Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Allergan settles with New York AG over Alzheimer’s drug 'force switch' plan, (Dec 3, 2015)

By Jody Coultas, J.D.

The New York Attorney General’s Office resolved an antitrust lawsuit it brought against Allergan plc (previously Actavis plc) after successfully preventing Allergan from forcing Alzheimer’s patients to switch medications as part of a strategy to maintain high drug prices. Allergan consequently withdrew its petition for review, which was before the U.S. Supreme Court (Allergan plc v. New York, Dkt. 15-587).

In February 2014, Allergan’s subsidiary Forest Laboratories, Inc. allegedly announced a plan to withdraw its Alzheimer’s drug Namenda IR from the market a few months before generic versions became available, in order to force patients to switch to a very similar drug manufactured by Forest that had a longer lasting patent. Forest knew that patients were likely to remain on the new medication even after generics for Namenda IR entered the market, due to the practical difficulties of switching back.

In December 2014, New York was granted an injunction that prohibited Allergan from engaging in its “forced switch” plan. Low cost generic versions of Namenda IR entered the market in the summer of 2015, and patients who wished to remain on Namenda IR and then switch to the generic version over the summer were able to do so without any disruption in their medical treatment. The injunction expired by its own terms in August 2015.

Because the injunction protected competition and allowed low cost generic drugs to enter the market unimpeded, the AG determined that it is no longer necessary to continue legal action. Pursuant to a settlement agreement entered into by the parties, the lawsuit was dismissed, and Allergan withdrew its request for U.S. Supreme Court review. Allergan did not admit liability, and agreed to make a payment of approximately $172,000 to the State of New York to help defray a portion of the state’s litigation expenses.

“Our lawsuit prevented Allergan from pursuing its plan to block competition, thus preserving patient choice for hundreds of thousands of Alzheimer’s patients, and protecting the public from bearing hundreds of millions’ of dollars in unnecessary drug costs,” said Attorney General Schneiderman. A recent study by the federal Department of Health and Human Services indicated that the lawsuit may save U.S. taxpayers billions of dollars over the next several years.

"We remain committed to clarifying the law in this area along the lines set forth in the Company’s petition for certiorari with the Supreme Court of the United States, which was filed on November 4, 2015, and we expect that there will be opportunities to do so in the future,” stated Robert Bailey, Executive Vice President and Chief Legal Officer at Allergan.

Companies: Allergan plc; Forest Laboratories, Inc.

News: Antitrust NewYorkNews