Jazz Pharma accused of pay-for-delay deals over Xyrem
Molina Healthcare claims that Jazz Pharmaceuticals delayed generics of its flagship narcolepsy drug Xyrem (sodium oxybate) and hiked the drug prices to increase profits when it was on the verge of bankruptcy.
The Calfornia-based healthcare coverage company said Jazz violated antitrust laws by striking pay-for-delay deals with Hikma Pharmaceuticals, Par Pharmaceuticals, and Lupin in order to maintain its monopoly, in a complaint filed with the US District Court for the Northern District of California on 10 October.
It claims that Jazz also “manipulated” an FDA safety programme meant to mitigate safety risks of drugs (REMS), engaged in “sham” litigation, and abused the REMS process to frustrate generics manufacturers in order to maintain its monopoly.
Alongside this, Jazz imposed “grotesque” price hikes that would not have been possible if a generic entry into the market had been successful, causing buyers to pay inflated prices for Xyrem since July 2017.
According to the complaint, Xyrem has historically been Jazz’s main source of revenue, making up 70% or more of its revenues since 2007.
“Jazz’s growth and profits have been entirely linked to its ability to increase prices on Xyrem and keep the market to itself,” Molina said.
Delaying generics
Orphan Medical began developing Xyrem in 2002 and obtained approval to market the drug from the Food and Drug Administration in 2005 and Jazz acquired Orphen the same year.
According to the complaint, the acquisition was unprofitable and by 2007, Xyrem had reported a net loss of $138.8 million according to its annual report that year.
Jazz was on the verge of bankruptcy in 2009 leading the pharmaceutical company to institute a series of “epic” price hikes to drive profits, Molina claimed.
Between 2007 and 2014, Jazz increased prices by 841% according to Bloomberg data cited in the complaint.
Generic manufacturer Roxane, which was later acquired by Hikma, submitted an Abbreviated New Drug Application (ANDA) in 2010 for a generic of Xyrem. This led Jazz to sue Himan in November 2010, claiming that the ANDA infringed on five patents related to Xyrem.
After nearly seven years of attempting to bring a generic to market, Hikma agreed to buy and re-label Xyrem rather than manufacture a generic, which delayed its entry into the market until at least July 2023.
Molina seeks a jury trial and damages for the inflated prices at an amount to be determined at court.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox.