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Preferred Citation: Friedman, Yali. The suit calls the strategy anticompetitive and illegal. Actavis was trying to "squeeze every last dollar out of their Namenda franchise Brought by a regulator, rather than a rival drug company, the lawsuit signals growing activism by government "at a time when patients, physicians, and payers are hyper-aware of rising drug costs," wrote Fenwick and West attorney Michael Shuster in an article about the case.
New York won an injunction in December that blocked the firm from limiting access to Namenda, a ruling appealed by the drugmaker and now before the U. Court of Appeals for the Second Circuit. A decision could come as soon as next month and may help define how far drugmakers can go to protect brand-name profits from generic rivals when their patents expire.
Dublin-based Actavis, which bought Namenda-developer Forest Labs last summer, said it has not violated any laws. It describes its moves as a common-sense business decision to shift customers to what it describes as a better, more convenient product. Actavis argues that the injunction benefits its generic rivals -- and stymies future drug innovation -- by forcing it to devote scarce resources to manufacturing and distributing a product that it wants to withdraw.
Efforts by drugmakers to bolster their market share in the face of generic competition are not new. But two things stand out about this case: Although five drugmakers say they will bring generics to market in July, there are currently no alternatives to Namenda or Namenda XR, since no other Alzheimer's drug works the same way. The drugs, which have the same active ingredient, slow the progression of symptoms in some patients but are not a cure.
The other concern is the company's effort to limit sales of its older drug before its patent expired. Patients who switched to the new drug were less likely to have their pharmacists or doctors substitute generics when those became available, critics say. Jerry Avorn, a professor at Harvard Medical School and author of "Powerful Medicines: The Benefits, Risks and Costs of Prescription Drugs," takes issue with the drugmaker's effort to require patients who wanted to stay on the older drug to get a doctor's note citing medical necessity.
Generics are seen as the bright spot in efforts to slow spending on healthcare. Because generics are lower-cost, most states have passed "substitution laws" allowing pharmacists to switch patients automatically to equivalent generics, unless a patient's prescription forbids such a change.
Insurers also push generic use by setting lower copayments for generics. Many companies have tried to outrun or thwart generic competition, sometimes by finding ways to extend patents, such as by reformulating drugs as extended release, or changing from tablets to capsules. In other cases, they have paid generic firms not to launch -- a tactic called "pay-for-delay" that the Supreme Court recently ruled could violate antitrust laws in some cases.
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