Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) and Hikma Pharmaceuticals Plc (OTC:HKMPF) (OTC:HKMPY) are set to face allegations that they conspired to delay the release of a generic version of Jazz’s blockbuster narcolepsy drug, Xyrem, resulting in higher prices for health plans.
Narcolepsy is a rare, chronic neurological disorder that affects the brain’s ability to control sleep-wake cycles.
The ruling, issued by U.S. District Judge Richard Seeborg in California, allows the case to proceed to trial, though some claims have been dismissed.
Also Read: Why Is Jazz Pharmaceuticals Stock Trading Lower On Thursday?
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, argue that Jazz violated U.S. antitrust laws.
They allege that the company made monetary payments to delay the entry of a rival generic and monopolized distribution using a single specialty pharmacy.
Reuters report notes that 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 denied the allegations, stating that the judge’s order significantly reduced the plaintiffs’ claims and expressed confidence in its legal defenses.
The company also argued that its distribution strategy was approved by a U.S. regulatory agency and emphasized that other narcolepsy treatments are available.
Hikma’s generic version of Xyrem only reached 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.
Price Action: JAZZ stock is up 0.49% at $115.38 at last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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