Judge makes ruling in Alzheimer's drug case

Judge delivers blow to maker of Alzheimer's d... 02:03

The company behind the Alzheimer's drug Namenda has lost a legal battle. Earlier this month a judge ruled in favor of New York State Attorney General Eric Schneiderman, who filed an antitrust lawsuit against Forest Laboratories. The suit followed a CBS News investigation in August into why a version of the company's drug was being taken off the market.

Mike Hitch, 54, has early onset dementia and spent much of the last year worrying. That's because last February, Forest Laboratories announced it planned to stop selling the Alzheimer's drug he relies on.

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Namenda user Mike Hitch CBS News

"They are yanking the rug right out from under me," Hitch told me at the time.

The drug, called Namenda IR, is due to go generic next July. But Forest Laboratories had planned to stop selling the twice-daily drug many months before a less expensive generic product could become available.

When a drug goes generic, the price usually drops 70 to 80 percent. In 2013, Namenda revenues were about $1.5 billion.

The company asked doctors to switch patients to a once-daily version called Namenda XR - which currently has patent protection for another 15 years.

"Forced switch" maneuver spurs suit against d... 02:55

It's a strategy called "forced switch." Brent Saunders, CEO of Actavis, the parent company of Forest Laboratories, said this about Namenda during an investor conference call last January: "We believe that by potentially doing a forced switch, we will hold on to a large share of our base users."

"They have no excuse whatsoever to stop making that drug available, none," said Hitch.

On September 15th, the New York state attorney general, Eric Schneiderman, filed a federal lawsuit against Actavis, claiming the forced switch impeded competition from cheaper generic drugs. This month, Judge Robert W. Sweet announced the company must continue selling Namenda IR.

"Defendants are entitled to a just return on their investment in Namenda IR, but having enjoyed that return for over a decade, the law now requires them to allow generic competitors a fair opportunity to compete," said Judge Sweet in his ruling.

Forest Laboratories said it was disappointed in the ruling, which it called "unprecedented." They plan to appeal.

  • Jon Lapook
    Jonathan LaPook

    Dr. Jonathan LaPook is the chief medical correspondent for CBS News. Follow him on Twitter at @DrLaPook