U.S. judge rules Actavis must continue to sell Alzheimer's drug

(Reuters) - A U.S. judge ruled on Thursday that Actavis Plc must continue to sell its Alzheimer's drug in a lawsuit alleging that the company was scheming to limit generic competition while it launched an extended-release version of the widely used drug.

In September, New York Attorney General Eric Schneiderman sued Actavis and its New York-based subsidiary, Forest Laboratories, to stop the company from discontinuing sales of the drug, which is due to lose patent protection next year.

The company planned to withdraw Namenda IR from the market in August to focus sales on its new but similar drug, called Namenda XR, which is taken once instead of twice daily, according to the lawsuit.

The older version of the medication faces competition from generic drug makers starting in July 2015, according to the complaint.

The move, also called a "forced switch," asks doctors to transition patients to Namenda XR, which will not face generic competition for years.

The case is People of the State of New York v. Actavis Plc and Forest Laboratories LLC, U.S. District Court, Southern District of New York 14-cv-7473.

(Reporting by Deena Beasley and Karen Freifeld; Editing by Lisa Shumaker)