Allergan, Merz Must Face Namenda “Pay to Delay” Antitrust Suit

A police officers’ benefit fund may represent a class of insurers and other indirect pharmaceutical purchasers on allegations that Allergan‘s Forest Laboratories unit and Merz GmbH improperly delayed the entry of less expensive generic versions of the Alzheimer’s drug Namenda, a federal court in New York ruled.

But the court denied class certification for a second theory advanced by the Sergeants Benevolent Association Health & Welfare Fund—that the companies acted anticompetitively by forcing patients to switch to a still-patented “extended release” version of the branded drug before losing all its customers to generic-drug manufacturers.

Plaintiffs in the lawsuit allege that Allergan unit Forest Laboratories orchestrated what’s known as a “hard switch” or “product hopping.” Forest—led at the time by Allergan CEO Brent Saunders—had planned to pull Namenda off the market ahead of its patent expiration to force patients to switch to Namenda XR, its newer, extended-release version.

The purchasers sued Forest after the tactic drew unwelcome attention from then-New York Attorney General Eric Schneiderman. The AG sued the company in 2014 after the forced-switching plan went public, arguing the tactic was illegal under antitrust law. Allergan, then known as Actavis, bought Forest in July 2014.

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