New York attorney general Eric Scheiderman sues Actavis Plc over Alzheimer drug switch

Actavis Plc was sued by New York attorney general Eric Schneiderman, who intends to stop the drugmaker from swapping one version of its Namenda Alzheimer's drug for another, Bloomberg reported.

According to Schneiderman's complaint filed yesterday in a federal court in Manhattan, the Dublin-based company's plans to discontinue the immediate-release version of its Namenda Alzheimer's drug and switch patients to an extended-release version with patents that expired later, violating state and federal anti-trust laws.

The switch would destroy the market for generic versions of Namenda IR, once the drug's patent expired next year, as patients would need to switch back from the extended-release version if they wanted to get the cheaper generic version of the original, according to the complaint.

Actavis acquired Namenda with its acquisition of Forest Laboratories Inc, a $28 billion acquisition that closed in July (See: Actavis to acquire Forest Laboratories for $25 billion).

While the latest patent on Namenda XR, the slow-release version of the Alzheimer's pill, would expire in September 2029, the Namenda IR version of the medication would go generic next year, ahead of the expensive generic product becoming available. Namenda IR was scheduled for withdrawal from the market.

''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.

According to CBS News, the suit follows an investigation in August into why a version of the drug was being taken off the market.

Namenda IR generates around $1.5 billion in annual sales.

Doctors are however being asked to transition patients to Namenda XR, a once daily pill with additional patent protection and which was not likely to go generic for years, in a strategy called "forced switch."

Schneiderman seeks to block Namenda's maker, Forest Laboratories, and its parent company, Actavis, from withdrawing the drug.  According to the suit, the "forced switch is an effort to game the regulatory system and manipulate patients and physicians through business practices that...impede competition from cheaper generic drugs and perpetuate Defendants' monopoly profits."

Forest Laboratories CEO Brent Saunders, who is now CEO of Actiavis, discussed the issue in a conference call January. CBS News which obtained a recording of the call said, in recording, Saunders said, the company believed by potentially doing a forced switch, it would hold on to a large share of its base users.