Court Says Actavis Can’t Delay Competition from Generic Alzheimer Drugs

Last year we wrote about the drug maker Actavis trying to squeeze out competition from generic manufacturers by modestly changing its Alzheimer drug, charging more for it and prolonging its exclusive right to sell it. The company was sued, and last month, a federals appeals court smacked it down in a ruling for the People of the State of New York.

As explained on Reuters.com, the New York State Attorney General sued to block the switch from the older drug, Namenda IR to a longer-acting version, Namenda XR. The original drug was taken twice a daily, and the extended-release version once a day.

In December, a judge had ruled for the plaintiff, a decision upheld by a three-judge panel last month. The ruling requires Actavis to keep Namenda IR on the market. The company had planned to remove it, forcing patients to switch to the newer version. The ploy was described by the court as “[crossing] the line from persuasion to coercion and is anticompetitive.”

This is the first time, according to Reuters, that a U.S. appeals court pondered what’s known as “product hopping.” That describes pharmaceutical companies attempting to extend their patent exclusivity by releasing products successively, a practice that can violate antitrust law.

Actavis had claimed that it would lose $200 million in sales if it were unable to withdraw Namenda IR from the market. But couldn’t you interpret that as saying that what the company really wants to do is charge inflated amounts for a relatively minor modification?

Most states have laws requiring pharmacists to substitute a generic drug for a brand-name drug if exact equivalent is available, so no wonder Actavis wanted to protect itself against generic competition, even if it meant twisting the law into a knot.

Thanks to the ruling, Actavis may not remove Namenda from the market until 30 days after generic versions launch in July.

The attorney general issued this statement: “The litigation brought by my office sends a clear message: Drug companies cannot illegally prioritize profits over patients.”

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