but it may have been misleading. Braceo contends that the aftermath of this presentation was that a Consorta “inside person” reported that GEH “made a good showing” and “Visipaque is something that has to be considered.” (P680; 12 T 158-160). But, this does not tell the Court whether it was the slides that made an impact.

As far as cost, Consorta told GEH it was “very concerned with Visipaque because of the impact increased use will have on Expense Budgets,” and Ron Smith concluded that “it will be imperative ... to effectively communicate ... a clinical reason ... to justify Visipaque use in high risk patients” and “it is essential that we clearly show the consequences on Visipaque pricing in a win and lose scenario.” (P612, 666; 12 T 174-178). GEH’s RFP response emphasized the alleged clinical superiority of Visipaque; for example, GEH stated: “the safety profile of Isosmolar Visipaque [] has propelled its growth in recent years” and “[c]ontrast with higher osmolalities could affect patients with at-risk conditions....” (0945:425-6,430; 12 T 179-180). Nonetheless, these statements are nothing new to the medical community, and certainly have not been disproven. The Court finds that inserting the word

“could”

merely re-states the conclusion of the NEPHRIC study, and does not contain additional spin. Notwithstanding, as set forth herein, more precision will be required of GEH’s ads in the future as limited by this Opinion. In short, an implication that NEPHRIC’s conclusions can be applied to any LOCM other than Omnipaque will not be permitted based on NE-PHRIC alone. In addition, any comparative advertisement based upon a study must be consistent in its reference to the names of the drugs tested; for instance, if GEH were to advertise the comparative results of NEPHRIC, its reference to the

*435

drugs must be “Visipaque v. Omnipaque”

or

“iodoxianol v. iohexol.”

Consorta’s January 2004 press release stated that GEH’s products were “preferable due to Amersham’s range of product that includes ... the only iso-osmolar agent Visipaque available in the United States.” (P702:540; 12 T 197-199). Con-sorta’s internal announcement shows that its “Award Decision” was based in part on increasing use (and costs) of Visipaque. (P715:851-2; 12 T 201-203; P163:110, 146). Mr. Smith recognized how crucial Visipaque Leverage was to GEH’s win, stating that Consorta “had to consider what would happen to prices if Consorta went away from us [i.e.,] with Visipaque ... so we just can’t assume that our offer was $6 million better than Bracco’s offer. It wasn’t.” (P1469).

Braceo asserts that the most direct evidence of Visipaque Leverage is a memorandum produced by Consorta itself. In that document, Consorta compared the prices of a dual source award, Braceo (X-ray) / Berlex (MR), to a sole source award to GEH. (D212:004 (col. 2 and 3)).

216

The “three year spend” in the GEH column is slightly (0.4%) lower than the Bracco/Berlex column, but only because a Visipaque line item is included under Bracco’s heading. Braceo argues that if that Visipaque line item is replaced with Isovue, Braceo would have won the contract by a comfortable margin.

217

This evidence, however, does not establish that GEH’s false advertising was a material factor in the award; all it means is that Consorta viewed Visipaque as “a must have” product. Since Consorta could have come to this conclusion by reading the NEPHRIC article, and agreeing with its conclusions, it does not mean that the limited false or misleading ads GEH disseminated to Consorta were a substantial factor, particularly in light of other facts, as set forth below.

[[Image here]]

*436

1. GEH’s prices were more competitive than Bracco’s prices

The primary reason Consorta switched suppliers for its 2004 contract was pricing.

218

Consorta determined it would save about $16 million over three years by accepting GEH’s bid over Bracco’s bid, notwithstanding Bracco’s efforts to convince Consorta that the actual cost of contracting with GEH would be higher than contracting with Braceo.

219

Braceo decided not to lower its price for Isovue, despite being aware before submitting its bid that Consorta wanted lower prices.

220

Even Braceo, in hindsight, rec.ognized that it should have offered Consorta a lower price during the contract extension negotiations.

221

Mr. Malackowski, Bracco’s damages expert, admitted that GEH’s bid was less than Bracco’s initial bid due to the low Omnipaque price, even after accounting for so-called “Visipaque leverage.”

222

However, the second bid by Braceo was competitive. One of the key issues was pricing in the event that Consorta obtained a dual source contract with GEH and Braceo. Under those conditions, GEH would have charged a bigger premium for Visipaque which effectively made the GEH bid better. This shows that Consorta took into account that Visipaque was the only isosmolar CM on the market. In light of these findings, this Court disagrees with Bracco’s assertion that GEH’s false advertising as to Visipaque renal superiority over LOCM had a material effect on the bid process. Braceo has not demonstrated that the few false ads shown by GEH to Consorta were a material factor in its favorable view of Visipaque.

2. Bracco’s ProHance product was not well accepted

Another asserted reason for Consorta’s award was the low compliance with the MR portion of its contract when Braceo was the incumbent.

223

Consorta’s members had clinical concerns about ProHance, including its inducement of vomiting.

224

Not surprisingly, Consorta officials were highly receptive and impressed with GEH products, so much so that some, based on their own clinical trials, wanted to continue

*437

using GEH products. Although a dual source bid would have alleviated concerns about the ProHance product and was an option that would have had competitive pricing had it not been for the Visipaque premium, Consorta’s award rationale appears to be based primarily on GEH’s ability to provide clinically acceptable products across all spectrums as contrasted with Braceo. Thus, the Court finds that GEH’s limited false advertising was not a material factor, while Bracco’s failing ProHance product was a material factor in Consorta’s award rationale.

3. Consorta believed Braceo acted unethically in bidding

After the suppliers submitted bids to Consorta, Braceo learned through “competitive intelligence” that GEH had submitted a much lower bid.

225

Braceo then restructured its bid so that it was similar to GEH’s and submitted a revised bid.

226

Consorta believed that it would be unethical for it to consider the revised bid.

227

Indeed, Bracco’s internal documents also attribute the loss of the Consorta contract to a variety of other factors, unrelated to alleged false advertising, including Bracco’s lack of understanding of Consorta’s contracting process and a lack of “depth and breath [sic] of relationships” between Braceo and Consorta.

228

Consorta’s subjective view of Bracco’s actions in the bid process, as opposed to GEH’s advertising, sounded the death knell for Bracco’s bid.

ix. GEH’s Allegedly False Visipaque Claims And Leverage were not a Material or Substantial Factor in the Award of the Kaiser Contract

In August 2003, GEH signed a sole-source agreement with the Kaiser IDN, even though Kaiser had joined the Broad-lane GPO which had a sole-source contract with Braceo. Braceo avers that GEH’s allegedly false claims about Visipaque were a material factor in GEH’s contract win at Kaiser and that it is shown by GEH’s post-award analysis that GEH won the contract by demonstrating to Kaiser that its “contrast media spend budget would increase” as a result of “increased Visipaque penetration” and a “[p]riee increase from 45% to 20% off list for Visipaque if they switched to Braceo and Broadlane.”

