UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION

BLUE CROSS AND BLUE SHIELD 

ASSOCIATION, IN ITS CAPACITY AS 

THE CARRIER FOR THE SERVICE 

BENEFIT PLAN, A/K/A THE “FEDERAL 

EMPLOYEE PROGRAM,” A FEDERAL 

EMPLOYEE HEALTH BENEFITS ACT 

PLAN,” 

Plaintiff, 

v. 

JAZZ PHARMACEUTICALS PLC, JAZZ 

PHARMACEUTICALS, INC., JAZZ 

PHARMACEUTICALS IRELAND 

LIMITED, HIKMA PHARMACEUTICALS 

PLC, ROXANE LABORATORIES, INC., 

HIKMA PHARMACEUTICALS USA INC., 

AND EUROHEALTH (USA), INC., 

AMNEAL PHARMACEUTICALS LLC, 

PAR PHARMACEUTICAL, INC., LUPIN 

LTD., LUPIN PHARMACEUTICALS INC., 

AND LUPIN INC., 

Defendants. 

Case No. 1:20-cv-03543 

JURY TRIAL DEMANDED 

CLASS ACTION COMPLAINT

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TABLE OF CONTENTS 

I. INTRODUCTION ...............................................................................................................1

II. PARTIES .............................................................................................................................2

III. JURISDICTION AND VENUE ..........................................................................................7

IV. REGULATORY FRAMEWORK .......................................................................................8

A. The regulatory structure for approval and substitution of generic drugs. ................8

1. The Hatch-Waxman Amendments. ..............................................................9

2. Regulatory exclusivities for new drugs......................................................10

3. Abbreviated New Drug Applications and paragraph IV 

certifications. ..............................................................................................11

4. The first filer’s 180-day exclusivity period. ..............................................12

5. Patents are subject to judicial and administrative scrutiny. .......................13

6. REMS programs encourages drug manufacturers to work 

cooperatively to establish single, shared programs. ...................................15

7. Citizen Petitions. ........................................................................................18

B. The competitive effects of AB-rated generic and authorized generic 

competition. ...........................................................................................................19

1. The first AB-rated generic is priced below the brand. ...............................20

2. Later generics drive prices down further. ..................................................21

3. Authorized generics, like other generics, compete on price. .....................22

C. Manipulation of the regulatory structure to impair competition. ...........................24

1. No-AG agreements provide a means for brand and generic 

manufacturers to share the gains from conspiring. ....................................27

2. Manufacturers also use anticompetitive “acceleration” clauses to 

delay competition. ......................................................................................32

V. FACTS ...............................................................................................................................34

A. The development and approval of Xyrem. ............................................................34

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B. The patents ostensibly covering aspects of Xyrem or its use. ...............................36

1. The ’431 family of patents claim processes for making Xyrem, 

formulations of Xyrem, and methods of using Xyrem. .............................36

2. The’730 family of patents claim methods of tracking prescriptions 

of a sensitive drug through a computer database. ......................................38

3. The ’302 family of patents claim methods of treating sleep 

disorders with sodium oxybate in patients who are also taking 

divalproex sodium. .....................................................................................39

C. The Jazz lawsuits against Roxane/Hikma. .............................................................40

D. The Jazz “single pharmacy” REMS program for Xyrem ......................................44

E. The Jazz 2012 citizen petitions to the FDA. ..........................................................48

F. The Jazz lawsuits against at least eight other generic companies. .........................50

G. The notorious Jazz price increases for Xyrem. ......................................................51

H. The patents in the ’730 family are found invalid. ..................................................54

I. Hikma obtains final ANDA approval for generic Xyrem. .....................................56

J. The Jazz-Hikma reverse payment agreement. .......................................................57

K. Jazz enters into unlawful reverse payment agreement with Par, Lupin, and 

Amneal. ..................................................................................................................69

L. Jazz plans for a “product hop” from Xyrem to a successor brand as the 

final step to in its anticompetitive scheme. ............................................................76

M. Since its launch in 2002, Xyrem has been dispensed through a single 

specialty pharmacy operated by Express Scripts, to which title passes only 

momentarily. ..........................................................................................................79

