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15 June 2021Big PharmaMuireann Bolger

Allergan’s Forest to face jury in antitrust suit over Alzheimer drug

Allergan subsidiary Forest Laboratories will have to argue its case before a jury over claims that it used pay-for-delay deals to keep generic copies of blockbuster Alzheimer drug, Namenda (memantine), from the marketplace.

US District Judge Colleen McMahon handed down her decision on Friday at the US District Court for the Southern District of New York.

Judge McMahon mostly denied summary judgment motions that sought to suppress the class action, which is being brought by the pension fund, the Sergeant’s Benevolent Association (SBA) Health & Welfare Fund.

The SBA administers a prescription drug benefit plan for active and retired New York City Police Department sergeants and their dependents and represents a class of indirect purchasers.

Ongoing dispute

This decision is the latest development in a long-running dispute over actions Forest took regarding its brand-name drug, Namenda, a memantine hydrochloride-based drug used to treat moderate to severe Alzheimer's disease.

In June 2000, German pharmaceutical company Merz provided Forest with an exclusive licence for US patent number 5,061,703, which gave Forest the right to market the drug.

Forest developed Namenda IR and began marketing it in the US in late 2003. Namenda IR's exclusivity period based on the '703 patent was originally set to expire in April 2010, but in March 2009, Forest obtained a five-year extension to the expiration date to April 2015. Forest succeeded in later applying for another six-month extension, so that the final expiration date of the patent was October 11, 2015.

In October 2007, 14 generic manufacturers submitted abbreviated new drug applications (ANDAs) with the US Food and Drug Administration in preparation to market generic copies of the drug. These ANDAs notified Forest of their view that the '703 patent was either invalid or was not infringed by the generic manufacturers' versions of their memantine product.

Beginning in early 2010, several of the generic manufacturers were notified that their ANDAs were ready for approval following the expiration of the 30-month stay. According to the SBA, Forest then entered into several reverse payment settlements with them so that the manufacturers agreed to not launch their generic versions of Namenda IR until after July 11, 2015.

Anger over “hard switch”

SBA also claimed that when anticipating the decrease in Namenda IR's market share after the generic launches, Forest decided to completely withdraw Namenda IR from the market in order to replace it with Namenda XR.

SBA alleged that the actions the defendants took surrounding this announcement represented an anticompetitive "hard switch" designed to force consumers to switch to Namenda XR without the option of remaining on the original version.

In 2014, after Forest announced its plan to discontinue Namenda IR, the State of New York sued Forest and Allergan (then known as Actavis), to prevent them from doing so, arguing that the “hard switch” was anticompetitive.

In August 2015, SBA filed its lawsuit, and in September 2015, direct purchasers of Namenda filed a similar lawsuit. Both sets of plaintiffs alleged that defendants' actions in carrying out the hard switch and in entering into the reverse-payment settlements forced them to pay super competitive prices for memantine.

In 2019, Allergan signed a $750 million settlement with the direct purchasers of Namenda.

In contrast to these purchasers, who brought their claims under the Federal Sherman Act, the SBA brought its claims under state antitrust and consumer-protection laws.

In concluding her decision this week, Judge McMahon held that Forest’s cross-motions for summary judgment on the antitrust claims were denied in full.

“These claims will go to trial as to whether the reverse-payment settlements (including the Lexapro Amendment) were anticompetitive, and whether they caused any delay in generic competition,” she stated.

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