229

However, the Court fails to see how this links the alleged false advertising with the Kaiser bid. Offering a more competitive price and offering other products at a discount for putting other GEH products on contract is an acceptable business practice. In addition, GEH had

*438

held a sole source agreement with Kaiser for the supply of x-ray CM since 1993 and had enjoyed a favorable relationship with Kaiser.

230

In addition, during negotiations for an extension, GEH lowered its price on Omnipaque.

231

There is no evidence that advertising played any role in the renewal.

III. GEH’S Counterclaim

GEH alleges that Braceo has disseminated ads in violation of 43(a) of the Lanham Act and New Jersey State Law. During the course of trial GEH stipulated to dropping all claims for damages in its counterclaim, leaving only a request for injunctive relief. (36 T 4-8). In Bracco’s Revised Findings of Fact (¶ 96) it stipulated that the Braceo ads and promotions identified by GEH (except D2013) in connection with its counterclaim are no longer in use. Braceo contends that due to this stipulation any injunctive relief against Braceo would have no effect on GEH, Braceo or the market.

A. Bracco’s Comparison of Results from Kay and NEPHRIC

GEH contends that Braceo advertisements

(e.g.

D3, 31, 2014, 2015) promote Isovue as less renally toxic than Visipaque and/or Omnipaque. In order to make that claim, Braceo relies on the results of the Kay study and represents in these advertisements that NEPHRIC and Kay were similar studies.

232

GEH argues that the two studies were not similar because: (1) NEPHRIC patients were at greater risk for renal injury than patients in Kay; (2) NEPHRIC patients received a greater iodine dosage than the Kay patients; and (3) Kay did not even report the iodine concentration of Isovue used. In support of its contention that D2014 and 2015 disseminated false messages, GEH proffered Dr. Harold Feldman, who testified that in his opinion, the studies were not comparable.

(E.g.,

21 T 139:12-159:13; 32 T 73:23-75:5). The Court finds that Bracco’s advertisements that compare the results of Kay and NEPHRIC advance comparisons that are unreliable given the distinct differences between Kay and NEPHRIC, specifically that the patients in NEPHRIC had a substantially higher risk of renal injury than those patients in the Kay study. Indeed, any claim of Isovue superiority over Visipaque and/or Omnipaque based on comparative results of the Kay and NEPHRIC studies strays too far from the actual results.

IV. Daubert Motions

Necessarily, the Court must dispose of remaining evidentiary issues in connection with the admission of expert testimony. At trial, numerous experts for both sides testified on a broad swath of subjects ranging from the reliability of clinical studies using contrast media to testimony on the impact and dissemination of the parties’ marketing materials. These experts provide the lynchpin to the parties’ claims. Furthermore, expert testimony is critical in establishing damages and proving liability under certain prongs of the Lanham Act’s false advertising regime.

*439

A. Standard

Federal Rule of Evidence 702 requires that only reliable testimony, offered with a sufficient factual basis, be admitted. It was amended in response to the Supreme Court’s decision in

Dauberb v. Merrell Dow Pharms., Inc.,

which established a “gatekeeping role for the judge,” whereby the court must determine the admissibility of expert testimony. 509 U.S. 579, 597 , 113 S.Ct. 2786 , 125 L.Ed.2d 469 (1993).

Kumho Tire v. Carmichael

explained that the Court’s gatekeeper function applies not only to cases involving “scientific” knowledge but also in cases involving “technical” and “other specialized” knowledge. 526 U.S. 137, 141 , 119 S.Ct. 1167 , 143 L.Ed.2d 238 (1999).

Together,

Daubert

and Rule 702 impose three requirements for admissibility of expert testimony: “qualification, reliability, and fit.”

Calhoun v. Yamaha Motor Corp.,

350 F.3d 316, 321 (3d Cir.2003). First, the witness must have specialized expertise appropriate to his testimony.

Feit v. Great-West Life and Annuity Ins. Co.,

460 F.Supp.2d 632, 636 (D.N.J.2006). Second, the testimony must be reliable, which excludes opinions based on subjective belief or speculation; the opinion instead must “reliably flow from the facts known to the expert and the methodology used.”

Id.

at 637 . Third, the testimony must be relevant to issues in the case and assist the trier of fact.

Id.

at 636 .

B. Motion to Preclude the Expert Reports and Testimony of John Russell

Mr. John Russell, Bracco’s pharmaceutical marketing expert, has 33 years of experience in sales, sales management, sales operations, product management, new product launches, reimbursement, pricing strategy, contracting strategy, market research, and business planning concerning pharmaceuticals. Mr. Russell authored four expert reports and testified about pharmaceutical sales and marketing. Braceo asserts that his testimony is intended to provide a full and detailed understanding of the manner in which pharmaceutical companies traditionally sell and market their products as well as his understanding of GEH marketing and sales practices. His opinions were informed by analyzing GEH internal documents, deposition transcripts, review of other expert reports and discussions with people in the specific field of selling CM.

1. Mr. Russell’s Opinions on Whether Alleged Implicit “Messages” Contained in GEH Advertisements and Internal Documents are False are Excluded.

Mr. Russell testified that GEH documents, including advertisements and sales call notes, contained implicit messages. He based his conclusions on other expert reports provided to him. (17 T 12:25-13:10). During trial, the Court stated that Mr. Russell, who is not a physician or scientist, and has no experience with contrast media, may provide testimony based on the assumption that Defendants’ disseminated messages were false, but that he is not qualified to make an independent determination of their falsity. (17 T 12:25-13:10, 106:6-107:3-5). Mr Russell also testified to customers’ supposed expectations of pharmaceutical advertising. (17 T 49:9-15). However, Mr. Russell did not conduct or rely on any official customer survey for his opinions (17 T 34:14-18), and relied primarily on his own belief of what customers would understand and expect. (18 T 10:7-24, 11:20-14:3, 14:14-18:18, 21:2-22:2, 22:8-23:12).

The Second Circuit has discussed the critical role of customer surveys in the

*440

context of establishing a claim of false advertising under the Lanham Act.

Generally, before a court can determine the truth or falsity of an advertisement’s message, it must first determine what message was actually conveyed to the viewing audience. Consumer surveys supply such information. Once the meaning to the target audience has been determined, the court, as the finder of fact, must then judge whether the evidence establishes that they were likely to be misled.

Johnson & Johnson Merck Consumer Pharms. Co. v. Smithkline Beecham Corp.,

960 F.2d 294, 298 (2d Cir.1992) (citations and quotations omitted). Furthermore, the Second Circuit went on to state that:

Absent such a threshold showing, an implied falsehood claim must fail. This follows from the obvious fact that the injuries redressed in false advertising cases are the result of public deception. Thus, where the plaintiff cannot demonstrate that a statistically significant part of the commercial audience holds the false belief allegedly communicated by the challenged advertisement, the plaintiff cannot establish that it suffered any injury as a result of the advertisement’s message. Without injury there can be no claim, regardless of commercial context, prior advertising history, or audience sophistication.

Id.

