Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Forest Labs allegedly conspired to monopolize, allocate generic Namenda® market, (Sep 24, 2015)

By Greg Hammond, J.D.

Forest Laboratories, LLC purportedly conspired with generic pharmaceutical companies to monopolize, unlawfully maintain a monopoly for, and allocate the market for branded and generic versions of Namenda®. The prescription drug is used to treat Alzheimer’s disease, according to a complaint filed in the federal district court in New York City (J M Smith Corp. v. Actavis, PLC, September 22, 2015).

Forest allegedly licensed the rights to market Namenda immediate release (Namenda IR) and extended release (Namenda XR) in the United States under U.S. Patent No. 5,061,703 (the ‘703 patent), which is owned by Merz Pharma GmbH & Co. KGaA. The patent covers the use of memantine hydrochloride, sold under the Namenda brand name, to treat Alzheimer’s disease.

J M Smith Corp., doing business as Smith Drug Co. alleges that it purchased Namenda directly from Forest, and that Forest created a scheme to improperly block generic competition for Namenda IR by: (1) arranging and participating in a conspiracy with generic pharmaceutical companies to delay the launch of AB-rated generic versions of Namenda IR; and using this improperly obtained period of additional exclusivity to launch the successor branded product, Namenda XR, thereby forcing the conversion of the memantine hydrochloride market from Namenda IR to Namenda XR.

The alleged goal of the conspiracy was to convert as much of the market as possible to Namenda XR prior to market entry of generic versions of Namenda IR because the generic versions would not be AB-rated to Namenda XR, and would therefore not be automatically substitutable at pharmacies.

J M Smith brought claims for monopolization and unlawful maintenance of monopoly power, in violation of Section 2 of the Sherman Act, by or through: (1) conversion of the Namenda Market from IR to XR formulation; (2) an overarching scheme to prevent or delay generic competition; and (3) an agreement not to compete beyond the expiration of the ‘703 patent. In addition, J M Smith brought claims against Forest for restraint of trade, in violation of Section 1 of the Sherman Act.

The complaint requests a determination that the action be maintained as a class action; joint and several judgments against the defendants; damages, including trebled damages; as well as attorney fees and costs of suit.

The case number is 1:15-cv-07488

Attorneys: Bruce E. Gerstein (Garwin Gerstein & Fisher LLP), David C. Raphael, Jr. (Smith Segura & Raphael, LLP), Stuart E. Des Roches (Odom & Des Roches, L.L.P.), and Russ Chorush (Heim Payne & Chorush, LLP) for J M Smith Corp.

Companies: J M Smith Corp.; Actavis, PLC; Forest Laboratories, LLC; Merz Pharma GmbH & Co. KGaA

News: Antitrust