Popular Alzheimer's drug to remain on the market at least until August

A federal appeals court has temporarily thwarted a drug company's plan to replace a proven Alzheimer's drug with a more expensive version.

Dublin-based Actavis plc earlier announced plans to drop Namenda IR and replace it with a similar, though newer extended release version called Namenda XR. It's a tactic federal prosecutors have labeled “product hopping,” a strategy they say pharmaceutical companies have used to extend patent exclusivity. Both versions of Namenda have memantine as their active ingredient.

New York State Attorney General Eric Schneiderman sued the drugmaker, claiming its plan would stifle competition from generic drug companies. The 2nd U.S. Circuit Court of Appeals last Friday agreed, saying the plan "crosses the line from persuasion to coercion and is anticompetitive.”

A generic formulation of Namenda was approved by the FDA in March 2012. The court upheld U.S. District Judge Robert Sweet's earlier injunction prohibiting Actavis from taking Namenda IR off the market until 30 days after generic versions launch in July, arguing that it would give patients time to evaluate whether Namenda XR was worth the extra cost over a generic version of Namenda IR, Reuters added.

Actavis assured investors that it would continue to manage sales and development expenses to ensure the decision has "minimal to no impact" on earnings, Reuters reported. Nearly 30 states now require pharmacists to substitute a generic drug for a brand-name drug whenever an exact equivalent is available.

Namenda is one of only five drugs that are currently approved by the FDA to specifically treat Alzheimer's disease, according to Consumer Reports.