In addition, the Third Circuit has concluded that, in the context of direct marketing to consumers, an expert’s “personal opinion is not the legal standard by which courts must determine whether customers were misled” and that absent evidence such as customer surveys, no court can conclude that consumers were mislead. See

Johnson & Johnson-Merck Consumer Pharms. Co. v. Rhone-Poulenc Rorer Pharms. Inc.,

19 F.3d 125, 136 (3d Cir.1994).

Here, Mr. Russell’s opinion as to falsity of messages is not only unsupported, but is also irrelevant to the issue of customers’ understanding and reaction to the advertisements. Therefore, the Court finds that Mr. Russell’s net opinion or personal belief about alleged implicit messages or customers’ expectations is legally irrelevant because he is not a member of the relevant purchasing group, did not rely on a survey of this group, and is unqualified to opine on the issue of how physicians would evaluate and act upon scientifically oriented ads or promotions for x-ray contrast media. Consequently, Braceo cannot rely on Mr. Russell’s testimony as a substitute for its failure to conduct an adequate survey.

2. Mr. Russell’s Opinion on Intent, the Actions of Sales Representatives, Causation, and Sales Call Notes are Unreliable.

a. Mr. Russell Cannot Opine on GEH’s State of Mind

Mr. Russell purported to divine what GEH was “trying” to do with its marketing strategy and what it believed was right or wrong.

{See, e.g.,

17 T 65:6-17, 66:19-22, 81:14-16). However, as the Court stated during trial, experts cannot opine on intent. (17 T 4:19-7:18);

see AstraZeneca LP v. TAP Pharm. Prods., Inc.,

444 F.Supp.2d 278, 293 (D.Del.2006) (precluding expert opinion of what party recognized,

felt,

concluded, or was

concerned

about and recognizing that expert witnesses are not “permitted to testify ... regarding [the defendant’s] intent, motive, or state of mind, or evidence by which such state of mind may be inferred.”);

In re Rezulin Prods. Liability Litig.,

309 F.Supp.2d 531, 547 (S.D.N.Y.2004) (concluding that “[i]nferences about the intent or motive of parties or others lie outside the bounds of expert testimony”). Accordingly, the Court strikes Mr. Russell’s testi

*441

mony to the extent that it opines on the intent or state of mind of others.

b. Mr. Russell’s Speculation About the Actions of GEH Sales Representatives is Unreliable

Mr. Russell speculated that GEH sales representatives posted protocols for Visipaque usage; that conclusion is unreliable and in conflict with the factual record. (17 T 101:13-14). During the course of trial, the Court quoted

Crowley v. Chait,

which concluded that no expert or “any other witness will be permitted to simply summarize the facts and the depositions of others. Such testimony comes ‘dangerously close to usurping the [factfinder’s] function’ and ‘implicates Rule 403 as a needless presentation of cumulative evidence and a waste of time.’ ” 322 F.Supp.2d 530, 553-54 (D.N.J.2004) (quoting

United States v. Dukagjini,

326 F.3d 45, 54 (2d Cir.2003)). GEH witnesses uniformly and credibly testified that Visipaque protocols were not posted (6 T 75:1-7; 15 T 191:9-22; 16 T 151:17-152:1), and accordingly, the Court finds that it is not Mr. Russell’s function as an expert to judge the credibility of those witnesses, or to supplant the factual record with speculative testimony.

c. Mr. Russell’s Testimony Regarding Causation is Unreliable

GEH argues that Mr. Russell’s opinions , about causation,

(See, e.g.,

17T 115:12-18, 116:1-5, 116:12-21, 117:1-4), are speculative and unreliable because he has no experience with contrast agent purchasing decisions and did not fully consider the factual record. It is true that Mr. Russell never negotiated a contract to sell contrast agents to a GPO or hospital (17 T 31:8-11), was never on a committee evaluating contrast agents (17 T 31:12-15), never made purchasing decisions at a hospital or GPO (17 T 31:16-18), and has not worked on any GPO contract since 1992. (17 T 31:19— 21). Furthermore, the Court finds that Mr. Russell did not undertake a systematic or scientific analysis of all factors to determine the specific effect of any particular piece of advertising, (i.e., he did not separate out the effect of any particular piece of advertising, marketplace effects or influences other than alleged false advertising, including true advertising). (17 T 34:3-38:12).

For example, with regard to Consorta and Novation, he failed to consider the economics of the bids (17 T 145:12-20, 148:5-11, 150:18-20, 166:12-25), and in the case of Consorta, did not consider Braceo and Consorta documents showing that Consorta was displeased with Bracco’s conduct during the bidding process and with its MRI agent ProHance (17 T 145:3-20; D 2098 at Consorta 0322; D 204 at A143081; D 212 at Consorta 002). Mr. Russell also failed to talk to Braceo executives about the Consorta contract (17 T 145:21-146:24), and did not consider GEH’s long-time incumbency at Novation, despite opining that Bracco’s incumbency at Consorta was a reason that it would have kept the contract. (17 T 168:14-170:4).

GEH argues that Mr. Russell’s opinions about customer purchasing decisions are connected to the facts of the case only by his own

ipse dixit

and thus, are unreliable.

See Calhoun,

350 F.3d at 321 (where the court excluded testimony that offered opinions on specific matters without a reliable foundation);

Ortiz v. Yale Materials Handling Corp.,

No. 03-3657, 2005 WL 2044923 , at *4, 2005 U.S. Dist. LEXIS 18424 , at *15 (D.N.J. Aug. 24, 2005) (holding that “[a] court may conclude that there is simply too great an analytical gap between the data and the opinion proffered”

*442

and thus exclude the expert’s testimony). Nonetheless, an expert need not take into account every possible factor in rendering an opinion.

See MicroStrategy Inc. v. Business Objects, S.A.,

429 F.3d 1344, 1355 (Fed.Cir.2005) (“While an expert need not consider every possible factor to render a ‘reliable’ opinion, the expert still must consider enough factors to make his or her opinion sufficiently reliable in the eyes of the court.”);

Callahan v. A.E.V., Inc.,

182 F.3d 237, 257 (3d. Cir.1999) (where the court rejected defendant’s argument that an expert report was inadequate because it failed to rule out every possible alternative cause for plaintiffs loss);

Yarchak v. Trek Bicycle Corp.,

208 F.Supp.2d 470, 498 (D.N.J.2002) (“a medical expert’s causation conclusion should not be excluded merely because he or she failed to rule out every possible alternative cause of a plaintiffs illness.”) (citation omitted).

