AMENDED OPINION
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
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
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
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
• 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
• 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,
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
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
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.
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.
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
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.
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
• 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
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,
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
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
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.
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
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
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
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
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
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
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 burdendue 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.
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
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:
• 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
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
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
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
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
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;
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(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
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
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,
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
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
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.
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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
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
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.
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.
Together,
Daubert
and Rule 702 impose three requirements for admissibility of expert testimony: “qualification, reliability, and fit.”
Calhoun v. Yamaha Motor Corp.,
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
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.,
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.,
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.,
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.’ ”
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,
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,
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.,
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.,
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.
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.,
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,
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
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
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
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,
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
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,
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.,
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
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.,
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
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,
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
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, 243-247); prefaces to questions 13 and 15 provided non-objective opinions (D326)), rendering the survey unreliable, inconclusive and lacking fit to the facts in issue — i.e., whether ads were false or misleading. Again, the Court concurs.
Fourth, Braceo contends that Dr. Erick-sen’s lack of objectivity was also confirmed by how he interpreted his results (e.g., without justification he leapt from responses to questions about “any input into the decisions made about which contrast agents to use” to the conclusion that “the physicians were responsible for the selection” and the physicians were the persons who “made these decisions” (35 T 150-154, 215-216)) and the wording of critical questions that were asked (e.g., a snippet said “similar populations” but the respondents’ answer choices were limited to “same,” “different,” or “did not know,” in contravention of proper survey practice (35 T 165-167,169-170,196); he illogically asked doctors who had no input in decisions for patients how the snippets would change their input in decisions for patients (35 T 202)). 237
V. Conclusions of Law A. Bracco’s Case in Chief
1. False Advertising Claims Under the Lanham Act or New Jersey State Law
This case is based upon a claim for false advertising, and thus, the Court’s analysis must begin with Section 43(a)(1)(B) of the Lanham Act which provides in relevant part:
(a)(1) Any person who, on or in connection with any goods or services ... uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any ... false or misleading description of fact, or false or misleading representation of fact, which- ... (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her ... goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(B). A Lanham Act plaintiff must prove that: “(1) that the defendant has made false or misleading statements as to his own product [or another’s]; (2) that there is actual deception or at least a tendency to deceive a substantial portion of the intended audience; (3) that the deception is material in that it is likely to influence purchasing decisions; (4) that the advertised goods traveled in interstate commerce; and (5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc.” Warner-Lambert Co. v. BreathAsure, Inc.,
Furthermore, unfair competition claims under New Jersey statutory and common law generally parallel those under § 43(a) of the Lanham Act.
Buying For The Home, LLC v. Humble Abode, LLC,
2. Commercial Advertising Under the Lanham Act
The initial determination of whether a form of speech is actionable commercial speech is not always a simple question. The Court must begin its inquiry with the Supreme Court’s jurisprudence in connection with the First Amendment and its application to different types of representations. As the Supreme Court stated in
Bolger v. Youngs Drug Products Corp.,
[T]he First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content. With respect to noncommercial speech, this Court has sustained content-based restrictions only in the most extraordinary circumstances. By contrast, regulation of commercial speech based on content is less problematic. In light of the greater potential for deception or confusion in the context of certain advertising messages, content-based restrictions on commercial speech may be permissible.
Bolger,
In
City of Cincinnati v. Discovery Network, Inc.,
recognized the difficulty of drawing bright lines that will clearly cabin commercial speech in a distinct category. While the Court noted that it has often described the core notion of commercial speech as speech which does no more than propose a commercial transaction, it noted that it has also identified a somewhat larger category of commercial speech' — that is, expression related solely to the economic interests of the speaker and its audience. Neither definition may prove particularly helpful in a particular case ... [thus,] a broader and more nuanced inquiry may be required. [R]ather than simply applying bright-line rules, [courts must examine] restrictions on speech carefully to ensure that speech deserving of greater constitutional protection is not inadvertently suppressed.
Gordon & Breach Science Publishers v. Am. Inst. of Physics,
The seminal case on the application of the Lanham Act is
G & B.
In
G & B,
Judge Sand held that the Lanham Act prohibits only those false or misleading statements made in “commercial advertising [and] promotion.”
G & B,
The Lanham Act does not define “advertising” or “promotion.” However, courts have held that commercial advertising or promotion consists of four elements: (1) commercial speech; (2) by a defendant in commercial competition with the plaintiff; (3) for the purpose of influencing customers to buy the defendant’s goods or services; and (4) disseminated sufficiently to the relevant purchasing public to constitute “advertising” or “promotion” within the industry.
Eli Lilly & Co.,
Accordingly, although the Lanham Act only applies to “commercial advertising and promotion,”
G & B
and its progeny establish that the definition of commercial speech applies to more than just the typical type of advertising.
Semco, Inc. v. Amcast, Inc.,
a. Scientific Articles Published in Peer Reviewed Journals are not Commercial Speech
Defendants contend that published scientific articles, such as NEPHRIC and COURT, are protected by the First Amendment and are not actionable under the Lanham Act, regardless of the extent of their dissemination by a commercial entity; and furthermore, that published scientific research is protected even if it contains incorrect statements or erroneous conclusions. The Court finds that there is an abundance of case law to support the proposition that a scientific article is protected noncommercial speech despite the potential for erroneous content.
See, e.g., Bd. of Trs. of Leland Stanford Junior Univ. v. Sullivan,
Plaintiff relies on
Semco
for the proposition that “disseminating study results
(e.g.,
journal articles) to promote products is commercial speech that has no constitutional protection to the extent it is false or misleading.” (Pl.’s COL ¶ 4). In
Semco,
the court held that when the author of a published article is the president of the company that manufactures a product which is featured in the article, and the article contains favorably false information about the product, that the initial publication of the article is actionable under the Lanham Act against the manufacturing company.
However, as stated above, the Supreme Court’s broadest definition for commercial speech is an “expression related solely to the economic interests of the speaker and its audience.”
Discovery Network, Inc.,
Furthermore, the Court finds that it would be inappropriate to “inquire into the validity of ... scientific theories” which are not commercial speech and promulgated in scientific journals. Thus, it declines to do so today.
238
Oxycal,
The conclusion we reach here is supported by a consideration of the chilling effect on speech in the academic and non-profit context that could be the result of allowing actions such as this toproceed. This case dangerously juxtaposes academic speech, the health of which depends crucially on “that robust exchange of ideas which discovers truth ‘out of a multitude of tongues’,” Keyishian v. Board of Regents, 385 U.S. 589 , 603,87 S.Ct. 675 ,17 L.Ed.2d 629 (1967)-with commercial speech, regarding which the Court has said “[t]he government may ban forms of communication more likely to deceive the public than to inform it.” Central Hudson Gas & Electric Corp. v. Public Service Comm’n,447 U.S. 557 , 563,100 S.Ct. 2343 ,65 L.Ed.2d 341 (1980).
G & B,
b. Secondary Dissemination of Scientific Articles and Their Findings do Constitute Commercial Speech
Plaintiff argues that even if the NEPHRIC article itself is not considered commercial speech, that the secondary dissemination of the article in Defendants’ advertisements does constitute actionable commercial speech. To support this contention, Plaintiff relies on
Washington Legal Found, v. Friedman,
In
Washington Legal Found.,
the court began its analysis by noting that: “It is beyond dispute that when considered outside of the context of manufacturer promotion of their drug products, CME seminars, peer-reviewed medical journal articles and commercially-available medical textbooks merit the highest degree of constitutional protection. Scientific and academic speech reside at the core of the First Amendment.”
Id.
at 62;
see, e.g., Keyishian,
Nonetheless, the court recognized that “[t]he peculiarities of the prescription drug industry make dissemination of scientific research results an especially important and prevalent marketing tool.”
Washington Legal Found.,
That fact, combined with the considerable financial resources available to pharmaceutical companies, means that findings concluding that a drug effectively treats a condition is more likely to reach a physician than studies reaching the opposite conclusion. Therefore, physicians could be led to believe that a certain drug is safe and effective because a manufacturer has found, and aggressively promoted, “the one” article that supports use of their drug, even if there exists considerable evidence to the contrary.
Id. This reasoning led the court in Washington Legal Found, to depart from the rigorous standard of review generally demanded by the First Amendment.
In
G & B,
the court also held that secondary distribution of scientific research articles could constitute actionable conduct under the Lanham Act if it is found to be false or misleading.
G & B,
These are allegations of activities explicitly promotional in nature: distribution of survey results favoring defendants’ products to an audience that represents the core consumers of those products. These activities clearly fall closer to Section 43(a)’s reach than does mere publication of the articles. They may properly be described as “commercial speech that a competitor employs for the express purpose of influencing consumers to buy [its] goods or services,” or as “speech proposing a commercial transaction,”
Id. at 1544 (citation omitted). Thus, here again, the court concluded that secondary dissemination of a fully protected article can constitute a violation of the Lanham Act if false or misleading. Accordingly, because GEH’s advertising campaign using the NEPHRIC article is clearly promotional in nature, similar to the advertising in G & B and Washington Legal Found the Court finds that Defendants’ secondary distribution of the NEPHRIC article does constitute a form of commercial speech.
i. Internal Company Documents That Were Never Publicly Disseminated in the United States Are Not Actionable
At the outset, the Court notes that internal documents such as marketing plans and medical bulletins do not constitute “commercial advertising or promotion” because they are not disseminated to consumers, much less disseminated to a sufficient portion of the relevant purchasing public so as to constitute “advertising” or “promotion” within the industry, under the four element test promulgated by the court in G & B.
ii. Accused Oral Statements Allegedly Made by GEH Sales Representatives are Actionable Under the Lanham Act
GEH avers that the evidence presented at trial demonstrated that GEH sales call notes are, at best, “brief shorthand” notes that do not reflect verbatim statements made by sales representatives. (28 T 153:12-21;
see also
18 T 38:25-41:19). GEH further argues that Braceo
“Courts have consistently held that oral statements by a company’s sales representative concerning a product constitute ‘commercial advertising or promotion’ under the Lanham Act.”
Zeneca Inc. v. Eli Lilly & Co.,
No. 99-1452,
Second, to constitute “commercial advertising or promotion,” challenged oral statements “must be disseminated sufficiently to the relevant purchasing public to constitute advertising or promotion within that industry.”
Seven-Up,
Here, GEH contends that the number of statements at issue is too small to be actionable.
See Procter & Gamble Pharms. v. Hoffmann-LaRoche Inc.,
No. 06-0034,
Conversely, Braceo relies on
Florida Breckenridge, Inc. v. Solvay Pharm., Inc.,
No. 97-8417,
The Court finds
Florida Breckenridge, Inc.
to be more analogous to the present case than the cases relied on by GEH because here the sales call notes were not made in isolation and were part of a large
GEH also contends that a good faith effort by a company to educate its sales force about what can fairly be said about published studies, such as GEH’s training of the sales force and approval process for its promotional materials, renders any limited false or misleading statements made by representatives outside of those parameters not actionable.
Procter & Gamble,
iii. Website Ads, Print Ads in Newspapers, Magazines and Journals, Television Ads are Actionable Commercial Speech
Courts have applied the Lanham Act to just about every imaginable print and media form, including press releases, print ads, posters, and websites.
See, e.g., Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
iv. Other Accused Materials as “Commercial Advertising or Promotion”
Braceo failed to adduce evidence that a Visipaque “protocol” was created or posted by GEH. Any such “protocol” is not “commercial advertising or promotion” because it was not sufficiently disseminated, if at all, to the relevant purchasing group or intended to influence purchasing decisions. However, CMEs sponsored by GEH are “commercial advertising or promotion,” because although they are purportedly designed for educating the medical community and not influencing potential customers to buy goods or services, here they have been designed by GEH to deliver a specific message related to Visipaque renal superiority.
See Neurotron,
Another example of a GEH-sponsored CME, presented at least in part by GEH consultants, (Drs. McCullough and Davidson) states the following: “[Rjecent controlled trials have shown that
non-ionic Isosmolar contrast agents are superior 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). This particular CME has the GEH logo on the first slide of the presentation and was presented, in part, by doctors who were paid consultants for GEH.
