allergan-signs-$750-million-settlement-with-purchasers-of-alzheimer’s-drug-namenda

Allergan signs $750 million settlement with purchasers of Alzheimer’s drug Namenda

Health

NEW YORK (Reuters) – Purchasers of Allergan Plc’s Namenda asked a federal judge on Tuesday to approve a $750 million settlement of claims that the drugmaker conspired to keep generic versions of the Alzheimer’s medication off the market.

Lawyers for the plaintiffs said the preliminary settlement, which requires a judge’s approval, would be the largest amount paid by one defendant to resolve a class action brought by “direct purchasers” under the federal Hatch-Waxman antitrust law, which encourages the manufacture of generic drugs.

The purchasers accused Allergan’s Forest Laboratories unit of paying a rival to delay selling generic Namenda IR and encouraging them to switch to an extended release medication, Namenda XR, before generic Namenda IR became available.

Allergan denied wrongdoing in agreeing to the settlement, which its lawyers signed on Dec. 20.

The Dublin, Ireland-based company previously took a related $750 million pre-tax charge in its third-quarter results.

Forest was acquired in June 2014 by Actavis Plc, which changed its name to Allergan in June 2015.

Namenda treats moderate to severe dementia in people with Alzheimer’s disease. Sales of generic Namenda IR began in July 2015 and generic Namenda XR in March 2018, Allergan has said.

The settlement covers those in the United States who purchased Namenda IR, Namenda XR or generic Namenda IR directly from Forest, Actavis or Allergan from June 2012 to September 2015.

It requires approval by Chief Judge Colleen McMahon of the U.S. District Court in Manhattan.

The purchasers’ lawyers may seek legal fees of up to one-third of the settlement fund, including interest but net of expenses and other sums, court papers show.

The case is In re Namenda Direct Purchaser Antitrust Litigation, U.S. District Court, Southern District of New York, No. 15-07488.

Reporting by Jonathan Stempel in New York; Editing by Dan Grebler