Actavis agrees to keep making original version of its Alzheimer's drug for a while

Actavis ($ACT) CEO Brent Saunders had what he thought was a pretty good plan to switch patients from the original version of the Alzheimer's treatment Namenda IR, which is going off patent, to its new once-a-day version. But the New York Attorney General was not impressed with the company's plan to just quit making the original version, and now Actavis has agreed to produce it for a couple more months to settle a lawsuit the AG filed this month.

"We've agreed to the status quo for the next 60 days," J. Mark Gidley, an attorney for Actavis, told U.S. District Judge Robert Sweet, Reuters reports. "This is changing our business strategy."

The lawsuit by New York Attorney General Eric Schneiderman called the tactic by Forest Laboratories and its new owner an effort to maintain an illegal monopoly. "A drug company manipulating vulnerable patients and forcing physicians to alter treatment plans unnecessarily, simply to protect corporate profits, is unethical and illegal," Schneiderman said in a statement to the media two weeks ago.

The events began to unfold in February preacquisition, when Forest announced it would stop manufacturing Namenda IR, a twice-daily pill, August 15. The drug generated about $1.5 billion for Forest last year, but generic versions of Namenda are expected to arrive in July 2015. Forest planned to switch patients over to Namenda XR, the once-daily version, which is patent-protected until 2025. But the "forced switch" method was seen as a bit heavy-handed by some analysts and eventually by the AG.

The fact is, the changeover was going so well that Forest was having trouble getting production of the new product ramped up enough to meet demand. It had already extended the manufacturing of the original to "this fall" from its original August 15 termination date. The lawsuit claimed that Forest had already gotten 40% of Namenda IR users to switch over. Documents in the case said the company expected "dramatically increased profits if it were able to switch large numbers of patients to Namenda XR," Reuters reported. Now production should continue until sometime in late November. 

- here's the Reuters story