Ruling for Drug Maker Could Impact Generics Industry

The Office of the Assistant Secretary for Planning and Evaluation (ASPE), which advises the Department of Health and Human Services (HHS) on policy matters, released an analysis on the efforts of pharmaceutical companies to thwart generic competition as the market exclusivity period of one of its brand name drugs nears expiration. ASPE uses the recent litigation brought against Actavis with respect to its Alzheimer’s treatments—twice-daily Namenda IR and its new, once-daily formulation Namenda XR—to discuss the effect the company’s intended action could have on patient care and overall health costs. The company seeks to remove Namenda IR from the market before a generic can become available this summer and argues that the once-daily formulation provides an inherent advantage for patients and caregivers because it simplifies treatment. For now, however, a preliminary injunction is in place to stop Actavis from removing the older version from the market.

According to the ASPE analysis, if Actavis is allowed to remove Namenda IR before patent expiration, patients would be forced to switch to once-daily Namenda XR in order to avoid disrupting their treatment regimen. Theoretically, doctors would be able to switch their patients back to a twice-daily regimen once the generic comes to market. However, ASPE notes in its analysis that “in practice, such a switch could prove problematic for some patients and the providers who manage their care once patients become accustomed to the once-daily version.” Additionally, many states have laws in place that would restrict pharmacists from substituting Namenda XR for the twice-daily generic version without permission from a doctor.

According to the ASPE analysis, Actavis’ move to remove Namenda IR from the market, if allowed, could increase the cost burden borne by consumers and tax payers and could cost Medicare Part D and its beneficiaries up to $288 million in the last 6 months of 2015. Long term, the cost of covering Namenda XR is likely to skyrocket as the US population continues to age rapidly. It is estimated that the number of adults in the US older than 65 years with Alzheimer’s will reach 14.8 million by 2050, up from 4.7 million 2010. Recent data released by CMS showed that Namenda was one of the top 10 most-prescribed brand name drugs in 2013, with a total claim count of 6,878,399.

Experts are watching this case closely, as a decision in favor of Actavis could have wider implications on the future of generic availability.