(See
P4251). Therefore, the Court finds that under the test promulgated in
G & B,
certain CMEs at issue in this case do in fact constitute commercial speech. This is strikingly similar to the circumstances in
Semco,
where the Court found the article at issue to be commercial advertising because the author was a biased member of the company selling the product for which the article touted superiority.
Semco,
3. GEH’S Representations are False and Misleading Under the Lanham Act
“Liability [under the Lanham Act] arises if the commercial message or statement is either (1) literally false or (2) literally true or ambiguous, but has the tendency to deceive consumers.”
Novartis Consumer Health,
a. Puffery
Under the Lanham Act, nonspecific statements that do not refer to specific characteristics of a product are non actionable puffery.
See Nikkal Indus., Ltd. v. Salton, Inc.,
In addition, false claims are not excused or remedied by the use of footnotes because “a footnote or disclaimer that ‘purports to change the apparent meaning of the claims and render them literally truthful, but which is so inconspicuously located or in such fine print that readers tend to overlook it, will not remedy the misleading nature of the claims.”
SmithKline Beecham Consumer Healthcare, L.P. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
Moreover, GEH’s claims, which have significant safety implications (Pl.’s FOF ¶ 87, n. 88), are not excused by any allegations that Braceo has unclean hands. GEH asserts that Braceo has unclean hands because it is allegedly inflating its damages claim beyond all reason, and engaging in its own alleged campaign of false advertising against Omnipaque.
(See
Answer ¶¶ 96-101). The Court notes that such a defense is rarely successful due to “a strong public interest in the prevention of misleading advertisements.”
Am. Home Prods. Corp.,
c. Literal Falsity
In Novartis, the Third Circuit clearly set out the framework for making a determination of literal falsity:
In analyzing whether an advertisement or product name is literally false, a court must determine, first, the unambiguous claims made by the advertisement or product name, and second, whether those claims are false. Clorox Co. v. Proctor & Gamble Commercial Co.,228 F.3d 24 , 34 (1st Cir.2000). A “literally false” message may be either explicit or “conveyed by necessary implication when, considering the advertisement in its entirety, the audience would recognize the claim as readily as if it had been explicitly stated.” Regardless, only an unambiguous message can be literally false. “The greater the degree to which a message relies upon the viewer or consumer to integrate its components and draw the apparent conclusion, however, the less likely it is that a finding of literal falsity will be supported.” United Indus. Corp. v. Clorox Co.,140 F.3d 1175 , 1181 (8th Cir.1998); see WarnerLambert Co. v. BreathAsure, Inc.,204 F.3d 87 , 96 (3d Cir.2000); Castrol,987 F.2d at 946 ; see also Cuisinarts, Inc. v. Robot-Coupe Int’l Corp., [No. 81-731,]1982 WL 121559 , at *2 (S.D.N.Y. June 9, 1982).
Novartis,
GEH’s non-renal superiority claims can be categorized into the following messages: (1) cardiovascular superiority, (a) Visipaque causes lower incidence of MACE than LOCM;
244
(b) Visipaque causes less discomfort-type (i.e., claiming less pain, warmth, discomfort or patient movement or designed for such);
245
(2) osmosali
Second, the Court must determine if the unambiguous statements are literally false. The type of proof needed to prove literal falsity varies with the type of advertising claim being made.
Novartis,
Braceo contends that GEH’s renal representations (Pl.’s FOF ¶¶ 2-9) and non-renal representations (PL’s FOF ¶¶ 18-22) for Visipaque are establishment claims that either explicitly or implicitly reference tests, data, charts, and clinical trials and/or use terms such as “proven” or “establish.”
See, e.g., Glaxosmithkline Consumer Healthcare, L.P. v. Merix Pharm. Corp.,
No. 05-898,
Braceo further contends that GEH has made a claim in its advertising that “Visipaque is better than all LOOM,” and that this statement is literally false and unsupported by the findings of the NEPHRIC study.
(See
PL’s FOF ¶¶ 10-17, 23-39). In the alternative, Braceo asserts that the studies upon which GEH based its representations are unreliable (including NE-PHRIC, COURT, and VICC) and are contradicted by the weight of the pertinent
Nonetheless, despite the Court’s finding that NEPHRIC, COURT and VICC are reliable regarding their conclusions as to the administration of CM alone, the Court finds that the articles are not reliable for the assertion that “Visipaque is better than (or superior) to LOCM with prophylactics.” This conclusion is simply not adequately supported by any studies, as discussed supra, pp. 407-17.
i. Impact of FDA on Standard for Determining Literal Falsity
Braceo contends that the falsity of the claims is further confirmed by the findings of the FDA. (Pl.’s FOF ¶¶ 11, 24, 31, 37). The “FDCA or FDA regulations may be utilized in a Lanham Act action to ‘establish the standard or duty which defendants allegedly failed to meet.’ ”
Genderm Corp. v. Biozone Labs.,
No. 92-2533,
Courts have likewise rejected arguments that would require them to second-guess the expert judgment of the FDA.
See, e.g., Thompson Med. Co. v. Ciba-Geigy Corp.,
Furthermore, Braceo asserts that the FDA’s failure to take action against GEH and its ads is irrelevant because (a) GEH never proved that it sent its ads to the FDA; (b) courts consistently refuse to infer agency adoption based on mere inaction
(Providence Journal Co. v. United States Dep’t of the Army,
However, the Court finds those cases to be inapposite because here the Court is not seeking to usurp the FDA’s authority or preempt its findings in an ongoing investigation. Furthermore, the Court finds the circumstances in
Zeneca,
as opposed to the cases cited by GEH, to be more analogous to this case. There, the court addressed the issue of an ongoing dialogue with the FDA regarding a peer reviewed
Eli Lilly also suggests that the dialogue with the FDA is still ongoing and that the findings and opinions set forth in the January 1999 minutes with respect to MORE, and the May 1999 minutes with respect to MORE and CORE, do not reflect the agency’s last word on the subject or are an incorrect recitation of the FDA’s position. This argument is contradicted by the FDA’s repeated statements over a two-year period. And whether or not the dialogue is ongoing, the FDA has made abundantly clear that MORE-either alone or in conjunction with CORE does not and cannot prove that Evista reduces the risk of breast cancer.
Zeneca,
Nonetheless, the Court notes that Braceo cannot prove falsity simply by relying on statements made in FDA letters that apply FDA standards. A Lanham Act plaintiff must do more than assert that the challenged claims “are inadequately substantiated under FDA guidelines; the plaintiff must also show that the claims are literally false or misleading to the public.”
Sandoz,
1. The Conclusions of the NEPHRIC Study as Reported in the New England Journal of Medicine
To begin, the Court will discuss the relevance of the NEPHRIC study to determine if GEH’s claims that “Visipaque is better than all LOCM,” “Visipaque may be better than a LOCM,” and “Visipaque is as good as or better than a LOCM with prophylactics” are supported by NE-PHRIC’s conclusions or whether the representations are unsupported by the study conclusions, thus making them literally false. The NEPHRIC study reported in the NEJM, (P2467), only compared Visipaque to Omnipaque, not Visipaque to all LOCM (or Isovue). Braceo avers that, because the NEPHRIC study only compares Omnipaque to Visipaque, GEH’s claims that “Visipaque is better than all LOCM” is not a conclusion of the study and that the claim that “Visipaque is better than a LOCM” is only true for Omnipaque, and thus, does not apply to Isovue or any other LOCM since no other LOCM was the subject of the study. Braceo further avers that the NEPHRIC study did not even test the use of a LOCM with prophylactics, and therefore, does not support a claim that Visipaque is as good as or better than a LOCM with prophylactics.
2. The NEPHRIC Study
Braceo asserts, in the alternative, that even if GEH’s representations are supported by the conclusions of the NE-PHRIC study, the study itself was unreliable and is undermined by other scientific studies supporting a determination of literal falsity for GEH’s superiority claims. Braceo began its attack on the NEPHRIC study by presenting testimony which it claims establishes that NEPHRIC was not designed to test whether osmolality is responsible for CIN, (20 T 6) and that its conclusions were never repeated in an adequate and well-controlled study. 251 In addition, Braceo also contends that NE-PHRIC provided no support for the claim that Visipaque is as good as or better than a LOCM with prophylactics and does not represent the weight of the scientific evidence. {See, e.g., P2467; 3 T 89-90). 252 Dr. Solomon testified, and GEH did not rebut, 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 the studies. (3 T 126-131; P3148, P37, P2053, P2386, P2390). Braceo states that Table IV is also inaccurate and misleading because it does not report the contradictory results of GEH’s internal data, which were not reported in the NE-PHRIC study. 253
The NEPHRIC study was a head-to-head study between Omnipaque and Visipaque, albeit not Visipaque and all, or even more than one LOCM, but the study does go through some analysis as to why such results may apply across all LOCM. Therefore, the Court concludes that while GEH cannot rely on NEPHRIC to advertise that Visipaque performs better than all LOCM, it can redistribute the NE-PHRIC article as long as it is clear in the advertising that the study was ahead-to-head comparison, using Omnipaque and Visipaque, not any other LOCM or all LOCM. Not surprisingly, the FDA agrees that NEPHRIC cannot support a statement that Visipaque is renally superior to all LOCM. (P1894).
As to whether the NEPHRIC article’s conclusion, “the use of iodixanol alone may eliminate many of the effects or logistic problems created when prophylactic pharmacologic regimens are used,” is unsupported by its results is a more involved inquiry. The NEPHRIC study did not test any LOCM with prophylactics, but the conclusion stops short of stating the proposition that iso-osmolar contrast mediums will be more effective than nonionic lowosmolar contrast mediums with prophylactics in preventing CIN. The article merely
ii. FDA’s Input on the NE-PHRIC Study is Persuasive Evidence of its Unreliability For Renal Superiority Claim as to All LOCM
The Court finds persuasive that GEH’s primary endpoint in the NEPHRIC study, mean peak change, was rejected as a meaningful or reliable measure by the FDA and GEH’s Dr. Feldman. (Pl.’s FOF ¶¶ 11, 13). This lends credence to the Court’s finding that NEPHRIC cannot reliably support GEH’s Visipaque renal superiority claim and thus prevents GEH from using the NEPHRIC article as a reliable means to support its claim of renal superiority over all LOCM.
See, e.g., Abbott Lab. v. Mead Johnson & Co.,
No. 91-202,
Furthermore, Braceo asserts that the FDA’s explicit rejection of GEH’s claims and the NEPHRIC study as reliable (on at least two occasions), is highly persuasive evidence entitled to significant deference regarding the falsity of GEH’s claims. See, e.g.,
Zeneca,
3. GEH’s Renal, Cardiovascular, Discomfort-type and Class and Cost Claims for Visipaque and Omnipaque Are Literally False Because GEH’s Ads Omit Critical Information That Goes Toward Limitations of its Overly Broad Claims
Moreover, Braceo contends that GEH’s renal, cardiovascular, discomfort-type and class and cost claims for Visipaque and Omnipaque all omit critical test results and data that demonstrate limitations of the data. (Pl.’s FOF ¶¶ 10-17, 23-39). Braceo asserts that because such claims are based on selective and unreliable data, while ignoring relevant, contradictory data, they are literally false establishment claims.
See, e.g., SmithKline Beecham Consumer Healthcare v. Johnson & Johnson-Merck Consumer Pharma.,
No. 01-2775,
In this Opinion, the Court has found that there is limited or no support for certain of GEH’s non-renal claims that (a) Visipaque causes lower incidence of MACE than LOCM; (b) Visipaque causes less discomfort (i.e., claiming less pain, warmth, discomfort or patient movement or designed for such) than LOCM; and (c) Visipaque performs better than LOCM because of lower osmosality and associated costs. With regard to cardiovascular superiority, the Court concludes that there is sufficient support in the VICC trial to support the claim that Visipaque causes less MACE than Isovue for patients undergoing PCI within the initial 48 hours after the procedure, however there is insufficient support in the proffered studies to make a claim that Visipaque has superi- or hemodynamic effects over LOCM. As to discomfort, the Court finds that GEH’s claims of Visipaque comfort superiority to LOCM are supported, but only as to peripheral angiography procedures, and thus, GEH’s broad assertions of superior patient comfort are not supported by the conclusions of the various studies it uses to bolster them; any such advertising must be limited to the procedures and circumstances that were used in the studies. Finally, as to a cost superiority claim, the only support for such a claim is to associate the cost of treating additional instances of MACE and CIN to higher overall cost; 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 in the circumstances defined herein.
