Allergan has agreed to pay $750m to settle a lawsuit against its subsidiary Forest Laboratories regarding Namenda, an Alzheimer’s disease drug.
The class action litigation was scheduled for trial on 28 October and was filed by Namenda’s direct purchasers in the US District Court for the Southern District of New York.
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Allergan settled without accepting the misconduct. The Irish pharmaceutical company will book the pre-tax GAAP charge of $750m in the third quarter.
A statement from Allergan read: “The settlement makes no admission of wrongdoing on the part of the company and resolves the litigation that was scheduled to go to trial in October 2019.
“Under the settlement agreements, Forest will pay a total of $750m to the direct purchaser class, subject to finalisation of the settlement agreement and court approval.”
Allergan acquired Forest, known at the time as Actavis, in June 2014.
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By GlobalDataAccording to the lawsuit, direct purchasers of Namenda and Namenda XR claimed that Forest entered into an illegal agreement with Mylan to delay the entry of generics into the market.
Allegations also revealed that the company made a ‘hard switch’ product hop from Namenda, an immediate release formulation, to extended-release Namenda XR.
The purchasers said that Forest’s conduct led to loss due to delayed access to lower-priced generics.
Allergan develops pharmaceutical, biologic, surgical and regenerative medicine and device products across various therapeutic areas.
In June, the Irish company entered a definitive agreement to be acquired by AbbVie for a total consideration of approximately $63bn.
Allergan intends to leverage AbbVie’s commercial strength, expertise and international infrastructure to boost its product portfolio.
