Allergan Settles Namenda Lawsuit for $750 Million

Allergan announced that its subsidiary Forest Laboratories will pay $750 million to direct purchasers to settle allegations of anticompetitive behavior over the Alzheimer’s drug Namenda (memantine).

Smith Drug Company, a direct purchaser of the drug, filed a class action lawsuit against Forest in 2015 in the U.S. District Court for the Southern District of New York, alleging the company conspired with generic drug developers to keep generics of the drug off the market.

Forest was acquired by Actavis — later renamed Allergan — in June 2014. The subsidiary was specifically accused of conspiring with the generic drugmakers to delay launch of generics of Namenda IR, to improperly secure additional exclusivity for the drug, and to use the exclusivity to launch an extended release version of the drug, Namenda XR.

The launch was blocked by the New York federal court and by the Second Circuit Court of Appeals until generic versions of the drug reached the market in July, despite Actavis’ assertion that Namenda XR was superior to its predecessor.  

The class action case was scheduled to go to trial. The $750 million settlement is subject to finalization and court approval, and it does not include any admission of wrongdoing.