Antitrust Law Daily Wrap Up, ANTITRUST—S.D. N.Y.: Portions of New York complaint about drug company’s switch of Alzheimer medication to remain sealed, (Oct 22, 2014)

By Linda O’Brien, J.D., LL.M.

In an action by the New York Attorney General against pharmaceutical manufacturer Actavis plc and its subsidiary Forest Laboratories for allegedly forcing Alzheimer’s patients to switch medications as part of an anti-competitive strategy designed to delay generic competition, the federal district court in New York City has granted in part the manufacturers’ motion to seal redacted portions of the complaint (The People of the State of New York v. Actavis, plc, October 21, 2014, Sweet, R.).

Forest is the exclusive seller of the patented drug Namenda, a therapy approved by the Food and Drug Administration (FDA) for the treatment of Alzheimer’s disease. In February 2014, the New York Attorney General’s office began an investigation into Forest’s business plans to withdraw Namenda from the market , which was protected by a patent due to expire in July 2015, and switch patients to Namenda XR, a similar drug with a longer patent. In response to the investigation, Forest produced documents and provided testimony which it designated as “highly confidential.”

In September 2014, the State filed a complaint relating to its investigation and, at Forest’s request, agreed to certain redactions of allegations referencing documents and testimony provided by Forest during the investigation. The defendants moved to maintain the sealed portions of the complaint as confidential, commercially-sensitive information.

A party seeking to seal materials has the burden to show good cause as to why the material should be concealed from the public, such as business information that might harm the party’s competitive standing in the market. In this case, the court noted that the defendants submitted an affidavit by a Forest internal medicine marketing executive, showing showed that the companies would be at a competitive disadvantage with those manufacturers who may seek to offer generic versions of the defendants’ branded drug. Thus, publication of allegations regarding profit projections, a business plan, promotional budget funds, internal projections, financial projections of alternative plans, income projections, and plans for the discontinuance of Namenda IR would competitively disadvantage the defendants.

However, the defendants’ affidavit failed to show that allegations with respect to emails reflecting the defendants’ regulatory strategy and a manufacturing process that was common knowledge would competitively disadvantage the defendants. Thus, they will not remain sealed, according to the court.

The case is No. 14 Civ. 7473.

Attorneys: Elinor R. Hoffman, New York State Office of the Attorney General, for the State of New York. Jack Pace, Martin Michael Toto, and Peter J. Carney (White & Case LLP) for Actavis plc and Forest Laboratories.

Companies: Actavis plc; Forest Laboratories

Cases: Antitrust NewYorkNews