NY AG Sues Actavis Over New Formulation Switch, Blocking Generic Competition

September 22, 2014

New York’s attorney general has filed what may be a first-of-its-kind antitrust lawsuit against Actavis and subsidiary Forest Laboratories for seeking to switch patients on its Alzheimer’s drug Namenda to a newer formulation with longer lasting patents in order to stave off generic competition.

The suit, filed in New York federal court, centered on Actavis’s plan to withdraw Namenda (memantine) from the market and force patients to switch to Namenda XR. While the original formulation’s patents expire next year, the extended release version has patents that extend well into the next decade, according to the Orange Book.

Discontinuing the older version solely for the purpose of delaying generic competition by forcing patients onto one for which there is no certified substitutable version is illegal and anticompetitive, Attorney General Eric Schneiderman said. Industry experts couldn’t say how often similar product switches are made, but they are a major tool drugmakers use to extend a product’s patent life.

Individual generics makers have made the argument before that switches of this type are anti-competitive, which the FTC has supported in amicus briefs, but this would be the only time an attorney general has pressed a case. Hyman, Phelps & McNamara attorney Kurt Karst said that he has never seen an antitrust lawsuit like this before.

The case stems from Forest’s decision in February to cancel Namenda in tablet form while continuing to produce the therapy as an oral solution as well as the extended release version. Actavis completed its acquisition of the company in July.

In its February announcement, Forest touted Namenda XR as superior to its older version because it can be taken once a day instead of twice.

The attorney general’s office rejected that claim, arguing that “if that were the true reason for the switch, Actavis could simply give patients a choice rather than imposing this forced switch.”

Switching patients to newer formulations of drugs with the same active ingredient is a popular move among brandmakers seeking to head off generic competition. The newer versions come with renewed patents that last longer but are not considered to be bioequivalent and thus switchable with generics of the old version under state substitution laws.

Namenda generated $1.5 billion in sales for fiscal year 2014, according to Forest SEC filings. — Bryan Koenig

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.