Allergan ties up Namenda loose ends with $750M settlement
Allergan, which is in process of being swallowed by AbbVie, is clearing out the cobwebs. On Monday, it agreed to pay $750 million to settle class-action litigation surrounding its Alzheimer’s drug Namenda.
In the summer of 2014, New York’s then-attorney general Eric Schneiderman filed an antitrust lawsuit against a unit of Actavis (now Allergan), alleging that the company had taken illegal steps to delay and impair generic competition for Namenda.
The immediate-release version of Namenda was approved by the FDA in 2003, but with a looming patent cliff in 2015 Actavis in 2014 decided to yank the twice-daily drug off the market and announced plans to replace it with the long-acting (once-daily) version of the drug.
Once patients switch to Namenda XR, they will likely remain on the medicine despite the introduction of generics for original Namenda, allowing Actavis to insulate its profits from competition, Schneiderman asserted in September 2014.
Actavis insisted it was making the switch simply because Namenda XR is a superior drug. Still, the company’s chief Brent Saunders in an earnings conference call early in 2014 said, “we believe that by potentially doing a forced switch, we will hold on to a large share of our base users.”
“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. “Unfortunately, schemes to block competition, without considering the consequences to patients, are a growing trend in the health care industry.”
After the New York AG suit, purchasers of the drug asserted similar claims in a class-action suit, arguing that Actavis had made deals with generic companies such as Mylan to also defer the entry of copycats.
Allergan was scheduled to go to trial later this month — so this settlement, in which Allergan makes no admission of wrongdoing, is timely.