Braceo contends, in the alternative, that even if the Court determines that GEH’s representations regarding the renal and non-renal superiority of Visipaque are literally true that the representations are still false by implication
(e.g.,
“Visipaque is better than a LOCM”, which implies that it is better than Isovue). “Where a plaintiff cannot show that a claim is literally false under the Lanham Act, it must show that the advertisement conveyed an impliedly false message that was misleading to consumers.”
AstraZeneca,
where the advertisements are not literally false, see PPX Enterprises v. Audiofidelity Enterprises,818 F.2d 266 , 272 (2d Cir.1987), plaintiff bears the burden of proving actual deception by a preponderance of the evidence. Hence, it cannot obtain relief by arguing how consumers could react; it must show how consumers actually do react.
Sandoz,
In addition, even if the claims were not literally false, Braceo alleges that they are still misleading, as shown by: (a) the Rappeport survey;
Merisant Co. v. McNeil Nutritionals, LLC,
a. Presumption of Deception
Many courts, including the Third Circuit, impose a rebuttable presumption of customer deception when there is a finding of literal false advertising.
See, e.g., Castrol,
b. Dissemination of Allegedly False Message to Substantial Portion of the Intended Audience
GEH’s sales call records are admissible as business records, as GEH has agreed, and are highly probative of what GEH’s sales representatives communicated. While some of the records are fragments of communications, based on their content, the records show that the sales representatives disseminated both false renal and non-renal claims. Braceo relies on Mr. Russell’s expert testimony that at least 87% of GEH representatives documented delivery of false and/or misleading messages and at least 82.5% of substantive calls overall are “on message.” As discussed
supra,
the Court found these percentages to be grossly inflated. Nonetheless, GEH did disseminate false renal and non-renal messages to the market. Customers were exposed to the claims through various channels
(e.g.,
sales representatives, meetings, CME’s, press releases, and websites). The claims from the differ
Therefore, the evidence of GEH’s sales and marketing efforts demonstrates that GEH management used market research and experience to craft the claims that would have the most impact on customers (Pl.’s FOF ¶ 4), told the sales representatives to disseminate the claims (Pl.’s FOF ¶ 5), the sales representatives disseminated the claims, as recorded in print ads, sales call records, emails and other records (Pl.’s FOF ¶¶ 6-9, 18-22), and that some of these claims were false. GEH’s print media and CME-type presentations also disseminated its false claims.
5. The Accused Materials Were Material in That They Were Likely to Influence Purchasing Decisions
Braceo maintains that there is overwhelming evidence
(e.g.,
PL’s FOF ¶ 42), that GEH’s false and misleading claims of superior safety are material to customers. “The materiality inquiry ‘focuses on whether the false or misleading statement is likely to make a difference to purchasers.’ ”
Labware v. Thermo Labsystems, Inc.,
No. 04-2545,
The type of evidence needed to prove materiality ... varies depending on what type of recovery the plaintiff seeks. Plaintiffs looking to recover monetary damages for false or misleading advertising that is not literally false must prove actual deception. See Balance Dynamics Corp. v. Schmitt Ind.,204 F.3d 683 , 690 (6th Cir.2000); [Resource Developers, Inc., v. Statue of Liberty-Ellis Island Foundation, Inc.,926 F.2d 134 , 139 (2d Cir.1991) ]. Plaintiffs attempting to prove actual deception have to produce evidence of actual consumer reaction to the challenged advertising or surveys showing that a substantial number of consumers were actually misled by the advertisements. See, e.g., PPX Enters., Inc. v. Audiofidelity Enters., Inc.,818 F.2d 266 , 271 (2d Cir.1987) (“Actual consumer confusion often is demonstrated through the use of direct evidence, e.g., testimony from members of the buying public, as well as through circumstantial evidence, e.g., consumer surveys or consumer reaction tests.”)
Plaintiffs seeking injunctive relief must prove that defendant’s representations “have a tendency to deceive consumers.” Balance Dynamics,204 F.3d 683 at 690; see also Resource Developers,926 F.2d at 139 ; Blue Dane Simmental Corp. v. American Simmental Assoc.,178 F.3d 1035 , 1042-43 (8th Cir.1999); Black Hills Jewelry Mfg. Co. v. Gold Rush, Inc.,633 F.2d 746 , 753 (8th Cir.1980); 4 McCarthy on Trademark and Unfair Competition § 27:36 (4th ed.)
Pizza Hut, Inc. v. Papa John’s Int’l, Inc.,
6. Injunctive Relief
Under the Lanham Act, an injunction is a “usual and standard remedy” and “the common historical practice has been that a prevailing plaintiff in a case of ... false advertising will ordinarily receive injunctive relief of some kind.” 5 J. Thomas McCarthy, Trademarks & Unfair Competition § 30:1 (4th ed.2006);
Lermer Germany GmbH v. Lermer Corp.,
In deciding whether to grant a permanent injunction, the district court must consider whether: (1) the moving party has shown actual success on the merits; (2) the moving party will be irreparably injured by the denial of injunctive relief; (3) the granting of the permanent injunction will result in even greater harm to the defendant; and (4) the injunction would be in the public interest.
Gucci America, Inc. v. Daffy’s Inc.,
Here, the Court is the fact-finder, and has found that GEH’s conduct is in violation of the Lanham Act; accordingly, Braceo has demonstrated actual success of the merits and in turn, irreparable injury. (Pl.’s FOF ¶ 88);
Citizens Fin. Group,
Also, as far as corrective action, the Court orders the following: GEH to issue a press release, including on its website, regarding this Court’s decision and the placement of corrective ads. Corrective advertising is appropriate when, as here, a defendant is making false claims about its product that bear on the public health.
See, e.g., Abbott,
7. Damages under the Lanham Act
Having already determined that an injunction is appropriate in this case, the Court next decides whether monetary damages should be awarded; § 35(a) of the Lanham Act provides that the plaintiff shall be entitled to recover damages in an action
subject to the principles of equity, [including] (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.
15 U.S.C. § 1117(a). District courts have broad discretion to fashion monetary relief under § 35(a).
See, e.g., Banjo Buddies, Inc. v. Renosky,
In Lanham Act eases, the causation standard for an award of damages is higher than the general standard for injunctive relief:
[C]ases involving injunctive relief and those seeking monetary damages under the Lanham Act have different standards of proof. A plaintiff suing to enjoin conduct that violates the Lanham Act need not prove specific damage. In contrast, courts require a heightened level of proof of injury in order to recover money damages.
Porous Media Corp. v. Pall Corp.,
An advertisement or promotion is harmful if there is a likelihood of injury to the plaintiff in the form of declining sales, loss of good will, and the like.
Warner-Lambert,
Other courts have noted that, in limited circumstances, literally false advertising, by raising a presumption of consumer deception, may support a finding of a causal nexus between defendant’s misconduct and plaintiffs injuries.
See, e.g., EFCO Corp. v. Symons Corp.,
a. Willfulness
Braceo must first establish willfulness before entitlement to a presumption of causation and harm.
See Castrol Inc.,
In the context of a false advertising claim under the Lanham Act, “ ‘willfulness’ and ‘bad faith’ require a connection between a defendant’s awareness of its competitors and its actions at those competitors’ expense.” ALPO Petfoods, Inc. v. Ralston Purina Co., 913 F.2d 958 , 966 (D.C.Cir.1990). “Voluntary, knowing and intentional misconduct” is considered an indicator of willfulness. See Castrol Inc.,169 F.Supp.2d at 341 .
Callaway,
In this case, Braceo implores the Court to find that GEH’s commission of false advertising (Pl.’s FOF ¶¶ 83-87) is willful, thus creating a rebuttable presumption of causation and harm. Albeit the Court finds that some accused claims were false or misleading, the Court does not find that GEH’s actions rise to the level of willfulness. Particularly, in
Calla-way,
cited by Braceo, the court found willful conduct when the defendant continued to disseminate ads with claims of superiority of its golf ball product line over all other competitor golf ball product lines on tour, when its own tests showed that a competitor’s golf ball product line on tour was superior.
Also convincing is GEH’s reliance on its inter-department approval process for promotional materials. Specifically, as discussed
supra
p. 427, GEH identified four levels of internal mechanisms that reviewed prospective promotional materials to ensure consistency with clinical data. Although this Court finds some of the messages approved by this process are literally false, the fact that these materials were subject to extensive review militates against a finding of willfulness. Indeed, Mr. Scott Kerachsky, Director of Marketing for GEH Healthcare, testified that when reviewing prospective promotional materials with respect to NEPHRIC from the marketing department’s prospective, he considered possible issues with the
In addition, in contrast to the clearly willful conduct in Callaway, here there were no studies that adequately and reliably demonstrated a LOCM’s superiority over Visipaque. Rather, there were studies supporting a particular claim of Visipaque superiority over at least a LOCM (e.g.-—Omnipaque, Hexabrix, and in VICC, Isovue). Simply put, Braceo has failed to present sufficient evidence to prove that GEH’s actions were willful. As such, the Court has no basis to find that GEH knowingly or willfully disseminated false or misleading information.
In finding that GEH’s conduct was not willful, the Court notes that Braceo may still be entitled to disgorgement of GEH’s profits if it can satisfy the other five factors set forth in
Banjo Buddies.
For disgorgement of profits, a plaintiff has the burden of proving that such a remedy is warranted.
Castrol Inc.,
The Third Circuit weighs five nonexclusive factors in determining a Lanham Act plaintiffs entitlement to disgorgement: “(1) whether the defendant had the intent to confuse or deceive; (2) whether sales have been diverted; (3) the adequacy of other remedies (such as injunctive relief or compensatory damages); (4) any unreasonable delay by the plaintiff in asserting its rights; and (5) the public interest in making the misconduct unprofitable.”
257
Banjo Buddies,
In weighing
Banjo Buddies’
five relevant factors for determining whether disgorgement is appropriate, the Court here finds an award of disgorgement inequitable. First, GEH’s actions were not willful or deliberate-the creation of confusion and deception among customers due to GEH’s advertising campaign was based on scientific studies and articles that had limited applicability, and furthermore, no scientific studies have explicitly found the
As to the third factor, the Court concludes that other remedies, i.e., injunctive relief and compensatory damages for past and future advertising costs on Bracco’s behalf to clarify the advertising claims, are adequate and can make the Plaintiff in this case whole without the exceptional remedy of disgorgement. Fourth, Braceo did not delay in asserting its rights; it responded to GEH’s 2003 campaign immediately by contacting GEH and the FDA, and filed suit soon thereafter (December 2003). Finally, while strong public policies exist to make false advertising unprofitable, deter false statements about drug safety, encourage disclosure of drug safety data, and deter inflated drug prices based on false clinical claims, in this case, the Court finds that deterrence alone is not a supportable rationale for disgorgement, especially in light of the fact that GEH’s violative conduct is not willful.
See Tamko Roofing,
b. Bracco’s Lost Profits on the GPO Contracts
Absent a presumption of causation, under § 35(a)(2) Braceo is entitled to damages for its lost profits only if it shows that GEH’s misconduct was a material factor (also called a “substantial” factor) in Braceo’s losses. “In order to prove causation under ... the Lanham Act, the aggrieved party must demonstrate that the false advertisement actually harmed its business.”
Cashmere,
The Third Circuit has also addressed the analogous issue of whether an “advertising injury” was “caused” by an insured’s alleged false advertising:
Courts that reason that the injury could have taken place without the advertising ... are misstating the relevant tort liability principles, which ask whether the advertising did in fact contribute materially to the injury.
Travelers,
One way for a plaintiff to prove causation for damages under § 35(a)(2) is to show diversion of customers.
Resorts Intern., Inc. v. Greate Bay Hotel and Casino, Inc.,
Diversion of sales can be proven either through direct or circumstantial evidence.
See EFCO,
Braceo first asserts that a causal link also can be shown by a “commonsense” inference that the false statements at issue would damage plaintiffs sales. For example, the First Circuit approved a “district court’s commonsense inference that the sale of cashmere-blend coats which overstated their cashmere content could cause a loss of sales of cashmere-blend coats which correctly stated their cashmere content.”