In this case, while Mr. Russell did undertake an analysis of internal GEH documents which were produced during the discovery period before trial,

but see

Section 3, p. 84,

infra,

he did not take into account numerous, or indeed, most relevant factors as to causation. Thus, his opinion is not reliable.

d. Mr. Russell’s Testimony Regarding the Percentages of Alleged “clinical differentiation messages” in GEH’s Sales Call Notes is Unreliable

Mr. Russell opined as to the percentage of GEH sales call notes he believed were “clinical differentiation messages” or “on-message,” and the percentage of sales representatives who had delivered the same

(see, e.g.,

17 T 102:15-21, 107:8-16). However, on cross examination, Mr. Russell admitted that the “on-message” compilation he relied on had been done by Bracco’s counsel (18 T 26:2-7, 29:7-16), and he could not explain why a number of notes had been included at all (18 T 36:17-37:1, 44:3-45:7, 46:5-18). When pressed, Mr. Russell testified that mere mention of the word NEPHRIC justified inclusion in his “on message” tallies (18 T 33:22-34:4). In fact, even when the word NEPHRIC was not mentioned in the call note, Mr. Russell speculated that it had been promoted during the sales call (18 T 34:21-35:25). He also included notes in which he could not determine if the statement at issue was made by the sales rep or the doctor (18 T 38:25-41:19). Because of these numerous shortcomings, Mr. Russell’s “on-message” analysis is unreliable and is hereby excluded.

3. To the Extent that Mr. Russell’s Testimony Was Nothing More Than an Attempted Summary of, and Spin On, Internal GEH Documents it is Excluded

The Court finds Mr. Russell’s testimony helpful to the extent that he provides information as to how a marketing department operates, however to the extent that Mr. Russell’s testimony reflected no more than his summary of, and spin on, internal GEH documents

(see, e.g.,

17 T 51:8-11, 69:24-70:3, 80:22-81:17, 119:6-22), the Court finds that such testimony is unhelpful to the Court as the trier of fact and excludes such testimony from the record. This is because the documents speak for themselves and do not require expert testimony to discern what they mean.

C. Motion to Exclude Mr. Malackowski’s Testimony

Mr. James E. Malackowski was proffered by Braceo to opine about causation and damages. As stated in his expert report, he provides opinions on valuation,

*443

asset and risk management and is an expert in the field of intellectual capital equity management. In the past, he has served as an expert in numerous cases relating to intellectual property economics and the determination of economic damages in disputes concerning intellectual property infringement, breach of contract, and false and misleading advertising. Indeed, he is eminently qualified in these areas. In this action, he has submitted four expert reports and he testified at trial.

1. Mr. Malackowski’s Testimony With Respect to the Issue of Causation is Limited to his Assumption that Causation Existed

Mr. Malackowski assumed that causation existed. (19 T 106:16-21, 107:17-21, 181:8-20). Mr. Malackowski has no expertise as to why doctors prescribe certain drugs or why GPOs award certain contracts. (19 T 104:17-106:4). Thus, he was qualified only as an expert with respect to the quantification of damages, not the issue of causation. (19 T 86:25-91:11). Nonetheless, while Mr. Malackowski is only qualified as an expert on damages, in his damages assessment the Court permitted him to use GEH internal documentation such as GEH’s annual marketing plans, which in some instances attribute sales growth to specific events, such as the publication and dissemination of the NEPHRIC data. This testimony is intricately tied to damages and is not excluded.

(See

18 T 141-142).

2. Malackowski’s Damages Calculations Fail to Distinguish Between the Marketplace Effects of Tortious and Non-Tortious Conduct

Defendants argue that Mr. Malackowski failed to account for the marketplace effects of activities other than GEH’s alleged false advertising, thus making his damages testimony in connection with Vispaque sales unreliable. To support their contention, Defendants rely on a series of cases that have excluded expert testimony when it failed to take into account the effect of non-tortious activity in its calculations.

See IQ Prods. Co. v. Pennzoil Prods. Co.,

305 F.3d 368, 376-77 (5th Cir.2002) (affirming exclusion of expert report where expert considered combined effect of two allegedly tortious acts, but did not consider them independently, and one was determined to be non-actionable); Concord

Boat Corp. v. Brunswick Corp.,

207 F.3d 1039, 1055-57 (8th Cir.2000) (holding that expert testimony should not be admitted when it fails to separate lawful from unlawful conduct);

See also MicroStrategy Inc.,

429 F.3d at 1353-56 ;

Children’s Broad. Corp. v. Walt Disney Co.,

245 F.3d 1008 , 1018-19 (8th Cir.2001);

Blue Dane Simmental Corp. v. Am. Simmental Ass’n,

178 F.3d 1035, 1039-41 (8th Cir.1999);

El Aguila Food Prods. Inc. v. Gruma Corp.,

301 F.Supp.2d 612, 624-26 (S.D.Tex.2003), aff’d, 131 Fed.Appx. 450 (5th Cir.2005).

Nonetheless, Plaintiff argues that it is not necessary for a damages expert to account for all possible sources of the injury to establish causation. The Third Circuit has held that “[cjourts that reason that the injury could have taken place without ... advertising are misstating the relevant tort liability principles, which ask whether the advertising did in fact contribute materially to the injury.”

Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co.,

193 F.3d 742 , 751 n. 8 (3d Cir.1999) (citation omitted). However, this does not address Defendants’ argument that Mr. Malackowski’s testimony is unreliable; it merely confirms the standard which is needed to establish causation. Since this Court has already ruled that Mr. Malack

*444

owski’s testimony in connection with causation is not admissible because he assumed causation, Plaintiffs recitation of the causation standard is not germane.

Here, Mr. Malackowski assumed that the publication of NEPHRIC itself (as well as other articles favorable to Visipaque) constitutes false advertising, and included the effect of its publication in his damages analysis without differentiating it from GEH’s other alleged false advertising. (19 T 129:4-9, 129:23-130:5). But, since the Court finds that NEPHRIC itself does not constitute false advertising,

see infra

pp. 466-67, then GEH’s alleged false advertising must be differentiated from the effect of NEPHRIC on Visipaque sales. To counter this argument, Braceo directs the Court to Mr. Malackowski’s testimony in which he states that it would not change the results of his account specific approach to calculating damages if the Court finds that NEPHRIC does not constitute false advertising. (19 T 130:2-14). Similarly, Mr. Malackowski testified that if the NE-PHRIC article were true that it would be accounted for within the sales trend approach in market growth rates because sales trends only go higher as the market grows.

(Id.)

The record demonstrates that Mr. Malackowski did not attempt to break down the injury to Braceo by particular ads or brochures. (19 T 109:24-110:8, 165:4-7, 176:4-12). The Court recognizes this as an attempt to avoid having to apportion any amount of damage (under any of his multiple theories) to any particular advertisement or type of advertisement. Thus, if any of GEH’s promotional efforts were proper, which this Court has found to be the case, then Mr. Malackowski has failed to account for the market effects of these non-tortious efforts. Mr. Malackowski’s failure to account for the effects of nontortious activity is fatal to the validity of his calculations since the Court finds the NEPHRIC article itself to not be a form of false advertising. Indeed, his “analysis” blames false advertising for: (1) 100% of the alleged drop-off in Bracco’s sales occurring after NEPHRIC; (2) 100% of Amersham’s Visipaque sales; and (3) 100% of Visipaque’s higher price (as compared to other contrast agents). (18 T 93:6-12; 19 T 107:17-108:17, 114:18-25, 143:6-14, 164:15-165:3,176:4-7).

