Jazz Pharmaceuticals Reaches $145 Million Settlement Over Alleged Efforts to Block Generic Xyrem

Jazz Pharmaceuticals has agreed to a $145 million settlement to resolve longstanding lawsuits accusing the company of hindering competition for its narcolepsy drug, Xyrem, by engaging in anti-competitive practices. The resolution, which still awaits court approval, could bring closure to years of legal battles stemming from allegations that Jazz used so-called “pay-for-delay” deals to suppress generic competition, according to PharmaPhorum.

The legal actions, which began surfacing as early as 2020, were consolidated into multidistrict litigation (MDL) and involve a range of plaintiffs including Blue Cross Blue Shield Association, the city of Providence, Rhode Island, and the New York State Teamsters Council Health and Hospital Fund, per Reuters. The lawsuits alleged that Jazz struck reverse payment agreements with potential rivals, thereby unlawfully extending its monopoly on Xyrem (sodium oxybate), a treatment approved in the U.S. since 2002 for excessive daytime sleepiness and cataplexy in people with narcolepsy.

The company, which is headquartered in Ireland, confirmed the proposed class settlement in a financial filing. Jazz noted it intends to cover the $145 million cost using available cash and expects to record the expense in its first-quarter 2025 financial results. While Jazz denies all allegations of misconduct, it stated it would “vigorously” defend itself should the settlement fail to receive court approval.

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Xyrem, a high-sodium formulation of sodium oxybate, saw peak U.S. sales of $1.7 billion in 2020. However, revenue has declined sharply, falling to approximately $234 million in 2024. Despite this drop, Jazz still generated an additional $218 million from royalties on authorized generic versions of the drug. Hikma Pharmaceuticals and Amneal Pharmaceuticals have both launched authorized generics of Xyrem, with Hikma entering the market in early 2023 and Amneal following shortly after.

Jazz had previously protected Xyrem’s market position through a combination of patent litigation and exclusivity strategies, maintaining its stronghold until patent protection expired in February 2023. The original formulation of sodium oxybate was first synthesized roughly a century ago, but Jazz’s version was protected through specific uses and delivery methods.

As Xyrem’s dominance fades, Jazz has shifted its focus to Xywav, a lower-sodium alternative designed to address health concerns linked to sodium intake. Xywav generated $1.47 billion in sales last year, growing 16% and remaining protected by patents in the U.S.

Source: PharmaPhorum