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Allergan drops appeal in Alzheimer’s drug antitrust lawsuit

State Attorney General Eric Schneiderman is declaring victory in a 2014 antitrust case against drug maker Allergan PLC.

Allergan, along with its Forest Laboratories Inc. and Actavis PLC subsidiaries, tried to force Alzheimer’s patients to take a higher-priced drug, the lawsuit alleged.

Allergan has agreed to settle the case and will drop plans to mount further appeals,
Schneiderman said Wednesday. The company confirmed the agreement and, while admitting no wrongdoing, said it would pay approximately $172,000 to cover some of the state’s expenses.

Allergan had announced plans in February 2014 to pull its blockbuster Alzheimer’s drug, Namenda IR, off the market and switch patients to a close analog, Namenda XR.

The switch, slated to come as Namenda IR’s patents were due to expire, would have discouraged patients from switching to a cheaper generic version, the attorney general’s antitrust bureau charged in a lawsuit filed in the federal Southern District of New York in September 2014.

Substituting the patent-protected analog for Namenda IR would effectively destroy any market for cheaper generic versions, the state antitrust lawyers claimed.

In December 2014, a federal judge in New York sided with the state, issuing an injunction halting Allergan’s plan to take Namenda IR off the market. That cleared the way for pharmacists to fill Namenda IR prescriptions with generics without first asking for the prescribing doctor’s approval.

The injunction expired last August, but Schneiderman this week said Allergan agreed to abandon plans to fight the case further.

“The lawsuit will be dismissed, and Allergan will withdraw its request for U.S. Supreme Court review of the decisions issued in favor of the attorney general,” Schneiderman said.
 
The Namenda IR announcement comes two days after Pfizer Inc. and Allergan—headed by former Bausch & Lomb Inc. CEO Brent Saunders—announced plans to merge.

Saunders left B&L when the eye-care company was acquired by Valeant Pharmaceuticals International Inc. in 2013. He then moved to Forest Labs as its CEO and went on to arrange Forest Labs’ merger with Actavis last year and the combined firms’ merger with Allergan this year.

The proposed merger between Allergan and Pfizer would create the world’s largest drug company. The deal has drawn heavy fire from critics including presidential hopefuls from both sides of the aisle.

The main sticking point for such critics is that the deal would let Pfizer slough off much of its U.S. corporate-tax obligation in a so-called tax inversion that would move its nominal headquarters to Ireland.
    
(c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.
 

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