VI. MARKET POWER AND DEFINITION ..........................................................................81

VII. MARKET EFFECTS .........................................................................................................84

VIII. ANTITRUST IMPACT AND IMPACT ON INTERSTATE COMMERCE....................85

IX. INTERSTATE AND INTRASTATE COMMERCE ........................................................87

X. CLASS ACTION ALLEGATIONS ..................................................................................88

XI. CLAIMS FOR RELIEF .....................................................................................................91

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XII. DEMAND FOR JUDGMENT .........................................................................................126

XIII. JURY DEMAND .............................................................................................................127

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I. INTRODUCTION 

1. This civil antitrust action for damages and injunctive relief alleges Jazz 

Pharmaceuticals—the drug company that makes and sells the narcolepsy drug Xyrem (sodium 

oxybate) that has current sales in excess of $1.4 billion per year—executed an overall 

anticompetitive scheme to impair and delay generic competition in the market for sodium 

oxybate oral solution. The scheme culminated in a series of payoffs to Jazz’s would-be generic 

competitors, including the first-filer generic Hikma, that constitute unlawful market allocation 

agreements and anticompetitive reverse payments under FTC v. Actavis Inc., 570 U.S. 136 

(2013). 

2. The plaintiff is a national health plan. Blue Cross and Blue Shield Association 

sues in its capacity as the carrier of the Service Benefit Plan a/k/a the Federal Employee Program 

which covers roughly 5.3 million federal employees, retirees and their families out of the nearly 

8 million people who receive their benefits through the Federal Employees Health Benefits 

Program. 

3. The defendant brand companies are Jazz Pharmaceuticals, Inc., Jazz 

Pharmaceuticals Ireland Limited, and Jazz Pharmaceuticals Public Limited Company 

(collectively, “Jazz”). The defendant generic companies are Roxane Laboratories, Inc., Hikma 

Pharmaceuticals USA Inc. (formerly known as West-Ward Pharmaceuticals Corp.), Eurohealth 

(USA), Inc., and Hikma Pharmaceuticals plc (collectively, “Hikma”), which are all related 

companies, and Amneal Pharmaceuticals LLC (“Amneal”), Par Pharmaceuticals, Inc. (“Par”), 

and Lupin Ltd, Lupin Pharmaceuticals Inc., and Lupin, Inc. (collectively “Lupin”). 

4. For much of the latter half of the 18 years that Xyrem has been on the U.S. 

market, Jazz committed a series of anticompetitive acts designed to impair or delay generic entry 

in the market for sodium oxybate oral solution. These acts include acquiring and enforcing bogus 

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patents, prosecuting citizen petitions before the FDA that had no realistic likelihood of success, 

and abusing the REMS-related FDA approval conditions for Xyrem to frustrate efforts by wouldbe generic competitors to gain FDA approval for their own generic versions of the product. In 

recent years, Jazz crafted a series of unlawful market allocation agreements with its would-be 

generic competitors. Under an early 2017 agreement, Jazz persuaded Hikma (the first company 

to file for approval for generic Xyrem) to withdraw meritorious challenges to Jazz’s patents and 

delay entry of Hikma’s FDA-approved sodium oxybate generic until at least 2023, a period of 

about eight years. In exchange, Jazz promised Hikma that, when Hikma eventually did enter the 

market, Jazz would withhold competition from an “authorized generic” launched by Jazz. In 

agreements with other generics, Jazz carved the market through explicit limited supply 

distributorships, effectively ensuring the continued high prices for Xyrem through volumelimited supplies provided by Jazz to its would-be competitors. In exchange, these generics, too, 

dropped meritorious patent challenges and agreed to postpone generic entry for years. 

5. Through Jazz’s overarching anticompetitive scheme and by the unlawful payoffs 

to its would-be competitors, generic competition in the market for sodium oxybate oral solution 

was impaired and delayed, perhaps as long as until the end of 2025. Absent the unlawful 

conduct, unimpaired competition in that market would have begun as early as January 2018. 