3. Malackowski’s Damages Calculations as to Bracco’s Expenditures on Corrective Advertising

Finally, Braceo proffers Mr. Malackowski’s testimony to support its request for damages relating to corrective advertising and clinical trials done in response to NEPHRIC and GEH’s Visipaque advertising campaign. Although the Court excludes Mr. Malackowski’s testimony with regard to disgorgement and lost profit damages based upon an assumption of causation, which the Court finds is not supported, his opinions with regard to recovery of corrective advertising, past and future, are not subject to the same attack. Different from his disgorgement and lost profits analysis, the same causation analysis does not apply. In that light, the Court finds Mr. Malackowski’s opinion as to past and future corrective advertising costs reliable.

D. Motion to Exclude Mr. Pines’ Testimony

Mr. Wayne Pines was proffered by Braceo as an expert on FDA practices and regulations. His experience includes monitoring FDA regulation of marketing materials and advertisements. He was retained to provide testimony relating to the FDA and GEH’s advertising and promotion of its x-ray contrast agents, Visipaque and Omnipaque.

*445

1. Mr. Pines’ Testimony Relating to FDA Guidelines Is Relevant

GEH urges the Court to exclude Mr. Pines’ testimony that the FDA standard for superiority claims requires “substantial evidence,” which he acknowledged was defined by the FDA as two or more adequate and well controlled studies, each directly comparing the same two products. (14 T 216:10-217:2, 218:12-220:3; 15 T 43:1-7). GEH asserts that under the Lanham Act standard, neither FDA statements about the lack of “substantial evidence,” nor Mr. Pines’ spin on the same are relevant. Indeed, the Third Circuit has declined “to blur the distinctions between the FTC and [the] Lanham Act [because it] would require [courts] to ignore the separate jurisprudence that has evolved under each Act, and the sound reasoning that underlies it.”

Sandoz Pharms. Corp. v. Richardson-Vicks, Inc.,

902 F.2d 222, 229 (3d Cir.1990). In

San-doz,

the court further held that “it is not sufficient for a Lanham Act plaintiff to show

only

that the defendant’s advertising claims of its own drug’s effectiveness are inadequately substantiated under FDA guidelines; the plaintiff must also show that the claims are literally false or misleading to the public.”

Id.

(emphasis added). For instance, a defendant could advertise the results of one adequate well-conducted study showing superiority of its product (clearly not a Lanham Act violation), yet lack “substantial evidence” under the FDA standard. Nonetheless, Defendants’ reliance on

Sandoz

is misplaced because here FDA guidelines and statements regarding Visipaque are not the only evidence to support Plaintiffs Lanham Act claim.

Thus, while the Court declines to substitute the FDA standard for those under the Lanham Act, the Court finds the FDA’s response to be probative and not irrelevant. Courts have recognized that an FDA finding about the strength and veracity of a study’s conclusions about a pharmaceutical product to be persuasive evidence and helpful in determining if those conclusions were also false under the standard promulgated in the Lanham Act.

See Zeneca Inc. v. Eli Lilly and Co.,

No. 99-1452, 1999 WL 509471 , at *18 (S.D.N.Y.1999) (in a Lanham action, the court found the FDA’s conclusions to be persuasive when the FDA reviewed all the data from a trial, met with the study investigators and scientists and determined that based on its review that the study does not and cannot prove that the drug reduces the risk of breast cancer);

SmithKline Beecham Consumer Healthcare, L.P. v. Johnson & Johnsonr-Merck Consumer Pharmaceuticals, Co.,

No. 95-7011, 1996 WL 280810 , at *13 (S.D.N.Y. May 24, 1996) (court declined to substitute its opinion for that of the FDA where manufacturers had to submit studies to the FDA proving safety and effectiveness of over-the-counter medication in order to obtain approval for package labeling);

see also American Home Prods. v. Procter & Gamble,

871 F.Supp. 739, 754 (D.N.J.1994) (expert’s conclusion concerning efficacy of analgesic is “bolstered by the FDA’s formal findings” concerning the product). Similarly, this Court finds that Mr. Pines’ testimony on this issue is properly admitted.

E. Motion to Exclude Dr. Rappeport’s Testimony

Dr. Michael Rappeport, a Braceo expert, is a marketing and survey research expert with 35 years of experience. He has testified over 200 times in the areas of statistics, statistical analysis, marketing, and public opinion in disputes such as trademark infringement, libel, damages, and reapportionment. During trial, he testified regarding a survey that he conducted to determine physicians’ percep

*446

tions of GEH’s website advertising. Dr. Rappeport’s survey was carried out by DIR, a California based company. A total of 80 radiologists and 30 interventional cardiologists were interviewed and the survey referenced re-created web pages from the Visipaque portion of GEH’s website. The Court made a finding at trial that Dr. Rappeport was qualified to provide testimony in the field of designing, conducting, and analyzing surveys. (22 T 36-37).

1. Dr. Rappeport’s Survey is Unreliable

Defendants attacked the reliability of Dr. Rappeport’s trial testimony and underlying survey in their original

Daubert

motion on various grounds, asserting and highlighting: (1) uncertainties surrounding the material actually tested in his survey and Bracco’s failure to preserve it for review; (2) that his testimony is not helpful to the trier of fact; (3) problems with the definition of the survey population and the selection of respondents; (4) problems with the reporting and analysis of his data; and (5) problems with the design and administration of the survey. The Court notes at the outset that Dr. Rappeport’s survey is replete with problems that undermine the survey’s reliability. (D.I. 375). To state a few, the survey: (1) failed to identify the correct survey population by not asking survey respondents whether they were in any way responsible for the purchase of contrast media; (2) failed to use an adequate control mechanism to determine whether the respondents may have had preexisting or predominant views prior to viewing the advertisements that may have affected their decision; and (3) failed to correctly characterize certain statements made to the survey participants; for example, one statement was prefaced with the statement “the makers of Visipaque state,” when the statement was actually a direct quote from the NE-PHRIC study, a peer reviewed article in the New England Journal of Medicine. These factors all lead the Court to conclude that Dr. Rappeport’s survey is inherently unreliable and that even if it were admitted that it would be given little or no weight.

Initially, the Court strikes Dr. Rappeport’s survey as it pertains to the 30 interventional cardiologists interviewed. This is based on the fact that the web pages recreated by DIR for the survey administered to the 30 interventional cardiologists were never produced at trial, nor were their contents testified to by a witness with personal knowledge. Dr. Rappeport testified that he never saw the web pages that were re-created and used for the survey and neither counsel nor Dr. Rappeport were able to produce the original email from Dr. Rappeport which allegedly contained the web pages used in the survey. (22 T 65-66). Because displaying the web pages in the same manner as the website is critical to obtaining accurate and reliable survey results, and this information is lacking, the Court finds this portion of the survey unreliable.

