On September 16, 2014, New York Attorney General Eric Schneiderman announced a lawsuit seeking to prevent Actavis plc and its subsidiary Forest Laboratories from forcing Alzheimer's patients to switch medications as part of an anticompetitive strategy known has product hopping. Product hopping occurs when brand name pharmaceutical companies make modest reformulations that offer little or no therapeutic advantages to a patented drug shortly before the patent is set to expire and generic manufacturers can enter the market. The branded drug company then withdraws its original product from the market and forces consumers to switch to the reformulated brand drug. Because pharmacies cannot automatically substitute generic versions of the original product for the reformulated product, the branded company keeps its market exclusivity and consumers do not obtain the benefits of generic competition.

AG Schneiderman alleged that Actavis is engaging in product hopping by:

AG Schneiderman alleged that this practice will allow Actavis to insulate its profits from competition because, even after the Namenda generics come to market, patients are unlikely to switch to the generics due to practical difficulties. In particular, even though Namenda and Namenda XR have the same active ingredient, pharmacists will not be able to offer generic Namenda to patients without a doctor's approval.

AG Schneiderman disregarded Actavis' reasoning that Namenda XR is a superior drug because it can be taken once a day instead of twice. Rather, the lawsuit alleged that Actavis is seeking to protect its profits by blocking competition from generic manufacturers.

The Federal Trade Commission has noted that product hopping may deserve antitrust scrutiny. For more information on the FTC's position, see Legal Update, FTC Commissioner Ramirez Delivers Testimony on Key FTC Antitrust Enforcement Efforts.