Allergan said Monday that its Forest Laboratories units reached an agreement to pay $750 million to settle antitrust class action litigation in the US with direct purchasers of Namenda (memantine), a treatment for moderate-to-severe dementia associated with Alzheimer's disease. The company noted that the settlement, which makes no admission of wrongdoing on its part, resolves litigation in the District Court for the Southern District of New York that was scheduled for trial this month.
The lawsuit accused the Forest units of seeking to delay generic competition for Namenda, which initially gained FDA approval in 2003, including entering into an illegal arrangement with Mylan. Forest discontinued twice-daily Namenda in 2014 and an agreement was announced days later for the company to be acquired by Allergan, then known as Actavis. Namenda was replaced with a once-daily formulation before a generic version of the drug was launched in 2015.
The plaintiffs in the class action alleged that the decision to discontinue the older formulation caused patients to switch to the newer one in advance, forcing direct purchasers to pay for Namenda for patients who would otherwise have been taking the generic version.
Allergan indicated that the $750-million pre-tax charge will be booked to its third-quarter earnings for this year. In 2016, the drugmaker agreed to pay the US government $38 million to settle a federal probe into sales and marketing practices by Forest involving Namenda, as well as the hypertension therapy Bystolic (nebivolol) and fibromyalgia treatment Savella (milnacipran).
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