Providence files lawsuit alleging anti-competitive conspiracy related to narcolepsy drug

PROVIDENCE – The City of Providence has filed a class-action lawsuit against several pharmaceutical companies alleging violations of state antitrust, consumer protection and unjust enrichment laws related to the narcolepsy drug Xyrem, according to court documents filed Thursday.

The defendants, Jazz Pharmaceuticals PLC, Roxane Laboratories Inc., West-Ward Pharmaceuticals Corp., Hikma Labs Inc., and Hikma Pharmaceutical PLC are alleged to have conspired to delay generic competition in the United States for the treatment of cataplexy and daytime sleepiness in patients with narcolepsy.

The active ingredient in Xyrem is sodium oxybate.

Providence asserts that the companies obtained invalid and unenforceable patents, improperly listed the patents in the Federal Drug Administration’s Orange Book, prosecuted “sham litigation based on fraudulent, invalid or unenforceable patents” and settled lawsuits with payments in exchange for promises to delay the entry of companies in the generic manufacturing of the drug.

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The lawsuit claims that Jazz Pharmaceuticals, the owner of Xyrem, has raised the price of the drug from $2.04 per milliliter to $29.69 per milliliter since 2007. A patient taking a dosage in the middle of the effective range was said to now incur costs of $13,000 monthly for the drug.

The lawsuit said that net sales of Xyrem were $1.64 billion in 2019, representing 76% of Jazz’s total revenue for that year.

The company is alleged to have offered several companies payments to delay entering the generic market in exchange for exclusivity to sell authorized generics. The delay of entry of a generic into the market was alleged to have allowed Jazz Pharmaceuticals to make “supracompetitive profits,” the lawsuit said. 

The suit alleges that without these agreements, class members would have been able to purchase less expensive generic sodium oxybate as early as 2017. Currently, Jazz Pharmaceuticals has complete exclusivity of the drug until 2023, the lawsuit said. Full generic competition was alleged to not be possible until December of 2025, the lawsuit said.

The lawsuit seeks relief for the class in the lawsuit equitable for what it called the defendant’s “ill gotten gains” as well as for costs related to the lawsuit.

Providence was suing in its capacity as a self-insured health and welfare benefit plan that purchases, pays and/or provides reimbursement for some or all of the purchase price of prescription drugs for its employees, retirees, and/or plan beneficiaries. It also said that it has purchased, paid and/or provided reimbursement for Xyrem in Rhode Island.

Jazz Pharmaceuticals declined to comment on the lawsuit.

Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.