Few courts have addressed antitrust challenges to pharmaceutical “product hopping,” i.e., the practice of shifting customers from a drug nearing the end of its patent protection to a modified version that is covered by newer patents and thus is protected from generic competition for a longer period of time. The Second Circuit recently became the first Court of Appeals to do so in People of the State of New York v. Actavis, Case No. 14-4624 (2d Cir. May 28, 2015). It upheld a preliminary injunction prohibiting Actavis from ceasing production of an Alzheimer’s drug in advance of its July 2015 patent expiration, a move Actavis intended to shift patients to an extended-release version of the drug which is patented through 2029. The decision has significant implications for the pharmaceutical industry and provides some guidance for branded pharmaceutical companies seeking to switch customers to a modified version of an older product or generic pharmaceutical companies seeking to challenge such conduct.

Legal Background -

Application of the antitrust laws to drug makers’ efforts to switch customers to a modified version of an older drug has been subject to much debate and little case law. Prior to the Second Circuit’s recent decision in Actavis, only a handful of lower courts had confronted the issue.