Meanwhile, the plaintiff health plan and all other members of the proposed class have paid, and 

continue to pay, massive overcharges for Xyrem. On behalf of itself and all others similarly 

situated, the plaintiff seeks damages and injunctive relief. 

II. PARTIES 

6. The plaintiff Blue Cross and Blue Shield Association (“BCBSA”) is a national 

association of 36 independent and locally operated Blue Cross and Blue Shield companies 

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providing health plans to over 107 million members nationwide. BCBSA’s principal place of 

business is located at 225 North Michigan Ave., Chicago, IL 60601. 

7. BCBSA brings this action in its capacity as the carrier of the Service Benefit Plan 

a/k/a the Federal Employee Program (“FEP”), one of the Federal Employee Health Benefits 

Plans (“FEHBP”). Beginning in 1960, the Office of Personnel Management (“OPM”) contracted 

with BCBSA under the Federal Employees Health Benefits Act (“FEHBA”) to establish the 

government-wide FEHBP known as the Service Benefit Plan, also commonly known as the FEP. 

The FEP has the largest enrollment of any FEHBP. Pursuant to plan participation agreements 

between BCBSA and BCBS companies, BCBSA contracts with OPM for BCBS companies to 

underwrite and administer the FEP in their individual locales. However, BCBSA pays for drugs 

purchased by FEP enrollees through BCBSA’s pharmacy benefits manager, including the drugs 

at issue in this case. As the carrier under the contract with OPM and under the plan participation 

agreements, BCBSA has the sole authority to make decisions to bring actions on behalf of the 

FEP. 

8. During the class period, FEP purchased, and/or reimbursed for thousands of 

prescriptions of, Xyrem, i.e., sodium oxybate oral solution approved under the Xyrem NDA, at 

supracompetitive prices in multiple of the jurisdictions set forth in counts 7 through 13 of this 

complaint and therefore suffered antitrust injury as a result of the anticompetitive conduct 

alleged in this complaint.

9. The defendant Jazz Pharmaceuticals, Inc. is a corporation organized and existing 

under the laws of the State of Delaware, with its principal place of business at Waterloo 

Exchange, Waterloo Road, Dublin 4, Ireland. Its U.S. headquarters is located at 3170 Porter 

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Drive, Palo Alto, CA 94304, with offices in Philadelphia, PA and Ewing, NJ. Jazz principally 

develops, manufactures and markets brand name drugs. 

10. The defendant Jazz Pharmaceuticals Ireland Limited is a corporation organized 

and existing under the laws of Ireland, with its principal place of business at Waterloo Exchange, 

Waterloo Road, Dublin 4, Ireland. 

11. The defendant Jazz Pharmaceuticals Public Limited Company is an Ireland public 

limited biopharmaceutical company organized and existing under the laws of Ireland, with its 

principal place of business at Waterloo Exchange, Waterloo Road, Dublin 4, Ireland. Jazz 

Pharmaceuticals plc common stock is publicly traded in the United States on the NASDAQ stock 

exchange. Jazz Pharmaceuticals plc is the parent company of Jazz Pharmaceuticals, Inc. and Jazz 

Pharmaceuticals Ireland Limited. 

12. Among other things, Jazz Pharmaceuticals, Inc. and Jazz Pharmaceuticals Ireland 

Limited were parties to the document styled as the “Settlement Agreement” in this complaint. 

Among other things, Jazz Pharmaceuticals plc was directly involved in the negotiation of the 

unlawful agreements described in this complaint. Each of the three Jazz defendants was directly 

and substantially involved in planning and undertaking the anticompetitive acts alleged in this 

complaint. 

13. The three Jazz entities are referred to collectively as “Jazz.”

14. Jazz manufactures and sells Xyrem® (sodium oxybate) oral solution, the only 

product approved by the U.S. Food and Drug Administration (the “FDA”) to be marketed in the 

U.S. for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in both adult 

and pediatric patients with narcolepsy. 

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15. The defendant Hikma Pharmaceuticals plc is a public limited company organized 

and existing under the laws of the United Kingdom, with its principal place of business at 1 New 

Burlington Place, London, W1S 2HR and its U.S. headquarters at 246 Industrial Way West, 

Eatontown, NJ, 07724. 

