Dive Brief:
- Allergan will pay $750 million to direct and indirect purchasers of its Alzheimer's disease medication Namenda, resolving a class action suit that alleged the Ireland-domiciled company tried to prevent or delay entry of generic competitors. The suit was filed after the New York attorney general won a settlement making similar charges.
- The trial was scheduled to begin by the end of October. Allergan said it will take a $750 million charge to its third-quarter earnings to account for the settlement.
- AbbVie is in the process of acquiring Allergan, with the goal of closing the transaction in the first quarter of 2020. The Federal Trade Commission has put that $63 billion deal under additional review.
Dive Insight:
Namenda (memantine) came into the Allergan portfolio when Actavis — the previous name for the corporate entity now known as Allergan — purchased Forest Laboratories. That transaction also brought with it Brent Saunders, who now heads the big pharma group.
In 2014, the New York attorney general filed a lawsuit alleging Forest tried to delay or prevent generic competition to Namenda as it prepared to launch the extended release formulation Namenda XR. The state claimed Forest tried to pull the orginal formulation from shelves before its patent expired in order to force patients to switch onto XR ahead of generic entry.
Before going to court, Forest settled the case for $172,000 in investigation and prosecution costs. That settlement triggered the action filed on behalf of the purchaser class, which made the same claims and also asserted that settlements with generic companies delayed entry, too.
Generic competitors to Namenda XR entered the market in February 2018. In 2017, the last full year ahead of Namenda XR generic entry, Allergan reported $453 million in sales for both the immediate and extended release formulation.
The Namenda class action will be one less antitrust-related headache for AbbVie as it seeks to close the Allergan acquisition. That transaction itself is facing additional antitrust scrutiny as the FTC made a "second request" for documents and testimony.
In order to pass antitrust muster, AbbVie had pledged to divest the Allergan pipeline project brazikumab because it has the same mechanism of action as AbbVie's recently launched Skyrizi (risankizumab).