Jazz Pharmaceuticals Plc (JAZZ) and Hikma Pharmaceuticals Plc (HKMPF, HKMPY) are facing allegations of an antitrust conspiracy to delay the release of a generic version of Jazz’s blockbuster narcolepsy drug, Xyrem. This alleged conspiracy, according to the plaintiffs, led to higher prices for health plans. Narcolepsy, a rare and chronic neurological disorder, affects the brain’s ability to regulate sleep-wake cycles.
The ruling, issued by U.S. District Judge Richard Seeborg in California, allows the case to proceed to trial, although some claims have been dismissed. The plaintiffs, including Blue Cross Blue Shield Association, the city of Providence, Rhode Island, and the New York State Teamsters Council Health and Hospital Fund, contend that Jazz violated U.S. antitrust laws. Their claims allege that Jazz made payments to delay the entry of a rival generic drug and monopolized distribution through a single specialty pharmacy.
According to Reuters, the plaintiffs also claim that Jazz significantly increased the price of Xyrem by more than 800% between 2007 and 2014. In 2021, Xyrem generated over $1.8 billion in revenue for Jazz.
Jazz has refuted the allegations, stating that the judge’s order significantly reduced the plaintiffs’ claims and expressing confidence in their legal defenses. The company also argued that its distribution strategy was approved by a U.S. regulatory agency and highlighted the availability of alternative narcolepsy treatments.
Hikma’s generic version of Xyrem only entered the market last year, following a 2017 settlement that the plaintiffs allege was an unlawful “reverse payment agreement” designed to delay competition. A status hearing for the case is scheduled for October.
As of Wednesday, JAZZ stock is up 0.49% at $115.38.
This case highlights the ongoing debate surrounding drug pricing and the role of generic competition in making essential medications more accessible. The outcome of the trial could have significant implications for the pharmaceutical industry and the affordability of prescription drugs.
