Actavis, which got Namenda through its acquisition of Forest Labs, is employing a strategy known as a "hard" or "forced switch." It's a technique employed with increasing frequency in the drug industry as part of product life-cycle management, Sanford C. Bernstein analyst Ronny Gal said.
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"That would be kind of equivalent to Apple introducing the iPhone 6 and then making all the iPhone 5s stop working," Gal explained.
Namenda drew $1.5 billion in revenue in fiscal 2014, so preventing erosion of those sales to cheaper generic copies is in the company's interest. Namenda's patent expires next year, while Namenda XR has protection through 2029.
The company is counting on it being difficult for patients to switch medications again once generic copies of the twice-a-day Namenda hit the market, after they've already switched to the once-a-day formulation, the attorney general said in a statement Tuesday.
"A drug company manipulating vulnerable patients and forcing physicians to alter treatment plans unnecessarily simply to protect corporate profits is unethical and illegal," Schneiderman said.
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Actavis declined to comment on the suit, but said in a statement that Namenda XR "has significant advantages over twice-a-day Namenda that are particularly meaningful for Alzheimer's patients and their caregivers."
That the drug is for a particularly vulnerable population of mostly elderly patients with dementia makes the situation worse, said Art Caplan, a bioethicist at New York University.
"One of the particularly morally pernicious aspects of trying to do a forced switch is you're doing it in a group of moderate to severely impaired people with Alzheimer's," Caplan said in an interview. "The hard switch, I think, is fundamentally unethical."
The problem is, it works. Gal said the hard switch is more effective than a soft switch, which involves introducing the newer product without pulling the older one from the market before generics hit.