Pharma Companies Sued Over Stopping Generic Versions of Narcolepsy Treatment

On Friday a case was filed in the Northern District of California by Molina Healthcare against a group of pharmaceutical companies, including Jazz Pharmaceuticals Inc., Hikma Pharmaceuticals PLC, Euoroehalth Inc., Amneal Pharmaceuticals LLC, Par Pharmaceuticals Inc., and Lupin Pharmaceuticals, Inc. The lawsuit alleges anti-competitive actions taken by Jazz Pharmaceuticals and the remaining defendants blocked generic versions of narcolepsy treatment Xyrem from the market.

Xyrem is also known as sodium oxybate, a chemical compound with a controversial history explained in the complaint. Better known as GHB, the complaint explained that it has been known to cause anteriorgrade amnesia in combination with alcohol and has been abused to facilitate sexual assault, to the point where it is one of the few chemical compounds to have earned a bifurcated status on the FDA drug schedule and is considered Schedule I for the purposes of illegal use and Schedule III when used for actual medical purposes. This has also resulted in restrictions on how the drug is dispensed to avoid diversion.

The complaint explained that an acknowledged medical purpose for the compound is in the treatment of narcolepsy; it can prevent random episodes of cataplexy and undesired sleeping. Due to its possible misuse, access to Xyrem is strictly controlled. These controls included giving only one pharmacy system permission to distribute the drug.

Jazz Pharmaceuticals acquired the original patents and New Drug Application (NDA) rights for Xyem in 2005. After the acquisition, Jazz filed numerous additional patents, which are a part of the subject of this suit, as well as NDA modifications to expand the class of conditions that Xyrem could be used to treat.

The plaintiffs accuse Jazz of raising the price on the treatment by more than 800 percent, from $2.04 to $19.40 per 1 milliliter dose. This resulted in a substantial burden on medical plans covering the treatment, such as the plaintiff. The complaint added that Jazz entered into unlawful reverse payment agreements with the co-defendants, hampering generic entry which could reduce the price. Additionally, Jazz patented the pharmacy distribution process that was set up to prevent the abuse of the product; these patents were eventually tossed out by the Patent Trial and Appeals Board, after years of litigation.

The plaintiffs point to these series of events as having an anti-competitive effect on the production of generic competition, especially this last set of patents, as they prevented competitors from entering the market by requiring they undertake the expense of setting up their own protected pharmacy system without infringing on the patents issued to Jazz, or negotiate for rights to use the Jazz patented system.

The plaintiffs alleged that through these patents “abusing” the FDA’s drug safety standards, sham litigation, and the aforementioned reverse payment agreements, Jazz has conspired to keep a generic version of the drug from reaching the market.

The plaintiffs are suing for conspiracy, restraint of trade, monopolization, and Cayton act violations. The plaintiffs are represented by Schneider Wallace Cottrell Konecky and Lowey Dannenberg, P.C.