Cashmere,
Simply put, Braceo has not met its burden of establishing causation. Indeed, the First Circuit’s reasoning in
Cashmere
follows that of the Fifth Circuit’s in
SeverirUp,
which this Court finds compelling. Specifically, the Fifth Circuit held that proof of an adverse purchasing decision which followed in chronology the alleged false advertising does not prove that the adverse purchasing decision was a result of the alleged false advertising.
Seven-Up,
In attempting to prove causation, Braceo has identified several forms of evidence, (emails, expert testimony, and various internal GEH documents), in support of its claim of false advertising. As discussed at length, supra, this Court finds that GEH’s false advertising was not a material or substantial factor in the Novation, Consorta, and Kaiser GPO contract awards. Even Bracco’s most compelling evidence— emails of conversations with GPO members containing false information and slides presented to GPO members containing false information — does not meet Bracco’s burden of showing that it was GEH’s false advertising and not the GPOs’ independent evaluation of the various scientific studies which caused the loss of the contracts. Although the record shows that Visipaque is considered to be a unique and innovative product throughout the CM industry, this product differentiation does not mean that the view was based on GEH’s false advertising; in fact, most of GEH’s Visipaque advertising campaign disseminated messages that were not false, and were based on studies that the Court finds to be reliable. In sum, Braceo presented evidence, at best, showing certain false information was presented to GPO members, but it fails to demonstrate the impact of that information on the members, let alone that it was the substantial reason the contracts were awarded to GEH.
Furthermore, GEH has proffered countervailing reasons, amply supported by testimony and other evidence at trial, why the GPO contracts were awarded to GEH.
See Id.
(“We have previously rejected inferences of causation based solely on the chronology of events, where the record contains undisputed testimony to the contrary or other equally credible theories of causation.”) (string citation omitted). Importantly, with respect to the Novation contract, the Court has found that the Novation TF likely based its evaluation of GEH’s bid on personal experience, feedback from physician colleagues, clinical information and the existing strong positive relationship Novation had with GEH at the time.
See supra,
p. 428-29. Even Braceo candidly conceded that it was extremely unlikely that Novation would award a contract to another supplier.
Id.
There are also various reasons why Consorta ultimately awarded the bid to GEH. Notably, Consorta conducted its own clinical trials, which contributed to its decision to award the contract to GEH. In addition, Consorta was not only dissatisfied with the low clinical acceptance of Bracco’s MRI product, ProHance, Consorta was also dissuaded by its belief that Braceo acted unethically during the bidding process.
See supra,
pp. 431-35. The Kaiser contract was also awarded to GEH for similar reasons. Indeed, GEH has held a sole source agreement with Kaiser for the supply of x-ray CM since 1993, and with GEH’s competitive pricing and favorable relationship with Kaiser, it is not a surprise that GEH received the bid regardless of its Visipaque
The Court also finds that Braceo has not carried its burden of proving causation for an award of damages under § 35(a)(2) through evidence that GEH’s false claims diverted sales from Braceo to GEH or caused GEH to win bids from large accounts (and Braceo to lose bids). 262 As stated above, the relevant inquiry is whether the advertising did in fact contribute materially to the injury. Here, the Court finds that Braceo has not shown that GEH’s false advertising was a material factor in both GEH’s gains and Bracco’s losses. Thus, the Court cannot apply the Account Specific approach to damages, because Braceo has not proved a sufficient causal link between the false messages and the decisions to award the GPO contracts. More importantly, as the Court has found, there were many other factors involved in the bidding process that were credible theories of causation, which influenced the award of GPO contracts to GEH. Likewise, given the substantial number of true messages relating to Visipaque, based on NEPHPJC, VICC and other studies, it is inappropriate to use the Sales Trend Approach since Braceo, through Mr. Malackowski, has failed to adequately distinguish between the impact of the true messages from the false messages. 263 Indeed, given that Braceo and GEH almost exclusively controlled the market in this arena, any losses in Bracco’s sales would presumably be GEH’s gain. Not surprisingly, Visipaque sales increased after the NEPHRIC study was published. Braceo leaves the Court conjecturing the extent of the sales trend reflecting GEH’s false advertising as opposed to the publication of NEHPRIC in the widely respected NEJM, as well as GEH’s true messages taken from NE-PHRIC and other articles. Without such showing, Braceo is not entitled to lost profits. (Pl.’s FOF ¶¶ 43-73).
As a final note, since the Court declines to award disgorgement of profits it is not necessary to make a damages calculation in connection with its award. Nevertheless, GEH has proven its costs with respect to Visipaque, Omniscan, and Omnipaque sales. If disgorgement were to be awarded, these costs must be subtracted. 15 U.S.C. § 1117(a); (see also Def.’s FOF ¶¶ 173-74).
c. Bracco’s Lost Profits Excluding the GPO Contracts
Similarly, Mr. Malackowski’s testimony failed to adequately distinguish between the revenue generated by the GOP contracts and sales of Visipaque to individual doctors and hospitals. In fact, Mr. Malackowski testified that with regard to the
d. Quantifying Bracco’s Lost Profit Damages
When quantifying lost profits under the Lanham Act, the Court may “make a just and reasonable estimate of the damage based on relevant data” and “act upon probable and inferential, as well as direct and positive, proof.”
BASF,
e. Braceo Has Proven It Had the Capacity to Accommodate the Additional Sales for Which it Claims Lost Profits
GEH also asserts that even if Braceo can establish lost profits, that it may only
f. Bracco’s “Future” (i.e., Post-Injunction) Damages
The standard for proving future lost profits is the same as the standard for proving profits already lost.
See Am. Speedy Printing Ctrs. v. AM Mktg., Inc.,
8. Bracco’s Responsive Advertising And Clinical Costs
Under § 35(a)(2), a plaintiff may recover costs incurred for corrective advertising and other damage control expenses incurred in response to a defendant’s wrongful conduct.
See, e.g., U-Haul,
Having already determined that some of GEH’s advertisements were literally false, the first factor is satisfied because the Court applies the presumption of deception and, as such, logically, the consumers were likely confused. Next, GEH argues in a conclusory manner that Bracco’s corrective advertising is false and tortious itself, and has not adequately been proven to be linked to alleged false advertising on the part of GEH. GEH has not presented sufficient evidence to substantiate its claim that there is no connection between Bracco’s corrective advertising and GEH’s false advertising. Indeed, Braceo presented testimony of its damages expert, Mr. Malackowski, to show that the expenses spent on corrective advertising were related to the release of the NE-PHRIC study and its false promotion by
In light of the foregoing, Braceo is entitled to $11,376,500 for corrective advertising performed in response to GE’s wrongful conduct ($6,144,000 for 2003 to 2006, $2,182,500 for 2007-June 2008, and $3,050,000 to correct remaining post-injunction misperceptions). (18 T 130-131; 19 T 87-95; P2432, 2434, 2802, 2803, 2699, 4271:tabs33-5). However, the Court finds that Braceo is not entitled to clinical study expenses allegedly incurred to refute GE’s false claims because such studies are undertaken as a regular cost of business in the healthcare industry and the Court does not find it equitable to award such costs. (18 T 130-131; 19 T 93, 176-178; P2881, 4271:tab36; D609).
9. Attorneys’ Fees
Section 35(a) of the Lanham Act provides: “The court in exceptional cases may award reasonable attorneys’ fees to the prevailing party.” 15 U.S.C. § 1117(a). A finding that a case is exceptional requires two steps: (1) culpable conduct by the non-prevailing party during the Lanham Act violation or the litigation
(e.g.
— bad faith, fraud, malice, knowing infringement or willfulness), and (2) a determination by the Court that the circumstances justify altering the general American rule that parties to litigation pay their own attorneys fees
(e.g.
— closeness of liability, damages suffered by plaintiff).
Green v. Fornario,
B. GEH’s Counterclaim
a. Bracco’s Advertisements were Literally False
GEH alleges that Braceo has disseminated ads in violation of 43(a) of the Lanham Act and New Jersey State Law.
b. Injunctive Relief
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. The Court has already found that the eomplained-of advertisements were literally false,
see supra,
in violation of the Lanham Act; however, a showing of literal falsity alone does not entitle the injured party to injunctive relief. Although GEH argues there is a reasonable expectation that Braceo will disseminate the “abandoned” false ads in the future, nonetheless, the Court’s findings regarding NEPHRIC and those messages disseminated by GEH that constitute false advertising foreclose the mere possibility that Braceo will reprise their allegedly false advertising.
See, e.g., Reader’s Digest Ass’n, Inc. v. Conservative Digest, Inc.,
VI. Conclusion
For the reasons stated herein, the Court finds that certain of GEH’s advertisements
. Braceo contends that GEH ads overextended their conclusions to low risk and no risk patients. (See, e.g., P1832; P1716; P1008:279). However, the Court disagrees and finds that GEH's ads properly focused on "at risk” patients.
. At trial, GEH relied on a proposed theory, that iso-osmolar agents produce no free radicals in the body, to try to support its claims. GEH's theory is proven false by the CIN caused by Visipaque, and when NAC and sodium bicarbonate, which act by reducing free radicals, were found to reduce CIN from Visipaque (P2650, P3949). Stated differently, if GEH’s theory were correct, Visipaque would cause no CIN and NAC and sodium bicarbonate should have no effect with Visipaque. Of course, an unproven (and much disputed) theory can never support an establishment or superiority claim. The undisputed evidence is that the actual mechanism for the cause of CIN is still not known.
Notes
. Since this was a bench, not a jury, trial, the parties agreed to forego pre-trial Rule 104 hearings and instead permit the experts to appear once at trial and that the Court could rule on the Daubert motions in its findings of fact and conclusions of law-after hearing the testimony. See infra Section III.
. See, e.g., GEH’s Vice President of Sales, Mr. Donald J. Quinn, testified that statements like "Visipaque is safer renally than other LOCM” would only be made in the context of a clinical paper, making them establishment claims. (7 T 206-211).
. See also the testimony of Peters, Quinn, Gehris, Kerachsky, Vitti, Murray and Russell describing the claims and the plans. Other descriptions of the claims and plans starting in 2003 (PI7, P19, P866, P1579, P340, P341, P854, P855, P856, P857, P1163) and other reports (P417, P792, P1004, P1010, PI 155, PI 169, P1362, P1365, 1436:635, P616, P1449, P1450, P1584) are all consistent. Plans prior to 2003 describe the same type of establishment and superiority claim strategy since the product launch in 1996: P2111-13, P2097, P1441, P875, P877, P1648.
.For example, P2027:853-7 and P2026:8537 identify some of the tools and the claims (e.g., "Visipaque has highest safety profile”) to be made from them. Additional instructions to deliver the claims are: P398, P399 (first page), P419, P424, P603, P634, P635, P645, P678, P688, P690-2, P694A, P711, P714, P770, P789, P798, PI 164, P1249, P1250, P1373, P1388, PI424, P1692, P1714, P1715, P1934, P2025, P2034, P4247, P4249, P42635; 16 T 34-39, 41-42, 48-51, 56, 132-134, 136-139; POA's for GPO’s: P451, 452, 623, 625, 626, 630, 680, 684, 709, 732, 788, 1363, 1718.
. See also P1450:112, 4180:pl4, 410:966, 141:486, 3089B:710, 2508:763A, 4163:763A, 2505:756A, 4155A:736, 4160:756A, 2506:758A, 4161:758A, 3448A:pl, 2956:734, 779:698-99, 1013:792-93, 782:897, 254:863, 3168A:408, 4089:510, 55:825, 1363:745, 2506:759A, 2511D:783A, 416L759A, 4166D:783A, 333:745, 3089A:702, 4089:440, 142:507, 2304:p3, 2300:p3, 729:013, 50:772. Braceo also includes the New England Journal of Medicine (“NEPHRIC”) article (P2467, P4176) and the Journal of the American College of Cardiology (“RECOVER”) article by McCullough, et al. (P3807) as false promotions.
. Additional emails and memoranda: P693:396, 415:126, 707:679, 3709:402, 436A:435, 2730:066: 2520:907A, 2529:411.1; 16 T 99-114.
