NY sues Actavis and Forest for 'monopoly' on Alzheimer's drug

Eric Schneiderman

Some analysts called it a cheap trick when Forest Laboratories said it would stop making the Alzheimer's drug Namenda this fall so it could push patients to switch to their new long-acting version as generic rivals to the original loom. New York attorney general Eric Schneiderman calls the tactic something else: illegal.

Schneiderman has filed suit against Forest and its new owner, Actavis ($ACT) in an attempt to stop them from discontinuing Namenda production. The lawsuit alleges that the company's strategy to move patients to the long-acting version of the drug, often referred to as a "forced switch," is tantamount to trying 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," said Schneiderman in a statement to the media.

Actavis has not commented on the lawsuit, but the company told the New York Times that the new version of the drug, called Namenda XR, has "significant advantages" for patients and caregivers.

The drama started back in February when Forest said it would stop manufacturing Namenda, a twice-daily pill, this summer. Generic versions of Namenda will start hitting the market in July of 2015, so Forest planned to switch patients over to Namenda XR, which can be taken once a day and is likely to be patent-protected until 2025. While it's common for makers of branded products to raise prices on originals to get consumers to switch to new-and-improved drugs before cheap generics arrive, discontinuing a product altogether is an unusual tactic.

But in June, when Forest was in the process of being acquired by Actavis for $28 billion, the company indicated it was having trouble keeping up with the demand for Namenda XR and would continue making the original until the fall. Forest Labs CEO Brent Saunders, who is now heading up the combined company, had said that the ability to discontinue Namenda would depend upon having adequate supply of the newer version. Actavis acknowledged last week that it wasn't sure when the supply issues would be rectified.

Still, it's clear Schneiderman wants to make sure no patients are forced to switch to Namenda XR. The lawsuit seeks an injunction against the companies to get them to abandon the plan, a well as civil penalties and damages, according to Reuters.

- here's the NYT story (sub. req.)
- read more at Reuters