The Court also finds that Dr. Rappeport’s survey with regard to the 80 radiologists is also fatally flawed and hence unreliable. First, the web page that was presented to the survey respondents did not contain a clickable link, as the actual GEH website did, to view the abstract of the NEPHRIC study. (22 T 74). Second, at trial, Dr. Rappeport gave inconsistent testimony about the interviewer’s instructions. First, he testified that they were instructed to write down anything material that the respondents asked or said, but then he testified that they were instructed to write down everything that they heard. (22 T 75). This discrepancy in what the interviewers were instructed can skew the results, especially in conjunction with the

*447

fact that the respondents were not able to click on a link that would have allowed them to view the abstract of the NE-PHRIC study. Third, the survey asked the participants whether they thought: “the makers of Visipaque are claiming reduced nephropathy compared to all brands of low-osmolar non-ionic contrast mediums, some but not all brands of lowosmolar non-ionic contrast mediums or just one specific brand of low-osmolar non-ionic contrast mediums?” According to Dr. Rappeport, this is a closed question which was designed to cover all possibilities. However, as shown in the survey, one respondent did not answer the question, demonstrating that the questions did not account for the participants that might have had no opinion on the matter. (22 T 80-81). Fourth, Dr. Rappeport attributed a quote from the NEPHRIC article, which was on the GEH website, to the makers of Visipaque. (22 T 82-83). While the website certainly contained the NEPHRIC quote, it may introduce a bias to attribute the statement incorrectly to the makers of Visipaque. Consequently, this also skews the survey’s results.

Fifth, the survey failed to identify the correct sample population; none of the survey questions established whether the participants were in any way responsible for the purchase of contrast media. Even without asking this question, many survey respondents independently stated that they were not involved in making the purchasing decision, and that their use of the product was mainly because the hospital uses that brand product, not because the respondent had any impact or influence on the purchasing decision. This is a critical flaw in the design of the survey, which makes it significantly less useful for determining whether consumers who were making the actual purchasing decision were deceived, a critical question in this case. During trial, Dr. Rappeport stated that in his opinion, all doctors influenced the purchasing decision for CM because it would be unethical for them to administer a product which they did not feel was the best product. (22 T 99-103). He came to this opinion by conducting a so-called pre-test where he contacted physicians and asked them questions so that he could become knowledgeable about the subject matter for the survey.

(Id.

at 103). The physicians that he contacted were not part of the actual survey.

(Id.)

In addition, Dr. Rappeport gave inconsistent testimony about how many physicians he interviewed for this pre-test. First he said 6, then he said 10, then he said it may be about 9 or so.

(Id.

at 103-105). He also stated that these physicians were friends, and friends of friends, all of whom were in the New Jersey and Pennsylvania area, not nationwide.

(Id.)

Furthermore, Dr. Rappeport testified that at least one of them was not even a radiologist or an interventional cardiologist.

(Id.

at 105). Dr. Rappeport then went on to state that all of the physicians in the pre-test stated that they personally make the decision as to what contrast agent they administer to patients, however yet again, the question of whether they were involved in the purchasing decision was never asked.

(Id.

at 108-109). The Court finds the quantum of Dr. Rappeport’s testimony to be unclear and his methods for conducting the survey not consistent with usual accepted practices; for these reasons the Court strikes the testimony and survey results of Dr. Rappeport as unreliable.

Case law from this district as well as others supports the contention that Dr. Rappeport’s survey needed control mechanisms to be reliable. For example, one court in the District of New Jersey opined: “[i]t is clear that in a false advertising action survey results must be filtered via an adequate control mechanism to screen

*448

out those participants who took away no message from the advertisement as well as to account for those consumers who may have brought to the survey certain publicly held preconceptions regarding the product.”

American Home Products Corp.,

871 F.Supp. at 761-62 ;

see also Merck Consumer Pharmaceuticals Co.,

960 F.2d at 298 (concluding that where a portion of the survey population may have held extrinsic beliefs prior to viewing an advertisement, a control mechanism “would likely be indispensable”).

Furthermore, the Court notes that in addition to other courts excluding expert testimony on similar grounds, another court specifically excluded one of Dr. Rappeport’s surveys because it did not use a proper control group. In

Procter & Gamble Pharmaceuticals, Inc. v. Hoffmann-LaRoche Inc.,

the court reasoned that the fact that the physician survey lacked any control was a marked departure from generally accepted market research practices, rejecting Dr. Rappeport’s contention that “a control group is unnecessary for sophisticated respondents like doctors, who are unlikely to ‘guess.’ ” No. 06-0034, 2006 WL 2588002 , at *25 (S.D.N.Y. Sept.6, 2006). Here, on cross examination, counsel confronted Dr. Rappeport with the fact that his lack of a control group has been rejected by other courts and Dr. Rappeport’s testimony reflected that although he did not think a control group is necessary for doctors, not all courts agree with him. (22 T 126-128). Additionally, he said that the main downside of using a control group is money, something that the Court finds to be disingenuous for this particular case, especially given the apparent staggering amount of legal fees and costs related to expert testimony.

233

(Id.)

Accordingly, the Court finds no basis for Dr. Rappeport to fail to use control group in this case, and that his survey is unreliable for lack of a control mechanism, similar to the courts’ analysis in

American Home Products Coi"p., Johnson & Johnson-Merck Consumer Pharmaceuticals Co.

and

Procter & Gamble Pharmaceuticals, Inc.

In addition to the grounds asserted in Defendants’ initial

Daubert

brief for exclusion of the testimony of Dr. Rappeport, Defendants assert in their post trial supplemental

Daubert

brief that Dr. Rappeport’s trial testimony revealed that his survey did not include the required number of participants to meet his own reliability standards. Specifically, Dr. Rappeport surveyed 80 radiologists and 30 interventional cardiologists. (22 T 73:10-12). However, the interventional cardiologists were shown a re-created website that Dr. Rappeport never saw, was never produced or shown to GEH, and was not introduced at trial. (22 T 60:23-61:22, 64:16-65:13). The Court disallowed reliance on the results of the interventional cardiologists subject to Bracco’s production of the recreated website, which it never did produce. (22 T 68:14-72:11, 74:1-75:24,147:7-150:13). Absent the interventional cardiologists, per Dr. Rappeport’s own admission, the survey was too small to meet prospectively defined reliability requirements. (22 T 110:21-111:10). Thus, the Court excludes Dr. Rappeport’s testimony in connection with his survey in its entirety.

F. Motion to Exclude Dr. Schmittlein’s and Dr. Stewart’s Testimony as Unsupported by Facts or Analysis

Dr. David Carl Schmittlein and Dr. Marion Stewart are two experts, prof

*449

fered by GEH, to rebut the expert testimony of Mr. Russell and Mr. Malackowski. Dr. Schmittlein is a Professor of Marketing at the Wharton School of Business at the University of Pennsylvania. His expertise is specifically within the field of measuring consumer perceptions, preferences, and behaviors, and the link between these measures and marketing programs. Dr. Stewart is an economist and senior vice president of National Economic Research Associates (hereinafter “NERA”).