.Additional sales call records are P3689L-1, P3689M-1, P3493F, P3434, P3437. P3689H, L, M and P3493, all exhibits that were attachments to Mr. Russell’s expert reports and contain Mr. Russell's initial analysis of GEH’s sales call records. P4049 is Mr. Russell's final sales call analysis of GEH’s combined sales call records (P2312 & 3682), being entered into the record on a laptop computer— the only way the exhibit is viewable, and was provided to the Court and GEH on June 12, 2007. Before then, Mr. Russell removed ambiguous sales calls from the on-message calls in P4049, including seven of the eleven GEH cross-examined Mr. Russell on at trial. P3493F: Omni/35994, 79270 (duplicate Visi/ 153580 removed); P3493G: Omni/54842, 14153; P3493K: Omni/17593, 32829, 12243. Mr. Russell testified why the remaining four were on-message calls. (18 T 34-38). However, the Court finds that his testimony as to on-message calls is not reliable and therefore is excluded. See infra pp. 423, 440-41.
. Braceo submitted a laptop as exhibit P4049 with Concordance search software and a database representing Mr. Russell's final sales call analysis. GEH objected to the admission
. See also P2671:521, P527, P383L619, P621, P624, P629-630, P632, P634, P636-38, P640, P4251:203, P209, P211-12, P2307:p21, P2281:p7, 9, 53, P2282:p49, P3455:pl2-13, 16-17, 22, 26, P3512:pl2-13, 16-17, 22, 26, P3619:924, P2157:151, P3834:915, 932, P3647:355, P3890:241, 246.
. The most significant GEH efforts in issue are those concerning CT, GEH’s focus, in delivering the allegedly false claims. (8 T 178-180; 13 T 87; 17 T 80-81, 85-89; 15 T 161-162, 166-167; 20 T 15; P410, P419, P527, P772, P854, P855, P869, P1008:279, P1169, P1401, P1733, P2098). CT uses i.v. administration of CM where there are less safety risks, but GEH used i.a. administration studies in its CT claims, (e.g., PI733:481, P410; 17 T 81, 85-89; 34 T 83-84, 2 T 61-62).
. By FDA standards, such a study must be a randomized, double blinded, prospective (e.g., follow a pre-designed protocol), head-to-head comparison that is adequate and well-controlled. (E.g., Care (P4076)).
. 30 T 139:17-140:16, 145:20-147:12.
. 30 T 172:14-22; 37 T 102:11-21; Harrison T 12:17-13:2; 5 T 85:7-13.
. 37 T 104:3-13.
. D249 at A450900.
. See generally, 30 T 189:3-9; 11 T 93:4-21.
. For example, a p-value of 0.06 represents a roughly 94% probability (1 minus 0.06 = 0.94 or 94%) that the two treatments are different. See generally, 30 T 185-186.
. 30 T 87:18-88:18, 88:25-89:21; 1 T 184:13-23.
. 10 T 117:25-121:8.
. 10 T 21:21-24, 144:19-146:13; 30 T 95:6-96:13, 101:5-15, 103:13-104:24; 1 T 185:19-186:25; 4 T 64:3-65:9; D107 at B476793; P3039 at B781784; Spinazzi, 9/06 T 63:3-65:21; D594atl.
. 10 T 47:6-17, 146:15-147:14; 30 T 104:19-106:7; 32 T 216:2-25.
. 10 T 14:13-15:8; 30 T 107:21-109:25, 112:6-114:20; 3 T 89:10-15; D98A at 553; D94 at 492; D2392 at 1-2.
. 30 T 112:6-115:2; 20 T 217:1-6; D2392 at 1-2; D904 at B149234.
. 30 T 116:23-117:11; D2392 at 2.
. 30 T 116:14-19; 4 T 85:10-86:11, 100:13-101:15.
. 10 T 124:11-125:11; 30 T 123:23-125:5; D2268 at Table 3; 1 T 130:17-23; 4 T 105:25-106:20; D2269 at 386-87.
. D1411-T at B266402.
. 30 T 110:16-111:10, 194:10-196:4; 31 T 111:8-112:1.
. Spinazzi 09/06 T 56:10-60:14; D594 at 1-2; D236 at 9.
. D228A, 30 T 133:25-134:16.
. D228A at Table 2, 30 T 136:4-9; 37 T 133:18-21, 134:15-135:2; 32 T 96:3-98:19.
. D94, D894; 30 T 136:22-137:12, 138:15-139:7; 3 T 88:12-23, 102:15-22.
. D94; D894 at 2; 10 T 9:11-17.
. Id.
. 10 T 8:5-8; 18:8-17; 130:14-131:14.
. D94 at 493-95; D894 at A322520; 10 T 153:16-155:17; P 1526 at A292614; 30 T 176:17-177:5, 184:18-186:15, 187:13-191:5; 3 T 90:3-23.
. 10 T 17:5-17, 76:18-77:20, 81:18-85:22, 87:1-14, 133:9-14; 20 T 6:2-17, 33:17-34:1.
. D94; 10 T 76:18-77:1, 80:2-20, 132:20-133:14.
. D94 at 498; 10 T 77:24-78:23, 80:2-23; 30 T 194:10-195:17.
. D1990; 31 T 4:20-5:15.
. D1990 at 926-27, Figure 2; 31 T 27:11-28:2; 4 T 74:10-14, 75:8-76:10.
. D1990 at FN on 924; 31 T 6:12-20.
. D2381 at 1669; D 421 at 1669; D839 at 32A; 31 T 34:20-25, 38:22-39:12, 42:9-45:7, 57:5-58:1.
. P4047; 3 T 156:21-158:1.
. P4047 at abstract; 3 T 156:21-158:1.
. 31 T 48:10-25, 53:17-54:25; 34 T 33:5-36:12.
. D265A; 34 T 28:22-30:24.
. D265A at Figure 2, Table 4; 34 T 40:3-47:4, 49:6-50:18; 31 T 51:2-12, 56:5-12.
. 12 T 54:17-55:14, 57:1-11.
. 20 T 25:18-27:5; P4288 at A456428; P4290 at A456460.
. 20 T 40:6-23, 42:24-45:6; P 224 at A148468-71; P281.
. 20 T 40:6-23, 42:24-45:6.
. 20 T 64:14-19, 73:17-74:3; P4288; P4290.
. P3366 at Rudnick 0026-0027; 3 T 141:16-142:13; 20 T 61:19-63:4, 84:1-7.
. Spinazzi 9/06 T 8:18-23; 3 T 33:4-6; D236.
. D236 at B723074; 3 T 36:8-38:5, 40:3-20, 42:17-21, 45:1-7; Spinazzi 9/06 T 18:14— 19:9; 83:12-84:2.
. P3724; 3 T 45:16-46:2.
. 31 T 90:21-93:7; 94:15-96:2; 21 T 76:5-77:9; D241 atB585169.
. Spinazzi 9/06 T 8:2-23; 21 T 43:12-21; D912.
. P 4076.
. D387 at 2328; D912 at 10, 15; 3 T 166:13-167:14; 4 T 85:10-14; 31 T 59:23-60:22, 67:2-68:2, 69:15-70:24, 74:13-77:25; D2102 at 18; 4 T 109:8-110:23; D2298 at B089532-33; 21 T 50:18-54:13.
. D387 at 2333; 31 T 79:12-80:6.
. 4 T 98:22-103:6; 31 T 85:20-86:14, 87:16-23.
. 31 T 61:9-63:5, 84:16-85:5, 102:12-103:21; P 2556 at B367123 (Sharma discussing "confounding effect of drug pre-medication’’); 21 T 37:3-39:2.
. 20 T 219:23-228:1; D594; D1864 at B412842; 21 T 19:15-22:17, 30:20-33:6, 35:7-12; D 1438 at B404824, B404832; D1356; D1860 at B412734; D262A, 4 T 54:1-55:4.
. D1356, 1595, 1864; 20 T 219:23-228:1; 21 T 30:20-33:6; D1860 at B412734.
. D1356; 20 T 221:22-225:6.
. D1847; 4 T 25:20-29:7, 32:8-40:15; D105 at B272551; 4 T 42:11-44:14.
. 4 T 32:8-40:15, 44:15-53:20; D1847; D1850; P2818.
. Spinazzi 9/06 T 238:21-239:19.
. 11 T 155:18-157:14; 31 T 101:2-102:17, 104:1-106:3, 115:7-21, 124:12-131:18; 32 T 4:16-10:23, 12:3-11, 13:16-17:24.
. 11 T 119:23-123:12, 124:9-126:8.
. D262A at 391; D107 at Table 3; 4 T 69:15-70:1.
. D262A at 391; D107 at Table 3; 4 T 66:20-67:8, 68:3-16; 31 T 121:13-122:14.
. None of the cited studies used pretreatments. P2467:916-7.
. During this litigation, GEH concluded a study called “NEPHRIC II,” in which it compared Visipaque and Isovue head-to-head. The study results are not part of the record in this case and the Court declines to draw an inference, as Braceo requests, that this study showed that Isovue was at least equivalent to Visipaque.
.GEH avers that CIN at seven days is not relevant, but this contention is debated amongst the scientific community. (E.g., P1877:878, P2201:147-48, P1891:286).
. For example, in a 2/21/01 email, the clinical research managers were informed that “we surprisingly see that some patients have max increase in serum creatinine on day 7 (not within day 3 as expected).” P213; 20 T 20-22. Shortly thereafter, GEH amended the protocol to add day 7 and other results as outcomes. P44, 4144. In addition, on 9/13/01, with knowledge of the blinded results, GEH stopped the study early, before the full number of planned patients were enrolled. (11 T 31-33; P130, P550; 20 T 24).
. In addition, if GEH uses the brand name "Visipaque" in its advertising, it must similarly refer to the studied CM, "Omnipaque," by its brand name and not by its clinical reference, iohexol.
. Braceo cites to the following, e.g., 2 T-4 T; Care. (Solomon D.; P4434 (Solomon Dec.); P4076); Impact (P3724); Verow (D528); Carraro (P2361, P3790); Fischbach (P2644); Kolehmainen (P3017); Rao/Newhouse (P2933); Chalmers (P405; D228A); Solomon (P2818); Dr. Allen's "unrebutted" repetition of Solomon and further confirming MA (11 T 82-115); Solomon/DuMouchel (P3167); Sharma (P2556); Dr. Wei's unrebutted MA of GEH data (11 T, 12 T); Kay (P478); Katholi (P3782); Haight (P2362): Briguori I (P2650); Baker (P2626); Rudnick (P3735, 2940); Briguori II (P3003); Sandler and letters to the editor (P49; PI 167); Consensus Panel (P2770); Tepel (P2789); Barrett (P2821); Liss (P2674); Bettman (P2819); CMS/Federal Gov't (P2672:660, P2555:105).
.E.g., VALOR showed no difference and no NAC toxicity (P833, 835, 891, 937, 931, 940, 266, 273 (admits insufficient scientific proof), 15 T 159; 16 T 131-32); Visipaque MA (P1733, no difference in i.v.; 2203:154, no difference in i.v. and other conflicting results); Stevens MA (P1937); ECR MA (P2201:149-150, 2214, 2221, 2229, 2230, 2241); McCullough MA with table with LOCM identified (P2228:943) that was not displayed in final article; Verow CIN data (more CIN with Visipaque than Isovue, 12 T, not reported in P2356); Safety MA (P560); DXVD09 (P566, 567). 1 T-4 T.
. GEH's attempt at trial to cull trends in the data using selective hindsight cannot support its establishment claims that rely on specifically cited studies that used defined levels of statistical significance. (P1894; Pl.’s FOF ¶¶ 3-10,22-24).
. 30 T 156:24-172:9; D894 at A322564; 10 T 91:6-22, 103:7-16, 166:24-167:18; 32 T 139:13-141:4, 142:18-143:22; 33 T 190:1-193:2,219:11-12,223:23-224:5; P 4365; 3T 148:4-22; D904; 4 T 58:20-63:24.
. 10 T 29:10-20, 98:25-100:10, 138:23-141:10, 162:14-163:1; D2223 at 37 (61 patients required in each group, 70 planned to allow for dropouts); D94 at 493 (129 evaluable patients); 11 T 68:2-16.
. D94 at 492; 10 T 133:15-137:13; 3 T 89:10-15; 20 T 76:10-77:7; P208.
. D94 at 497; 30 T 174:12-20; 32 T 194:24-197:1, 199:12-200:8, 201:19-202:1.
