Antitrust Claims Against Jazz and Hikma to Proceed in Price-Fixing Case

U.S. District Judge Richard Seeborg has ruled that drug manufacturers Jazz Pharmaceuticals and Hikma Pharmaceuticals must stand trial over price-fixing allegations contesting they conspired to delay the release of a generic version of Jazz’s popular narcolepsy medication, Xyrem. This decision, handed down late Monday in San Francisco, permits certain claims to proceed in the ongoing multidistrict litigation.

According to Reuters, the lawsuit involves major plaintiffs, including the Blue Cross Blue Shield Association, the city of Providence, Rhode Island, and the New York State Teamsters Council Health and Hospital Fund. These plaintiffs accuse Jazz of breaching U.S. antitrust laws by executing a financial arrangement that kept a generic competitor off the market longer than would have been the case otherwise. They also claim Jazz’s strategy of distributing Xyrem through a sole specialty pharmacy further hindered market competition.

While some claims have been dismissed, the ruling allows the case to advance on other fronts. Jazz Pharmaceuticals responded to the court’s decision by emphasizing that the judge had significantly reduced the scope of the plaintiffs’ allegations and maintained confidence in their defense. “The company is confident about the strength of its defenses,” Jazz stated on Tuesday.

Hikma Pharmaceuticals, which had U.S. regulatory approval for a generic Xyrem as early as 2017, settled a patent dispute with Jazz in the same year. The plaintiffs argue this settlement constituted an unlawful “reverse payment agreement,” which they allege delayed Hikma’s entry into the market with a generic version of Xyrem until last year. Hikma has yet to issue a comment on the recent court ruling.

Xyrem, a central nervous system depressant used to treat narcolepsy, has been on the market since 2002. Orphan Medical originally developed the drug, but Jazz acquired the company in 2005. Plaintiffs claim that Jazz raised Xyrem’s price by over 800% from 2007 to 2014, and that in 2021, Jazz generated more than $1.8 billion in revenue from the drug.

Jazz has defended its practices by pointing to regulatory approval for its distribution model and the availability of other narcolepsy treatments. The company has also highlighted its use of coupons and rebates to mitigate patient costs.

A status hearing for the case is set for October, which will likely provide further clarity on the next steps in this high-profile litigation.

Source: Reuters