Braceo argues that the testimony from GEH’s Dr. Schmittlein (36 T) and Dr. Stewart (37 T-38 T), regarding the cause of Bracco’s harm, is unreliable and lacks fit. Braceo incorporates its motions in limine (D.I. 344 and 384) and identifies additional arguments for exclusion as follows: (1) both experts asserted that there were possible causative “factors” that Bracco’s experts should have considered; (2) both experts failed to conduct any factual investigation into Bracco’s harm, the contrast agent market, or GEH’s practices to inform their testimony; (3) both experts failed to use any appropriate scientific methodology, such as interviewing knowledgeable people, reviewing GEH’s internal analyses or applying a survey or other experimental tool, to support their testimony; and (4) both experts failed to use any information except that which was spoon fed to them from GEH’s counsel.

As to Bracco’s first argument, it asserts that neither expert fit the factors to this case, such as by determining that the factors applied to the relevant market or that there were additional material factors entitled to weight, (36 T 43-52, 54, 58-83; 37 T 174-177) and that both GEH experts explicitly testified that they did not know enough to weigh these factors and determine any value to be accorded to them.

(Id.)

To support its assertion of lack of fit, Braceo looks to both Mr. Malackowski and Mr. Russell’s extensive investigations of GEH’s internal documents and examinations of the market as an example.

234

Braceo contends that Mr. Malackowski and Mr. Russell actually did look for and examine the facts in issue for the factors the GEH experts asserted may apply and found no evidence for them, thus concluding that GEH’s alleged false NEPHRIC advertising caused the harm that is the focus of its damages calculation.

(See, e.g.,

17 T 40-53, 64-132; 18 T 132-186; 19 T 59-76;

see also

Malackowski Expert Reports; Russell Expert Reports).

The Court finds that Dr. Schmittlein’s and Dr. Stewart’s “fit” to the facts of this case is too loose for the Court to allow admission of their testimony as to the external factors that they assert should have been taken into account in Mr. Malackowski and Mr. Russell’s methodology of determining damages. Braceo argues that both experts failed to conduct any factual investigation into Bracco’s harm, the contrast agent market, or GEH’s practices to inform their testimony, (36 T 54, 58-83; 38 T 35-102; Ex. E and F), further asserting that such testimony is unreliable and inadmissible under

Daubert. See, e.g., Crowley,

322 F.Supp.2d at 541-542 ;

see also Ortiz,

2005 WL 2044923 , at *6-7, 2005 U.S. Dist. LEXIS 18424 , at *21-23 (excluded for no independent investigation of accuracy of accident reports);

JMJ Enters. v.

*450

Via Veneto Italian Ice, Inc.,

No. 97-0652, 1998 WL 175888 , at *6-8 (E.D.Pa. Apr.16, 1998)(excluded for no independent investigation of damage numbers provided by client);

Chemipal Ltd. v. Slim-Fast Nutritional Foods Int’l,

350 F.Supp.2d 582, 589 (D.Del.2004) (excluded for no investigation of the methodology used in the third party marketing projections);

JRL Enters. v. Procorp Assocs.,

No. 01-2893, 2003 WL 21284020 , at *5, 7-8, 2003 U.S. Dist. LEXIS 9397 , at *14, 22-23 (E.D. La. June 3, 2003) (excluded where “conducted no independent investigation of these numbers,” but instead relied on the client’s numbers);

TK-7 Corp. v. Estate of Barbouti,

993 F.2d 722, 732 (10th Cir.1993) (excluded where relied on figures calculated by another without independent investigation).

The testimony provided by Dr. Schmittlein and Dr. Stewart was a composite of criticisms and conclusions based upon the methodology used by Bracco’s experts, Mr. Malackowski and Mr. Russell. In the Court’s view, these opinions would have benefitted from independent market analysis to properly critique Bracco’s experts. Moreover, their testimony may not be used to determine qualitatively the actual causes of Bracco’s failure to obtain the GPO contracts at issue.

Third, Braceo argues that both experts failed to use any appropriate scientific methodology, such as interviewing knowledgeable people, reviewing GEH’s internal analyses or applying a survey or other experimental tool, to support their testimony (36 T 54, 58-83; 38 T 35-102). Braceo asserts that this does not comport with Rule 702. This Court agrees. Fourth, Braceo argues that both experts failed to use any information except that which was given to them by GEH’s counsel (36 T 25-31, 38-41, 79; 38 T 35-102; Exhs. E and F). Braceo relies on a Third Circuit case which held that a medical expert’s testimony must be excluded when it was based on medical history summaries that were generated through interviews conducted by nonprofessionals aligned with counsel.

In re TMI Litig.,

193 F.3d 613, 698 (3d Cir.1999), amended by, 199 F.3d 158 (3d Cir.2000). However,

In re TMI Litig

is not analogous to the present case because Dr. Schmittlein’s and Dr. Stewart’s analyses were not based on summaries generated by GEH’s counsel, but were based on analyses of the methodology of Mr. Malackowski and Mr. Russell’s expert reports. Nonetheless, both Dr. Schmittlein’s and Dr. Stewart’s testimony and related exhibits are excluded for the other reasons set forth herein.

G. Motion to Exclude the Testimony of Dr. Schmid Based on Lack of Fit and Validity

Dr. Christopher Schmid is an expert in statistical analysis, proffered by GEH, who provided testimony during the course of trial regarding general statistical principles, general principles of performing clinical studies used to evaluate efficacy and safety of drugs, and evaluation and statistical analysis of the results from clinical studies. Braceo argues that portions of Dr. Schmid’s testimony (37 T) are inadmissible for failure to fit them to the facts, failing to provide a basis for the testimony at trial or in reports, and having no valid scientific basis. For the reasons below, the Court finds that Dr. Schmid’s generalized testimony was not properly fit to the statistical analysis of studies used in this case, and that his opinions of hypothetical abstract statistical analysis cannot be used to attack particular ads and studies, which were not addressed directly in his testimony. This prevented Braceo from being able to cross examine the witness about specific studies and the specific circumstances of each one, which Defendants

*451

seek to undermine through generalized testimony.

First, Braceo asserts that Dr. Schmid’s testimony on general statistics (37 T 84-104) and his comparison of results from single arms of different clinical trials (37 T 137-139) was never related to the facts of this case and thus there is no fit with the “particular disputed factual issues in the case.”

Milanowicz v. Raymond Corp.,

148 F.Supp.2d 525, 530-31 (D.N.J.2001) (quoting

In re Paoli R.R. Yard PCB Litig.,

35 F.3d 717, 741-43 (3d Cir.1994)). In particular, in response to Bracco’s objections on these grounds (37 T 100) and its attempt to cross-examine Dr. Schmid and relate his testimony to the facts (37 T 139-150), GEH itself objected, stopped Bracco’s objections and cross-examination, and admitted that its strategy was to not relate Dr. Schmid’s testimony to any particular study or ad offered into evidence by Braceo, but merely to testify as to the unreliability of comparing single arms of different clinical trials. (37 T 100-101,139-150). Braceo asserts that such testimony is inadmissible as a matter of law.

See Fed.R.Evid.

702

{e.g.,

expert “may testify ... if ... (3) the witness has applied the principles and methods reliably to the facts in the case”);

Paol%

35 F.3d at 742-43 .

Daubert

explains that “[flit is not always obvious, and scientific validity for one purpose is not necessarily scientific validity for other, unrelated purposes.”