. D94 at 493; 10 T 33:10-35:25, 116:18-117:11, 157:9-19; P 551 at 3; P562 at 3; 11 T 45:2-47:15, 48:8-24, 51:11-52:5, 52:13-65:8, 70:3-22; D2339 at 18, 34; D2340 at 2, 23, 42; 20 T 19:2-20:2, 20:20-23:6, 58:11-18, 59:25-61:8; 33 T 158:4-20, 167:9-168:7.
. 11 T 54:25-56:21.
. D2339 at 18, 34; D 2340 at 23, 42.
. 10 T 116:18-117:11, 157:9-19; 11 T 45:2-47:15, 48:8-24, 51:11-52:5, 52:13-54:24; 20 T 19:2-20:2, 20:20-23:6, 58:11-18, 59:25-61:8; 33 T 158:4-20, 167:9-168:7; P551 at 3; P562 at 3.
. D2339 at 18, 34; D2340 at 23, 42.
. D2339 at 18; D2340 at 23.
. Braceo additionally contends that some secondary endpoints were not included in the published article. However, allegedly constrained by word limits, the authors made determinations as to the results to include. 10 T 148:20-149:12, 150:21-156:9; 30 T 190:22-191:5. Nonetheless, not all these secondary endpoints were supportive of the study’s conclusions. D94; 10 T 150:21-153:2; 37 T 132:1-18; 30 T 190:1-13; D894 at A322520.
. P1875 at A32164;10 T 159:5-22; see also P1876; 10 T 75:9-23.
. P1875 at A321641 ("In conclusion, our results reveal a highly important clinical feature that patients at risk for developing CIN might significantly benefit from receiving iodixanol compared to other LOCM”); 10 T 159:5-22.
. 10 T 76:18-83:24.
. P1937; 32 T 18:1-20:24.
. P2193 at A451448.
. See additional examples of plans and instructions for (a) cardiovascular claims (P712, P1681:254, P1689, P2101:566; 7 T 43-52), (b) discomfort-type claims (P869:179, P1136:373, P632:455, P789;276), and (c) class/cost claims (P708:715, P789:275, P1012:720,722; 8 T 165-75).
. See also P216U388-89, P1013:789, P782:890, P779:695, P729:013, P2280:p8, P395:360, P409:948, P1868:137, P2283:pl, P373:070, P4171:pl, P4177:pl, P4089:619, P3654.-508, P2047A.-806, P2166:548, D945:425, P2561:032, P2291:p8, P2298:pll, P410:972, P3649:415, P3649A:415, P3890:246, P2281:p26, 29, P3831:637, P3890:238.2-39, 41, P2670:508, P3828:96768, 976, P3829:032-33, 44, P2156:032-33, 44, P2157:203-04, 237-38, P3831:613-14, P2671:524, P3831:613, P3261:024, P2157:198, P2305:p6, P3U4A:809, P3114B:811, P4089:440„ P453, P510, P142:507, P520, P137:390, P2670:507, P510, P514, P3828:976; D2324:124. Braceo also alleges that the COURT article (P2561) is a false ad or promotion. Additional sales call records are P3689L-2, P3689M-2, P3493G.
. Specifically, Braceo points out: the study report (P2), containing the actual results available to GEH and the investigators, but never made public until the trial, shows that the article misrepresents several critical results, including: (a) the results of the blind and valid adjudications of the data, which showed that the results were due to procedural differences and not to the contrast agents (compare P2561, reporting a statistical difference due to CM, with P2:142-5, reporting no statistical difference due to CM and all statistical differences due to procedures; 19 T 33, 45-47; 23 T 155-157); (b) the fact that the CKMB measurements were unreliable (compare P2561:029) with (P2:127; 19 T 31); and (c) a primary (within 30 day) outcome was falsely reported as a secondary outcome (compare P2561 Table 4 with P2:109-110, 122-23, 25; 19 T 27-30), to minimize the effect of the negative result.
. D903 at 2172-73; 5 T 38:5-39:9; 23 T 32:22-36:16; Harrison T 10:11-17.
. 23 T 28:3-16.
. D903 at 2172; 23 T 28:23-29:14, 31:23-32:8.
. D903 at 2173, Table 3; 23 T 36:17-38:15; 19 T 35:21-36:2.
. 23 T 42:14-25; 19 T 35:21-37:15.
. D903 at 2173; Harrison T 13:4-11; 23 T 39:13-42:3; 5 T 40:8-41:3.
. D903 at 2175; 23 T 43:1-22.
. 5 T 42:14-21.
. 19 T 10:13-11:22, 16:3-16.
. D903 at 2176; 23 T 48:24-52:22; 5 T 111:6-18.
. 23 T 51:23-52:22; 5 T 107:6-11; D1720 at B323667 ("COURT elevated Visipaque over Hexabrix, but still left the monomers below both, in PCI only.”).
. The fact that the VICC study has never been published in its entirety does not bear on this Court's determination of whether VICC is reliable. Nonetheless, an abstract of the VICC trial was presented to the American Heart Association and published in 2003. P362; 5 T 55:7-12. While the manuscript was submitted for publication to the journal Circulation, following comments, it was never re-submitted. 23 T 67:15-19; 23 T 68:19-24.
. P3632; 23 T 66:19-67:12; 5 T 45:9-22, 46:5-13.
. Harrison T 8:2-7.
. P3632; 23 T 59:22-60:19, 70:19-23; D2437 at Davidson 001507.
. 33 T 6:3-14; D2440.
. D1433 at B365439 ("it was decided to sponsor the study to have more leverage and control in case of questionable results.”); 33 T 14:16-17:22, 30:2-5, 34:8-35:16; D2424 at B416880-81.
. P3632, D2437 at Davidson 001513-14, D1296 at B002475; 23 T 76:17-77:1.
. D1296 at B002500; 23 T 74:10-12, 74:19-76:16.
. 5 T 120:13-121:22; Harrison T 47:21-23, 49:3-10; 23 T 75:22-76:16; D1956 at B404402 ("The investigators believed in the clinical significance of CK-MB elevations ... but not of critical elevations of troponins ...”); 33 T 73:17-75:7, 75:22-25, 76:12-77:8, 78:9-78:18.
. P3632; 5 T 47:25-48:17; D2437 at Davidson 001535; 23 T 76:17-77:24; Harrison T 20:9-19.
. 23 T 77:25-78:14; P 3632; D2437 at Davidson 001508; Harrison T 73:21-24; 37 T 135:10-137:9.
. Harrison T 80:23-81:18.
. 23 T 37:5-11, 79:11-80:23; D2437 at Davidson 001523.
. 5 T 54:19-22; 23 T 78:15-80:24.
. 23 T 76:17-77:24, 85:3-9; P3632; D2437 at Davidson 001517-18; 5 T 47:23-48:17.
. 23 T 77:14-24, 78:8-14; 33 T 37:20-38:3; P3632; D2437 at Davidson 001517-18; Harrison T 73:21-74:5.
. 23 T 80:25-81:15.
. 23 T 80:25-81:15; 85:10-21.
. Harrison T 91:9-94:13; see also 23 T 81:16-83:16.
. P3632; 5 T 55:7-14, 111:19-22; 71:22-24.
. 5 T 111:23-112:14.
. 33 T 22:4-23:17, 25:9-26:7, 50:6-54:4; 55:18-62:23; 66:5-19; D 173; D 1433 at B365440; D 1439 at B408147,49-50; D 1823; D 1879 at B377869; D 1955; D 2105; D 2438; D 2439 at B401684.
. D812; 23 T 55:2-56:4.
. 23 T 58:13-59:7.
. D814 at 314; 23 T 85:25-88:4; 91:2-92:3; P28 at 93 (abstract conclusion); P2193 at A451436 ("some effects such as hypotension and tachycardia, are clearly related to hypertonicity.”); P3028 at B781498; P3846 at 370 (conclusion); P 3852 at 614 (abstract conclusion).
. D2249; D2377; 5 T 107:6-11; 23 T 88:5-92:3.
. See also D945:430, P141:490, P2505:757A, P2511A:774A, P4155A:737, P4160:757A, P4166A:774A, P446:640-41, P729:013, P2280:pl0, P395:362, P409:950, P3118A:865; P1868:134, P147, P161, P3448A:p2, P3114E:837, P2279:p5, 7, P3114G:856, P2157:214, P2161:388, P2183:980, P2184:998, P2311:p5, P2170A:739, P2170B:743, P3118B:863, P4236:716, P2171:751, P4243:241, P389:011, P779:695, P782:890, P1013:789, P2287:pl, P2288:pl, P2289:p3, P2293:pl, P2295:pl, P2296:pl, P2297:pl, P2284:p2, P374:073, P375:074, P3828:930, P3261:3012, P3829:037, P2156:037; D2334:p3, D4089:453, D142:520, D137:390. Additional sales call records are P3689L-3, P3689M-3, P3493H.
. Dr. Katzberg showed that the studies by Manke (P3845), Verow (P3853), Justesen (P3843), Pugh (P3848), Manninen (P3846), Conroy (P848), Sundgren (P3851), Tveit (P3852), Fishbach (P2644), Klow (P3844) and Palmers (P3847) showed no efficacy differences, and therefore no patient movement (or significant pain and discomfort that would affect movement and efficacy) differences between Visipaque and LOCM. (E.g., 2 X 91-105). GEH presented no rebuttal.
. 29 T 81:19-84:8, 127:17-128:23, 164:20-165:20, D2264 at 12 (left column); D519 at 208 (conclusion).
. 29 T 86:21-87:2, 88:13-90:9; D2264; D511; 29 T 98:19-99:24; D197; 29 T 100:20-102:14; D519; 29 T 102:15-104:4; D2248; 29 T 104:25-107:5; D 2261; 29 X 107:6-109:17; D2271; 29 X 109:18-111:1; D517; 29 X 111:2-113:18; D527; 29 T 113:19-115:11; D785A; 29 T 116:24-117:24; 2 X 178:12-15; 3X11:11-18.
. 29 X 127:17-128:23, 164:17-165:20.
. 2X 174:14-19.
. D1623; 3X5:13-6:18.
. 2X 178:12-15; 3 T 11:11-18.
. On cross-examination, Dr. Nicholson admitted he did not consider the significant viscosity and hydrophilicity differences between the drugs, entitling his testimony to little weight. 29 T 54,181-182. He also admitted that many of the differences he had noted were actually not statistically significant, many of the differences only related to heat sensation (and not pain or discomfort), that he failed to reveal other data in favor of the LOOM (e.g., D527, 785A), and in all of the remaining studies the dose of Visipaque was much less than the dose of the comparison drug, which would necessarily lead to less pain and discomfort (studies show the higher the dose, the more the heat, pain or discomfort). 29 T 160-184. GEH’s proofs did not generally relate to the studies cited in the claims and even when they arguably did, they did not and could not support the claims.
. See also P390:125, P612:171, P2286:p5, P2300:p4, P137:384, P1450:108, P4180:pll, P2956:721, P2290:pl, P1448:899, P2962:234, P2298:p3, P2291:p6, P1868:156, P410:963, P2309, P1013:789, P782:890, P779:695, P2292:pl, P3831:638, P2307:p48, P425D203,209, P383D591, P2281:p30,46, P2307:pl8, P3828:927, P3829:987,992, P3890:238.1, P2156:987,992, P2157:059, 063, 077, 197-98, 213, P267D522, 28, P326D023, 050, 053, P4247H79, P3834:924, P3709:402, P333:731, P775:350, P415H26, P1598:887, P766:281, P2730:066, P2291:p4-5, 12, P1363:744,P 436A:443, P2298:p27,36, P374:073, PI868:153, P333:749, P267D523. Additional sales call records are P3689L-4, P3689M-4, P3493I, P3493L, P3435, P3689L-5, P3689M5, P3493J.
. D2169; 3 T 16:3-5; P2818; 4 T 70:9-71:16; 5 T 111:6-18; 78:17-23; 3 T 11:11-18.
. In this regard, Braceo also asserts that GEH’s Omnipaque claims are false. First, GEH obscures the fact that Omnipaque is a comparator in NEPHRIC (e.g., P1534; 6 T 99-101), by referring to it by its generic name, (16 T 70-71). In addition, GEH falsely promotes Omnipaque as "The Gold Standard,” established by clinical studies as "minimizing risk,” "optimizing image quality,” and "maximizing cost efficiency,” without any support and with contradictory clinical evidence, as shown above. (E.g., P3946, 1559:003). However, the Court finds that GEH’s designation of Omnipaque as the "Gold Standard” is merely inactionable puffery.
