Release of a new version of the Alzheimer’s drug, Namenda XR, raises antitrust suit against manufacturers allegedly accused of ‘product hopping’.
New York Files an Antitrust Suit Against the Maker of an Alzheimer’s Drug
SEPT. 15, 2014
New York State’s attorney general filed an antitrust lawsuit on Monday seeking pharmaceutical litigation to stop a company from forcing patients with Alzheimer’s disease to switch to a new version of a widely used drug. The lawsuit contends that the switch is designed to blunt competition from low-priced generic versions of the medication. Forest Laboratories, now owned by Actavis, announced in February that it would stop selling the existing tablet form of the drug, Namenda, in favor of new extended-release capsules called Namenda XR that can be taken once a day instead of twice. While the company said that patients preferred the newer drug, it has made little secret of its desire to switch all patients to the newer form, which has a longer patent life, before the old tablets face generic competition in July. The strategy would make it much harder for the generics to gain traction. The lawsuit, filed in Federal District Court in Manhattan, says the step is an illegal attempt by Forest to maintain its monopoly even after its patent expires. Brent Saunders is chief of Actavis, maker of Namenda. Credit Librado Romero/The New York Times “A drug company manipulating vulnerable patients and forcing physicians to alter treatment plans unnecessarily, simply to protect corporate profits, is unethical and illegal,” the attorney general, Eric T. Schneiderman, said in a statement. A spokesman for Actavis said the company did not comment on pending litigation as a matter of policy. The company said that the once-a-day drug had “significant advantages” for patients and their caregivers. The lawsuit argues that the benefit of switching is not very great. It says the company decided to force the switch because it feared that not enough patients would switch voluntarily. The tactic, called product hopping, is one of several ways brand-name drug manufacturers try to sidestep generic competition. Several antitrust cases have been brought against drug companies for product hopping, though mainly by pharmacies and health plans rather than government regulators. Most generics are dispensed because state laws allow or require pharmacists to substitute a generic when a doctor prescribes the brand-name drug. But if the brand-name drug is different in even a minor way, such as the dosage, the pharmacists cannot make the substitution. So product hopping can be a way to game the system, the Federal Trade Commission said in 2012 in an amicus brief filed in a private lawsuit involving the acne drug Doryx. It said a brand company could make “modest nontherapeutic changes to its product and effectively prevent generic competition, not because the reformulated product is preferred by consumers, but simply because it is different.” More than 4.4 million prescriptions were written for the new and old forms of Namenda combined in the first half of this year, according to IMS Health. The drug, known generically as memantine, had sales exceeding $1. billion in Forest’s last fiscal year, which ended in March. The drug costs about $300 a month, according to the website GoodRx.com. Continue reading the main storyContinue reading the main storyContinue reading the main story About 40 percent of users have already switched to the new form, according to the lawsuit. But there is now a shortage of Namenda XR. That has forced the company to continue to make the older tablets available beyond its deadline of Aug. 15. The website for Namenda now says the cutoff will occur this fall. In a conference call with analysts in January, Brent Saunders, the chief executive of Forest, said that once patients switched to the once-a-day version it would be very difficult for the makers of generics to get them to switch back. Mr. Saunders is now the chief executive of Actavis. Forest expects sales of Namenda to gradually decline after the generics arrive. But the lawsuit says that Forest has taken steps to preclude Medicare Part D plans from even including the older tablets on the list of reimbursable drugs. The law on product hopping, however, is not clear. While courts might want to preserve generic competition, they have historically been reluctant to interfere with the ability of a company to introduce new products. Product hopping accusations “are a relatively recent phenomenon, and the law remains very much in flux,” according to a review published last fall in Antitrust magazine by lawyers at the firm Gibson Dunn & Crutcher. Perhaps the best-known example of product hopping was AstraZeneca’s introduction of Nexium, which critics called a slight modification of its previous heartburn drug Prilosec. A court dismissed a lawsuit against AstraZeneca filed by the pharmacy chain Walgreen, saying that even if Nexium’s introduction depressed sales of the generic Prilosec, that was not a violation of antitrust rules. Unlike what Forest plans to do, however, AstraZeneca did not remove Prilosec from the market, so Nexium and Prilosec could battle it out in the market. Nexium went on to achieve billions of dollars of sales each year. In a case involving Abbott Laboratories and its cholesterol-lowering drug TriCor, a court declined to dismiss lawsuits, in part because Abbott had taken the older versions off the market. The suits claimed that Abbott switched from a capsule to a tablet and a few years later changed the doses of the tablets. Each time, it removed the older versions from the market before generics were allowed to be sold, causing generic companies to go back to the drawing board. The effort added about $700 million a year to the nation’s health care costs, according to a paper in the journal Archives of Internal Medicine. Abbott was sued by generic companies, health plans, pharmacies and about half of the states. The company settled for an amount estimated to be over $250 million. Another company accused of product hopping more than once is Warner Chilcott, which was also acquired by Actavis. Warner changed the formulation of the Doryx acne drug several times, including changing from a capsule to a tablet, according to lawsuits filed by the generic drug company Mylan and others. Actavis has been settling some of these lawsuits. Warner Chilcott also took its tablet for ulcerative colitis, called Asacol, off the market in 2013 before generics were allowed, and replaced it with a capsule called Delzicol made of the same ingredient. Roger Boissonneault, then the chief executive, described the strategy to analysts in a conference call in February 2013. “Generally, the generic company doesn’t even get launched because the reference product will be Delzicol,” he said. “There won’t be any Asacol out there. We’ve seen that happen with Doryx, when the generic company got the product approved and by that time the product had moved on.” Originally posted on nytimes.com by Andrew Pollack Los Angeles pharmaceutical lawyer – Ball & Evans and Ball & Evans