Daubert,

509 U.S. at 591 , 113 S.Ct. 2786 . Braceo argues that GEH and Dr. Schmid never related these opinions and conclusions to any facts during trial, and that they should not be permitted to provide such a linkage solely through attorney argument in post-trial briefing. The Court agrees.

Second, Braceo argues that Dr. Schmid’s very limited testimony concerning the NE-PHRIC study (37 T 104-132), is inadmissible because he gave no basis for it in either his reports or at trial. GEH claimed that the testimony was necessitated by testimony from Bracco’s witness, Dr. Solomon, five months earlier, when he testified that the 25% secondary endpoint of the NEPHRIC study led to an opposite conclusion to the study’s primary end point as opposed to an inconsistent conclusion to the study’s primary end point. (37 T 123-126). GEH was permitted to ask a question specifically tailored to that new testimony regarding an “opposite conclusion,” which was not precisely the language used in Dr. Soloman’s expert report,

{e.g.,

37 T 126-132). Braceo argues that Dr. Schmid did not review the NEPHRIC statistical plan, statistical report, study data or the study report and he did not talk to the NEPHRIC investigators or read their testimony, thus asserting that Dr. Schmid’s testimony regarding this issue lacks a proper foundation. However, the Court will allow his testimony regarding this very limited issue because he is an expert qualified in the field of biostatistics, his testimony distinguishing the difference between what an “inconsistent” secondary end point as opposed to an “opposite” secondary end point means does not require an additional factual foundation than that to which he had access.

Third, Braceo argues that Dr. Schmid’s testimony on confidence intervals must be excluded as unreliable because it was in disagreement with the vast weight of scientific knowledge. Rule 702

{e.g.,

expert “may testify ... if ... (2) the testimony is the product of reliable principles and methods”). Braceo argues that in connection with confidence intervals, Dr. Schmid admitted that even though he was giving hypothetical examples, they were incorrect (37 T 94). He testified using examples showing that confidence intervals for certain values were symmetric around a value, when such symmetry is impossible (37 T 91-96). The Court agrees that his testi

*452

mony was unreliable and will strike this testimony.

Lastly, Braceo argues that in connection with p-values, despite having no support in his reports, Dr. Schmid several times testified that the 0.05 p-value test for statistical significance was not grounded in solid science (37 T 98 (“It’s just tradition ... ”); 37 T 140 (“done for traditional purposes”)). Braceo contends that those statements are incorrect as a general matter and that it is also incorrect in the specific clinical studies in issue in this case, including the Chalmers study, the NEPHRIC study, the VALOR study, and in every other instance of import in this case, where the expert clinicians, editors and statisticians explicitly chose, on a prospective basis, the 0.05 p-value as appropriate for determining whether any difference was likely due to chance or not. Braceo states that Dr. Schmid’s post hoc analysis violates the rules and underlying rationale for performing scientific analysis in a prospective, unbiased manner and that such testimony, (i.e., 37 T 132, 134-135), based on flawed methodology and flawed assumptions should be excluded. See

Total Containment, Inc. v. Dayco Prods., Inc.,

No. 1997-6013, 2001 WL 1167506 , at *4-5 (E.D.Pa. Sept. 6, 2001);

JMJ Enters. v. Via Veneto Italian Ice, Inc.,

No. 97-0625, 1998 WL 175888 , at *8-10 (E.D. Pa. April 15, 1998);

In re Med Diversified, Inc.,

334 B.R. 89, 100 (E.D.N.Y.2005);

Lippe v. Bairnco Corp.,

288 B.R. 678, 701 (S.D.N.Y.2005), aff’d, 99 Fed.Appx. 274 (2d Cir.2004);

Club Car, Inc. v. Club Car (Quebec) Imp., Inc.,

362 F.3d 775, 780 (11th Cir.2004), (striking of testimony based on flawed methodology that was unaccepted in the accounting community). The Court agrees — Dr. Schmid is a qualified bio-statistician — but his testimony regarding the use of the p-value is not properly based upon science and is not reliable. The basis for his opinions and conclusions on this issue will therefore be excluded by the Court.

H. Motion to Exclude Dr. Ericksen’s Testimony as Inadmissible

Dr. Eugene P. Ericksen, proffered by GEH, is an expert in statistical analysis and a special consultant with NERA Economic Consulting. He gave testimony during the course of trial and designed a survey to determine the impact of marketing pieces shown and distributed by Braceo to physicians. Braceo contends that Dr. Ericksen’s testimony (35 T) and related GEH survey (D326), ostensibly relating to a Braceo brochure and letter, were flawed in several respects, such that they render his opinions and testimony unreliable, lacking fit and otherwise of no help to the Court. Braceo incorporates its related motion in limine (D.I. 393) and identifies the alleged flaws as follows: (1) the survey used three cropped and out of context snippets taken from a Braceo brochure (D2014) and a letter sent to doctors (D3); (2) the survey used the three snippets orally over the telephone despite the uncontested fact that the documents (and the snippets) were meant to be read (not heard) and handled and thus the survey did not in any way simulate marketplace conditions, as again Dr. Ericksen admitted (35 T 211-212, 215, 217-218); (3) certain of the survey questions misrepresented the snippet used

(e.g.,

parentheses in question 16 were not communicated thereby changing its meaning) (35 T 159-161, 181-182, 228-232); and (4) counsel for GEH chose the snippets that were tested and helped design the survey, demonstrating its lack of probative value and Dr. Ericksen’s failure to provide objective and reliable analysis and testimony (35 T 222).

As to Bracco’s first contention, the survey withheld from the respondents large amounts of other essential visual, contextu

*453

al and informational portions from the two documents that directly relate to the survey questions, as Dr. Ericksen admitted. (35 T 225-237; D2014

(e.g.,

withheld graphs and portions showing differences in patient populations); D3

(e.g.,

withheld Kay paper, six bullet points and the descriptions of the studies and patients)). The Court finds that the survey results thus have no probative value as to whether there was false or misleading advertising or the effect of any advertising on a customer, and as such, the Ericksen testimony is excluded.

235

As to Bracco’s second contention, the problem of presenting the material orally as opposed to in writing does present a problem, but only because all three snippets are difficult to understand when heard orally (35 T 157-160) and more appropriate internet-based or other methods were available but not used (35 T 212-214, 217-218). Thus, Braceo argues that the survey has no probative value.

236

The Court agrees.

Bracco’s third contention is that certain of the survey questions misrepresented the snippet used

(e.g.,

parentheses in question 16 were not communicated thereby changing its meaning (35 T 159-161, 181-182, 228-232); questions 14, 14al, 14b, 14c asked about a study “comparison” divorced from the snippet and thus asked for the respondents’ own comparison (35 T 178-179, 180, 245-246)) and suggested answers

(e.g.,

initial questions focused respondents on high risk, CIN and different information about the Kay and NEPHRIC articles and included suggestive preambles (35 T 154-156, 237-239, 243

This text is long and has been trimmed here. Open the source document for the complete record.