. 18 T 19:3-15; P 2285.
. 18 T 7:21-10:2.
. 18 T 10:7-11:4; P 2303.
. 18 T 11:16-18:15; P3710; P 2283.
. 18 T 22:3-25:4; P2285; P 2297.
. P390 at A221124, 129, 130, 132; 17 T 132:13-135:13, 138:5-14.
. 18 T 26:2-7, 29:7-16.
. D2004.
. 18 T 33:22-34:4.
. 18 T 33:1-6.
. 18 T 34:5-41:18; P3493-F at 74, 228; 18 T 41:21-43:19; P3493-G at 4, 8; 18 T 44:2-46:18; P3493-Kat3, 5, 7.
. 18 T 33:1-6; 33:22-46:18.
. 18 T 27:2-46:18.
. P3493 F-L; P3689L-M.
. 8 T 122-123, 136-46, 177-178; 9 T 51-53, 128-130; 16 T 80-81; 7 T 156-157; P1365:776, 781, 1175:485, 100, 101, 104, 105, 106, 1021, 1004:042-3, 691, 694A.
. 8 T 82-84, 99-100; 9 T 6-9, 86-88; P849:943, 869:167,177, 2101:558-9, 2098:437, 1163:533, 1169:702.
. 16 T 81-95, 8-9, 71-75. See also P400, 418, 387:433-34, 1608:074-5.
. 8 T 144, 125-126, 168; P849:937, 480:667. Visipaque is priced 2-3 times higher than Isovue. 18 T 124-125; P2070, 1912, 2687, 2715, 4271:tabsl9-20.
. P854:937. See also 8 T 105, 162-167, 18 T 144; P869:180, 1362:720, 1012:719-22,711-6, 1178:677-80, 1341:467, 659, 785.
. P2098:426-429,437-40,442-3,446, 869:167-8,172-4,177,180,187-8, 854:931-9, 942-6,950-1, 2098:442, 2101:536,558-9; 16 T 46-48; PI 145, 1147, 1265, 1266, 1269, 1584:788,790, 2112:779, 1677:102, 875:287, 2008, 1312, 1579:261-62,269; 15 T 170-176;
. Mr. Peters did not “remember anything out of the ordinary” besides NEPHRIC contributing to Visipaque's growth. 6 T 72.
. P696; 9 T 35-36. See also 13 T 27-28, 55-60; 15 T 181-184; P1716:739, 1742:968-71, 196:573-580, 1700:821, 1400:059-62.
. P849:940 (“Visipaque penetration must be expanded significantly in competitive accounts especially in order to leverage it in a way that can pull through additional Amersham Health products”),879,994-5 (“Expand Visipaque usage, especially in competitive accounts so that it can be effectively leveraged to pull through other Amersham Health products”). See also P1341:469 ("Visipaque pricing should be used as a lever ... If Visipaque is highly penetrated based on clinical superiority, this offers the highest level of competitive immunity”),473, 483, 642:558, 650:683, 721, 1327, 693:396, 1420:648,650, 1679:161,-170-1, 3493K (GEH sales call records regarding Visipaque Leverage), 1941:746; 8 T 117— 122 (Quinn); 17 T 110-112 (Russell); 21 T 117-122 (Medici); 18 X 125-127, 143 (Malackowski); 38 T 81-87 (Stewart); P1676:088.
. Mr. Sweeney, Novation’s second in command with overall responsibility for the bid, was deposed as Novation's Rule 30(b)(6) wit
. P4085 at Bracco/Nov 000103; 36 T 176:4-24.
. Sweeney T 96:25-99:22; P 4135 at Bracco/Nov 003620; Sweeney T 29:1-30:22, 32:12-33:6, 51:22-52:1, 66:6-67:15, 73:2-8, 84:6-85:7, 88:1-89:1; 36 T 176:25-180:22.
. P4094 at Bracco/Nov 3419, 3421-3435; P 4097; Sweeney T 298:23-300:3; 36 T 184:19-185:13.
. Sweeney T 300:5-301:19; P 4085 at Bracco/Nov 000102; P4097; 36 T 180:23-181:21, 184:2-186:12.
. P4132 at Bracco/Nov 003612; P 4085 at Bracco/Nov 000102; P4097; see also P4095.
. Sweeney T 300:25-301:19, 229:14-25, 302:3-20; 36 T 194:8-15.
. Sweeney T 301:16-19, 67:5-15, 132:25-133:17, 140:18-141:7, 164:12-165:20.
. Sweeney T 302:15-18; see also 36 T 193:18-194:7.
. Sweeney T 140:18-141:7, 301:21-302:1.
. Sweeney T 64:21-65:21, 213:10-15, 281:5-21, 293:21-295:1, 307:15-308:1, 311:17-19, 322:12-19; see also 36 T 180:25-181:21, 183:16-192:2.
. P 4083; P4084; P4085 at Bracco/Nov 000103; Sweeney T 295:3-12, 73:14-20, 92:24-93:6, 100:19-102:9,; 36 T 163:24-164:22, 195:1-198:5.
. Sweeney T 32:7-14, 75:4-22.
. Sweeney T 74:4-15, 75:10-13.
. P 4085 at Bracco/Nov 000103; P 4083 at Bracco/Nov 000094, Sweeney T 233:13-23, 303:19-304:22.
. Sweeney T 140:18-141:7; 36 T 197:7-198:5; see also Sweeney T 83:13-84:2, 84:4, 171:22-172:7, 199:13-200:16.
. P4085:101,109. Mr. Sweeney’s purported “belief” that Visipaque would also have been carved out of the NFC is outweighed by all other evidence of record, which indicates that Visipaque was only carved out of the FC criteria; that Mr. Sweeney was not aware of any instructions to the TF to exclude consideration of Visipaque from the NFC; and that the TF was given express instructions to consider GEH’s bid summary in scoring the NFC. Sw. 65-8, 123, 130-179, 210-211, 229-231, 236-237, 312-316, 322-323; P4094:436-7. GEH’s GPO expert admitted that "common sense” would indicate that the TF did consider the Visipaque information in the bid summary. 36 T 218-219, generally 208-239; 37 T 21-23, 29-32.
. Sweeney T 41-2, 177; P4120, 4112.
. Sweeney T 94-9,102-6,233; P4085:103, 4083:094-5.
. Sweeney T 29-32,68-71,96-9,116,191; P4135:620, 4084.
. P4085:101,103; 19 T 67-71.
. D2178at82; D31 at B461508.
. D1373 at B117118, 20, 24-25; 28 T 62:10-70:1, 73:10-78:19, 88:13-93:9; D 2047 at B168239; D2202 at B116235 ("Amersham is going to be an extremely difficult incumbent to unseat. There is excellent product performance, acceptance, service and general comfort with the entire Amersham product line.”); D2178 at 82; D31 at B461508 (Braceo felt there was “[n]o expectation of change [in Novation’s contrast media contract] for 2006 ..."); D2199 at B502821; D2207 at B226890.
. P732 (Quinn/Smith memo instructing representatives to “drive home a win” at Novation by "conveying strong clinical differentiation messages”), P4049 (database containing sales call notes for TF hospital members and colleagues); 37 T 54.
. See, e.g., Sales Calls Records, P2312 at A629955, 654950; A632476; Visi/93672; A623608; A627592, Omni/28079, A682435; Omni/67769; A660995; A670058; A637828, Visi/72736; A617748; A637355, 646585, Omni/28094, A682451; Omni/28303; A607435; A600371; A637302, 656303, 672542, Visi/66061; A618919; A637346, 646552, 682434; A611637; Visi/57817.
. P2161:391 ("Demonstrated to significantly reduce incidence of ... CIN”),388 (“Improves levels of patient comfort”),389-90("Demonstrated to significantly reduce ... MACE”), 4127, 4128:604, 4102, 4262; 37 T 56-57.
. Sweeney T 306:8-20, 118:14-24, 120:1-11; see also 36 T 142:6-143:4, 199:17-200:10.
. P4137; Sweeney T 65-8,130-43,313; P4078:032, 4085:102, 4084, 4133, 4134.
. P4137:633-633.1,634; Sweeney T 122-87.
. Sweeney T 147-52; P4137:633-633.1; see also 36 T 220-229, 37 T 4-18. Mr. Sweeney testified that safety was at least as important as any other factor to the TF and that GEH's bid summary contains superior safety claims only for Visipaque. Sweeney T 184-7.
. Sweeney T 177,161,166,175-6; 37 T 9-10, 14-16; 16 T 70-71; 1 T 104-105, 18 T 173.
. D2098 at Consorta 321; D204 at A143080; 12 T 94:5-12.
. D2098 at Consorta 321; D204 at A143080; 12 T 217:8-12.
. D2098; D204.
. D2098 at Consorta 0322; D204 at A143081.
. D2098 at Consorta 0322; D204 at A143081; see also D411-T at B266403; D123 at B168211; 12 T 220:1-3, 228:15-233:3; 19 T 115:19-116:6.
. D1761.
. D212 at Consorta 003 (Staff commented that several shareholders conducted clinical trials with [GEH]'s products. The Imaging Sub-Committee reported that all of the trials went extremely well and in some cases facilities did not want to switch back to the Braceo products after trialing [GEH]’s.”).; P702 at A250540; D204 at A143081; 19 T 117:21-118:22; D212 at CONSORTA 002, 003;
Smith T 130:14-131:24.
. P781:704; 12 T 101, 113-114. See also P788:215, 654, 625, 789:275-6, 793, 787; 9 T 131-132; 18 T 174-175; P630, 451.
. P709; 12 T 105-108. The POA instructed representatives to "[p]enetrate accounts with Visipaque ... by utilizing the key clinical differentiating advantages” and "ALWAYS lead with Visipaque and the NEPHRIC data and uniquely position Visipaque for the high risk and at risk patients.” P386:353,358,359; 12 T 122-125. See also P676 ("all Consorta key influencers [most] clearly understand the consequences of using Omnipaque and Omniscan vs not.... Effectively communicating the Visipaque story is vital to us winning this contract.”), 616 ("[o]ur pricing strategy on Visipaque will be a crucial part of the Consorta decision”), 621, 783, 786:201. GEH carefully tracked representatives’ compliance with the Consorta POA. P623, 683, 684, 656, 611, 626, 707, 792, 765; 703, 643.
. Column 2 uses Bracco's clarified pricing for Isovue, in which rebates are taken off of list price, rather than net. Both parties agreed that Braceo had always previously calculated its rebates off of list price. 12 T 103; P4223; P788:215; 21 T 183-184. There is no dispute that Consorta invited Braceo and all other bidders to clarify their bids. 21 T 178-181; D1358, 206 (Strong letter stating "other suppliers were indeed given the opportunity to respond”), 212:3 ("Braceo was directed to [clarify its bid] in writing by the next day”). But see D212:003 (Consorta meeting minutes recommending that "in the future” clarifications should not be allowed). Moreover, GEH made a series of post-bid rebate clarifications of its own (12 T 188-197; P4219, 4221, 4220, 4227) and learned Bracco's exact Consorta pricing. 12 T 97-103; P4223, 781:704.
. 18 T 174-175,183-185; 19 T 74-75; P869, 451, 2758, 176, 177, 179, 4219, 4221, 4227; D434.
. D212 at CONSORTA004; accord D204 at A143081; 21 T 215:6-216:8; D121; D118 at B285077; D202 at B074946; D1357; 37 T 188:7-189:1, 192:10-193:20; 12 T 213:8-214:21; Smith T 184:23-185:7; D203.
. 21 T 216:9-15; D 117 at B426316-18.
. 21 T 129:11-130:22, 140:2-19, 142:4-24, 148:18-24, 153:22-154:1, 158:2-159:16, 162:17-169:9; D2388AA at B284951 C‘[S]ome concern was noted [by Consorta] regarding Bracco's decision to hold firm on further price reductions.”); D2388CC at B285048; D674; D65; D1711 at B289570; D2388-V at B286615 ("Consorta is looking for Braceo to demonstrate a compelling value proposition with price as a central point to the discussions....”); D64 at B091484.
