A Threat to Drugmakers’ Hard Switch

Actavis, maker of the blockbuster Alzheimer’s drug Namenda, isn’t the first pharmaceutical company to attempt what’s known in the industry as product hopping or the hard switch. Facing the loss of patent protection and profits on top-selling brands, drugmakers sometimes stop or sharply limit sales of drugs to force consumers to switch to a somewhat modified, newly patented version before generic rivals have a chance to get into the market.

The practice is under the spotlight in a high-profile antitrust case brought against Actavis by New York Attorney General Eric Schneiderman. Last December he persuaded a federal district court to issue an injunction preventing Actavis from halting sales of its original Alzheimer’s drug in favor of a new slow-release version. Actavis has appealed the ruling, and the U.S. Court of Appeals for the Second Circuit in New York will hear oral arguments on April 13.