Actavis plan to switch Namenda drug was unlawful, says US court

A US appeals court has ruled that Actavis’s attempt to force Alzheimer’s patients to switch from one medication to another before generic companies entered the market was anti-competitive.

It has also upheld an injunction issued by the US District Court for the Southern District of New York that only allowed Actavis to withdraw its original formulation of the drug, the twice daily Alzheimer’s drug Namenda IR (memantine hydrochloride), from the market 30 days after generic entry.

Preparing for its July 2015 loss of market exclusivity for Namenda IR last year, Actavis announced it would take the drug off the market and concentrate on an extended-release formulation of the drug, called Namenda XR. Namenda XR is patent protected until 2029.

Patients using the old version would be forced to start taking the new formulation of Namenda before generic versions of the IR formulation entered the market, Actavis said. This practice is sometimes called ‘product hopping’.

Last September, Eric Schneiderman, attorney general of New York state, sued Actavis and its subsidiary Forest Laboratories at the New York district court, arguing that its decision to take Namenda IR off the market would probably impede generic competition.

In December, the district court issued a preliminary injunction that ordered Actavis to continue to sell Namenda IR.

Actavis appealed against that decision to the US Court of Appeals for the Second Circuit, arguing that the court had applied the “wrong legal standard for a preliminary injunction” and that product hopping is not anti-competitive.

But the appeals court found evidence that Actavis was trying to curb generic competition, quoting the defendants as saying “we need to transition volume to XR to protect our Namenda revenue from generic penetration in 2015 when we lose IR patent exclusivity” and “[w]hat we’re trying to do is make a cliff disappear ... And we believe that by potentially doing a forced switch, we will hold on to a large share of our base users”.

The court also attributed the following quotes to Actavis: “Our mission is to convert to Namenda XR and lift the franchise… We need to convert as much business to Namenda XR as quickly as possible.

In that decision, signed on May 22 but made available to the public last Thursday (May 28), the appeals court agreed with the district court’s decision, finding that New York state had demonstrated a “substantial likelihood of success on the merits of its claim under the Sherman Act”, and had “made a strong showing of irreparable harm to competition and consumers in the absence of a preliminary injunction”.

It added: “Defendants’ hard switch crosses the line from persuasion to coercion and is anti-competitive.”

In statement on May 22, Actavis chief executive and president Brett Saunders, said: “While we are disappointed by the court’s decision to uphold this ruling, we intend to continue our strong efforts to convey the significant benefits of Namenda XR to physicians, patients and caregivers.”