. D1761 (Winning the Consorta contract "came down to a clinical issue and a price issue and [Braceo was] in the weaker position on both fronts.”); D1766 ("If we had approached Consorta with even a portion of the level of concession [on price] we are now willing to make to Novation, I assure you we would still have that contract!”).
. 19 T 133:6-135:23.
. D2098 at Consorta 321-22; D204 at A143080-81; D64 at B091484; 19 T 117:8-20; 21 T 144:2-8, 154:2-155:24, 158:2-160:3, 215:6-216:8; 22 T 14:18-18:7; Smith T 157:19-158:21; D65 at B430469.
. D2098 at Consorta 322 ("Bracco’s ProHance ... had not garnered high compliance (due to reported patient reactions) forcing many Consorta facilities to purchase competitive product offcontract.”); D204 at A143081; see also 12 T 214:22-216:4; 28 T 10:4-12; 37 T 188:7-189:1, 193:21-196:3; Smith T 157:19-158:21; D1761; D63; D203; D131 at B275869.
. D66; D2422 at B502245; 21 T 169:23-172:22, 180:19-181:1.
. D212 at Consorta 002; D118 at B285077 ("We believe the restructured proposal makes our pricing consistent with Amersham’s.”); D2388DD at B289915; D119; 21 T 181:14-197:5; 22 T 20:17-26:9; D434; D937 at B433103; D938 at Consorta 013; D2422 at B502244-45; Smith T 141:9-24, 143:18-20, 145:19-146:17, 168:14-16, 168:21-169:22; D1358 at B087234.
. D212 at Consorta 002 ("The Sub-Committee discussed [Bracco’s enhanced bid] and stated that we should not accept this offer as this would be unethical.”), Consorta 003; D435; D437; D1358 at B087235; D206 at Consorta 0180 (President and CEO of Consorta finding Bracco's conduct "to raise further troubling ethical issues”); 37 T 188:14-189:1, 199:24-200:7; 21 T 198:19-207:21, 210:16-215:5; 22 T 4:20-6:11.
. D1761; D123 at B168207; 21 T 210:22-212:22; see also
. P1490 ("Visipaque’s growing penetration within Kaiser ... drove this process”), P1491, 1492, 717:877; 18 T 185-186; 19 T 75-76.
. PI490 at A291512, 513.
. 19 T 130:25-131:4.
. Specifically, D2014 states that the groups tested in both studies were "very similar with regard to demographic and other baseline characteristics ... as well as iodine does administrated," and D2015 referred to the NEPHRIC and Kay studies as "similar.” D2014; D2015. Likewise, in D3, a letter signed by Dr. Spinazzi and sent to over 30,000 doctors, asserts that Isovue is safer than Omnipaque, specifically comparing the results of NEPHRIC to the Kay study. D3.
. For example, testimony revealed that Mr. Malackowski’s expert fee was $500,000. In addition, on any given day of trial, multiple attorneys, technical personnel, and experts were present in the courtroom.
. Specifically, Braceo contends that Mr. Malackowski and Mr. Russell made a thorough review of the market that included all such factors through their review of thousands of documents (e.g., GEH market research, sales calls, instructions to the sales force, marketing plans and analyses, reports from the field, and other market analysis), interviews with or from participants (e.g., users of the products, sales representatives, depositions of GEH personnel), independent research, review of the technical literature themselves and via the reports of other technical experts.
.
E.g.,
35 T 211-212, 222-225 (D3465, p134);
Scotts Co. v. United Indus. Corp.,
. Braceo relies on the following cites.
See also Simon Prop. Group L.P. v. mySimon, Inc.,
. The survey was also confounded by not excluding the respondents’ memory from more than two years earlier, of the discontinued brochure and letter, in initial questions (D326; 35 T 154-156), and in the face of the respondents receiving other similar documents from Braceo and GEH at the same time and after, that they would have confused their memories of these with documents
(e.g.,
other similar brochures, the earlier March Spinazzi letter to doctors on the same subject matter (Dl), the GEH Vitti letters to doctors on the same subject matter (P2163)), creating a flawed memory test with a high risk of testing both faulty memories and perceptions, thus rendering the survey unreliable and inadmissible hearsay.
See, e.g., Pittsburgh Press Club v. United States,
. This conclusion is made in the context of non-commercial speech. It is not to say that the Court will refrain from inquiring into the reliability of such articles when they are used in a secondary dissemination in the form of commercial advertising.
.
Sanderson,
. An unclean hands defense also requires that a plaintiff must have engaged in precisely the same behavior it accuses the defendant of conducting.
See, e.g., Specialty Minerals, Inc. v. Pluess-Staufer AG,
. Some indicative phrases of GEH’s claims of Visipaque's renal superiority over all LOCM, as discussed supra are: (1) ”[]The NEPHRIC data clearly demonstrate that Visipaque™ 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; (2) "[C]linical studies, nephric etc show less risk nephrotox vs ... Isovue for [high risk] pts....” P2312:A659673, P4049:A659673; (3) “Approached dr. with nephric focus and differentiating vis from locm class with regards to osmoality. Reminded dr. that patients are 11 times likely to have CIN with the locm class than visi.” P3682:Omni/3727, 4049:Omni/3727; and (4) ”[R]ecent controlled trials have shown that non-ionic Isosmolar contrast agents are superi- or to low-osmolar agents in preventing CIN.” P425L210 (emphasis added).
. An example of GEH's claims of Visipaque’s renal superiority over LOCM with prophylactics, as discussed supra is: "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.
. The NEPHRIC conclusion actually states: ”[n]ephropathy 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 lowosmolar, nonionic contrast medium.” P2467.
. Some examples of GEH’s claims of Visipaque's superior performance with regard to incidence of MACE over all LOCM, as discussed supra are: (1) “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, P1893:940-41, P4151:p2; 7 T 69; (2) "Visipaque doesn’t increase heart rate or B/P like LOCM”. P3682:Omni/38573, 4049:Omni/38573; and (3) "Nonionic Dimer Provides Reduced MACE ...” P410:965, P3649:408, P3649A:408, D2324:117.
. Some examples of GEH’s claims of Visipaque’s superior performance with regard to patient discomfort over all LOCM, as discussed
supra
are: (1) “[Visipaque] offers significantly better comfort to the patient ...”
. Some examples of GEH's claims of Visipaque’s superior performance with regard to osmosality/cost over all LOCM, as discussed supra are: (1) 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. LOCM 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, P3114L821, P3210:934, 410:962, P3649:405, P3649A:405, P2510:772A, P2508:764A-65A, P2511C:780A, P4163:764A-65A, P4165:772A, P4166C:780A; D2324:114, D2334:p2, D2324:112; (2) "Isosmolar VISIPAQUE may reduce financial burden due to serious ■ adverse events”. P446:641, P649:665; and (3) "Used the 'cost' story for Visi vs. LOCM.....” P3682:Visi/l 54349, P4049:Visi/154349.
. GEH argues that Braceo improperly characterized its marketing as "tests prove” claims. However, the Court finds that there is an abundance of evidence to show that GEH's promotional campaign was primarily based on establishment type claims of superiority. Further, GEH contends that Braceo bears the burden of proof through surveys to show that GEH’s claims were establishment claims and not just regular superiority claims citing to
L & F Products v. The Procter & Gamble Co.,
Nonetheless, those cases are inapposite because in each one of them, it was not clear that the superiority claim was based on a test. For example in
L & F Products,
the Court found that the advertisements in question unambiguously depicted demonstrations of the two competing products by actors in a studio, not a laboratory test conducted by technicians.
. Again, the varied relevant studies tested different patient groups. The NEPHRIC study focused on high risk patients and incidents of CIN when using Visipaque versus Omnipaque. In COURT, scientists compared the use of Visipaque and Hexabrix in high risk patients undergoing Percutaneous Transluminal Coronary Angioplasty (“PTCA”) to determine which CM gave rise to more incidents of in-hospital MACE. VICC looked at patients from all risk levels, specifically those patients undergoing percutaneous cardiac intervention (“PCI”), to document incidents of MACE, comparing Isovue and Visipaque. VICC confirmed the findings of COURT in light of changes in practice, specifically the use of more stents and more IIB/IIIA inhibitors.
. In addition, in correspondence to GEH as recently as March, 21 2005, the FDA has echoed similar caveats regarding the unsupported contention that Visipaque performs superior to all LOCM. P1894.
. None of the FDA letters introduced by Braceo at trial constitute final agency action, and none found any specific GEH ad or promotional piece to be false or misleading.
See Schering-Plough Healthcare Prods. v. Schwarz Pharma,
. The Court notes that the requirement that the results be repeated in an adequate and well-controlled study is not the standard of the Lanham Act and merely reflects FDA requirements.
. Braceo supports this assertion by stating that none of the cited studies in the NE-PHRIC article used pretreatments. See P2467:916-7.
.During this litigation, evidence showed that GEH concluded a study called "NE-PHRIC II,” where it compared Visipaque and Isovue head-to-head. Despite the obvious rel
Nonetheless, the Court notes that such a study and its results would be of use to the Court in its determination to issue an injunction because despite the rule that new study results are only relevant to whether subsequent ads “are false or misleading,” in this case the alleged violative conduct is ongoing.
See Alpo Petfoods,
. GEH makes additional arguments that Braceo has failed to identify the allegedly "misleading” nature of any accused advertisement with specificity in its survey and that it has also failed to present evidence of "actual deception” through a valid survey. As set forth above, Dr. Rappeport’s survey, which tested two statements that purportedly ap
In addition, GEH correctly argues that even if credited, which the Court has declined to do here, those results cannot be applied to: (i) statements not tested, or (ii) statements in media other than those surveyed.
AstraZeneca,
. On its website, NAD describes itself as a low-cost alternative to litigation, providing companies with a forum to air their disputes over the veracity of national advertisements. “NAD uses a unique, hybrid form of alternative dispute resolution, working closely with in-house counsel, marketing executives, research and development departments and outside consultants to decide whether claims have been substantiated. Each party to the dispute has ample opportunity to explain its position and provide supporting data.’’ About NAD, www.nadreview.org/AboutNAD. aspx.
. GEH contends that Braceo must present clear and convincing evidence in order for this Court to find willfulness. In support, GEH relies on several cases.
Castrol Inc.,
. A sixth factor, “palming off,” applies to trademark actions, but is not applicable to false advertising actions.
. The NEHPRIC Article was published in a very highly acclaimed medical journal, making an even stronger case that GEH’s actions were reasonable at the time and not carried out in a willful manner.
. In addition, the Court notes that the Lanham Act does not provide for trebling of disgorgement of defendant’s profits, but that a court may adjust an award of defendant’s profits either upward or downward, in the interest of equity, provided any award does not exceed more than three times the amount of actual damages. 15 U.S.C. § 1117(a);
Donsco,
. The Court notes that numerous courts have adopted an "Account Specific” approach to calculate damages.
See, e.g., Sweetzel, Inc. v. Hawk Hill Cookies, Inc.,
No. 95-2632,
.Braceo also asserts that disgorgement need not account for third party competitors. Braceo relies on authority which holds that when multiple competitors compete for sales in the market, it is acceptable to disgorge all of a defendant’s increased profits without accounting for the presence of third party competitors.
Callaway,
. “While the plaintiff must prove causation, it does not have to negate every conceivable intervening factor which might have caused a decline in sales.” 5 McCarthy § 30:79;
see also EFCO,
. While Mr. Malackowski’s presentation was illuminating on the issue of damages, Braceo has not proffered sufficient evidence linking its sales decline to GEH's false advertising.
. Contrary to GEH's assertion that Lanham Act damages are "notoriously difficult to prove and unavailable" (36 T 5), courts frequently have upheld multi-million dollar awards.
See, e.g., U-Haul Int’l v. Jartran, Inc.,
. The Court notes that it excluded a Braceo letter upon which Bracco's experts relied to support their assumption that Braceo had additional capacity beyond the Consorta contract.
. Recovery is not limited to advertisements that make specific reference to the defendant or his false claims, nor is plaintiff required to prove that the false advertisements were the sole reason for its expenditures.
ALPO Petfoods, Inc. v. Ralston Purina Co.,
. For a more detailed discussion, see supra p. 479-80.