Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Forest Labs charged with conspiracy to delay generic competition for Namenda, (Dec 29, 2015)

By Linda O’Brien, J.D., LL.M.

Brand drug distributor Forest Laboratories entered into unlawful agreements with generic drug manufacturers to settle patent infringement suits and launched a reformulated branded drug in order to delay entry of a generic version of its brand name drug Namenda into the market, according to a complaint filed in the federal district court in New York City (Rochester Drug Co-Operative, Inc. v. Actavis, plc, December 28, 2015).

Forest Laboratories, a distributor of branded pharmaceuticals and subsidiary of pharmaceutical manufacturer Actavis, is the exclusive seller of the patented drug Namenda, a memantine hydrochloride therapy approved for the treatment of Alzheimer’s disease. Rochester Drug Co-Operative is a wholesale drug cooperative that buys and distributes pharmaceuticals and home health supplies to community retail pharmacies, long term care pharmacies, and home health care stores.

The complaint states that, in June 2000, Forest entered into a license agreement with German drug manufacturer Merz Pharmaceuticals for the exclusive rights to develop a memantine hydrochloride product for the treatment of dementia under Merz’s patent, U.S. Patent no. 5,061,703 (“the ‘703 patent”). Forest submitted a new drug application (NDA) to the Food and Drug Administration (FDA) and brought Namenda immediate release (IR) tablets to market in 2004. Forest also sought an extension of the ‘703 patent, which was granted and extended to the patent’s expiration date to April 2015. The FDA also granted Forest’s request for additional six months of exclusivity for Namenda IR tablets, which further extended the patent’s expiration date to October 2015.

Beginning in October 2007, numerous generic drug manufacturers filed abbreviated new drug applications (ANDAs) with the FDA, seeking to market generic versions of Namenda IR. In January 2008, Forest filed lawsuits against the generic manufacturers, alleging infringement of the ’703 patent. By filing suit, Forest triggered an automatic 30-month stay continuing through April 2010 during which time the FDA could not approve any of the generics’ ANDAs for generic equivalents of Namenda IR., the complaint states.

According to the complaint, Forest was aware that the ‘703 patent was weak and it would not be able to stop any of the first filing generics from launching generic versions of Namenda IR once they received final FDA approval of their ANDAs. To protect and maintain its monopoly power, Forest entered into settlements with Cobalt, Teva, Upsher-Smith, Wockhardt, Amneal, Apotex, Sun, Lupin, Orchid Chemicals, Mylan, and Dr. Reddy’s, whereby the generic manufacturers agreed to delay competing with Forest until July 2015 in exchange for discontinuing their efforts to challenge the ‘703 patent. The defendants and generic manufacturers have not publicly disclosed the amount of cash payments given by Forest and Merz pursuant to the settlement agreements.

With generic entry delayed as a result of the settlement agreements, Forest developed a new follow-on drug with a patent expiration date significantly later than that of Namenda IR —a reformulated Namenda IR as an extended release capsule, Namenda XR. In June 2010, the FDA approved Forest’s NDA for Namenda XR. In February 2014, Forest implemented a plan to withdraw Namenda IR from the market, which was protected by a patent due to expire in July 2015, and to switch patients to a reformulated version—Namenda XR. After doctors refused to switch patients to the reformulated drug, due to a preference not to disrupt Alzheimer’s patients’ routines, Forest attempted to force the switch by restricting the supply of Namenda IR and announced that Namenda IR would be withdrawn from the market by August 2014, the complaint alleges.

The complaint also alleges that Namenda IR and Namenda XR have the same active ingredient. The one characteristic between the two drugs is the dosage, which was crucial to Forest’s anticompetitive scheme. Forest exploited the difference since a generic Namenda IR could not be considered “AB-rated” to branded Namenda XR and pharmacists could not legally substitute the generic Namenda IR when presented with a prescription for Nameda XR. The defendants’ exclusionary conduct delayed the sale of generic memantine hydrochloride in the United States and enabled Forest to sell significantly more memantine hydrochloride at artificially inflated prices.

Rochester Drug asserts claims for monopolization and restraint of trade in violation of Sections 1 and 2 of the Sherman Act. The action seeks declaratory relief, treble damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 1:15-cv-10083.

Attorneys: Elizabeth A. Silva and Peter Kohn (Faruqi & Faruqi, LLP) and David F. Sorensen (Berger & Montague, P.C.) for Rochester Drug Co-Operative, Inc.

Companies: Actavis, plc; Forest Laboratories, LLC; Merz GmbH & Co. KGaA; Merz Pharma GmbH & Co. KGaA; Merz Pharmaceuticals GmbH

News: Antitrust NewYorkNews