16. The defendant Hikma Pharmaceuticals USA Inc. is a corporation organized and 

existing under the laws of the State of Delaware, with its principal place of business at 246 

Industrial Way West, Eatontown, NJ, 07724, and is a wholly-owned subsidiary of Hikma 

Pharmaceuticals plc. Before June 20, 2018, Hikma Pharmaceuticals USA Inc. was organized 

under the name West-Ward Pharmaceuticals Corp., which had been acquired by Hikma 

Pharmaceuticals plc in 1998. 

17. The defendant Roxane Laboratories, Inc. is a corporation organized and existing 

under the laws of the State of Nevada, with its principal place of business at 1809 Wilson Road, 

Columbus, Ohio, 43328. Roxane Laboratories, Inc. was purchased by West-Ward 

Pharmaceuticals Corp. in 2016 and is now a wholly-owned subsidiary of Hikma Pharmaceuticals 

plc. 

18. The defendant Eurohealth (USA), Inc. is a holding company for Hikma 

Pharmaceuticals USA Inc. and a wholly-owned subsidiary of Hikma Pharmaceuticals plc, 

organized and existing under the laws of the State of Delaware, with its principal place of 

business at 246 Industrial Way West, Eatontown, NJ, 07724. 

19. Among other things, Roxane Laboratories, Inc., West-Ward Pharmaceuticals 

Corp., Eurohealth (USA), Inc., and Hikma Pharmaceuticals plc were parties to the document 

styled as the “Settlement Agreement” in this complaint. Each of the Hikma-related defendants 

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was directly and substantially involved in planning, entering into, and performing under the 

agreements reached beginning in 2017, as alleged in this complaint. 

20. The defendant Amneal Pharmaceuticals LLC is a limited liability company 

organized and existing under the laws of the State of Delaware, with its principal place of 

business at 400 Crossing Boulevard, Bridgewater, New Jersey, 08807. 

21. The defendant Par Pharmaceutical, Inc. is a corporation organized and existing 

under the laws of the State of Delaware, with its principal place of business at One Ram Ridge 

Rd., Chestnut Ridge, NY 10977. Par is a subsidiary of Endo International plc, an Irish public 

limited company with its U.S. headquarters located in Malvern, Pennsylvania. In September 

2015, Endo completed an acquisition of Par Pharmaceuticals Holdings, Inc. and its subsidiaries, 

including Par Pharmaceutical, Inc., and combined it with Endo’s existing generics subsidiary, 

Qualitest Pharmaceuticals. As used in this complaint, “Par” encompasses relevant predecessorsand-successors-in-interest. 

22. The defendant Lupin Ltd. is a public limited company organized and existing 

under the laws of India, with its principal place of business at B/4 Laxmi Towers, Bandra-Kurla 

Complex, Bandra (E), Mumbai 400 051, India. 

23. The defendant Lupin Pharmaceuticals Inc., a wholly-owned subsidiary of Lupin 

Ltd., is a corporation organized and existing under the laws of the State of Delaware, with its 

principal place of business at 111 South Calvert Street, Baltimore, Maryland, 21202. 

24. The defendant Lupin Inc., a wholly-owned subsidiary of Lupin Ltd., is a 

corporation organized and existing under the laws of the State of Delaware, with its principal 

place of business at 111 South Calvert Street, Baltimore, Maryland, 21202. 

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25. All of the defendants’ wrongful actions described in this complaint are part of, 

and in furtherance of, the illegal monopolization and restraint of trade alleged herein, and were 

authorized, ordered, and/or undertaken by the defendants’ various officers, agents, employees, or 

other representatives while actively engaged in the management of the defendants’ affairs (or 

that of their predecessors-in-interest) within the course and scope of their duties and 

employment, and/or with the actual, apparent, and/or ostensible authority of the defendants. 

III. JURISDICTION AND VENUE 

26. The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332(d) 

because this is a class action in which the aggregate amount in controversy exceeds $5,000,000 

and at least one member of the putative class is a citizen of a state different from that of one of 

the defendants. The Court further has jurisdiction over this action pursuant to 15 U.S.C. § 26 and 

28 U.S.C. §§ 1331 and 1337 as this action also alleges violations of sections 1 and 2 of the 

Sherman Act, 15 U.S.C. §§ 1 & 2, that are actionable under sections 4 and 16 of the Clayton Act, 

15 U.S.C. §§ 15(a) and 26. The Court also has jurisdiction over the claims under the various state 

laws under both 28 U.S.C. § 1332(d) and 28 U.S.C. § 1367(a). 

27. This action seeks to recover treble damages, interest, costs of suit, and reasonable 

attorneys’ fees for the injuries sustained by the plaintiff and members of the class resulting from 

the Jazz defendants’ monopolization and from all defendants’ conspiracy to restrain trade in the 

United States market for Xyrem and its generic equivalents. The action also seeks permanent 

injunctive relief against the defendants to undo and prevent the unlawful conduct alleged here. 

28. Venue is appropriate within this district as defendants transact business here, and 

under 15 U.S.C. § 15(a) (Clayton Act), 15 U.S.C. § 22 (nationwide venue for antitrust matters), 

and 28 U.S.C. § 1391(b) (general venue provision). Further, the defendants and/or their agents 

may be found in this district. 

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29. The Court has personal jurisdiction over each defendant. Each defendant has 

transacted business, maintained substantial contacts, and/or committed overt acts in furtherance 

of the illegal scheme and conspiracy throughout the United States, including in this district. The 

scheme and conspiracy have been directed at, and have had the intended effect of, causing injury 

to persons residing in, located in, or doing business throughout the United States, including in 

this district. 

IV. REGULATORY FRAMEWORK 

A. The regulatory structure for approval and substitution of generic drugs. 

30. Under the Federal Food, Drug, and Cosmetic Act (“FDCA”),1

 manufacturers that 

create a new drug must obtain approval from the FDA to sell the product by filing a New Drug 

Application (“NDA”).2 An NDA must include specific data concerning the safety and 

effectiveness of the drug, as well as any information on applicable patents.3 

31. When the FDA approves a brand manufacturer’s NDA, the manufacturer may list 

in Approved Drug Products with Therapeutic Equivalence Evaluations (known as the “Orange 

Book”) patents that claim the drug or a method of using the drug, and that could reasonably be 

enforced against a generic manufacturer that makes, uses, or sells a generic version of the brand 

drug before the expiration of the listed patents.4 The manufacturer may list in the Orange Book 

within 30 days of issuance any patents issued after the FDA approved the NDA.5

 

 

1

 Pub. L. No. 75-717, 52 Stat. 1040 (1938) (codified as amended in 21 U.S.C. § 301 et seq.). 

2

 21 U.S.C. §§ 301-392. 

3

 21 U.S.C. § 355(a), (b). 

4

 For example, patents covering processes for making drug products may not be listed in the 

Orange Book. 

5

 21 U.S.C. § 355(b)(1), (c)(2). 

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32. The FDA relies completely on the brand manufacturer’s truthfulness about patent 

validity and applicability because it does not have the resources nor authority to verify the 

manufacturer’s patents for accuracy or trustworthiness. In listing patents in the Orange Book, the 

FDA merely performs a ministerial act. 

1. The Hatch-Waxman Amendments. 

33. The Hatch-Waxman Amendments, enacted in 1984, simplified regulatory hurdles 

for prospective generic manufacturers by eliminating the need for them to file lengthy and costly 

NDAs.6 A manufacturer seeking approval to sell a generic version of a brand drug may instead 

file an Abbreviated New Drug Application (“ANDA”). An ANDA relies on the scientific 

findings of safety and effectiveness included in the brand manufacturer’s original NDA and must 

further show that the generic contains the same active ingredient(s), dosage form, route of 

administration, and strength as the brand drug and that it is bioequivalent, i.e., absorbed at the 

same rate and to the same extent as the brand. The FDA assigns generics that meet these criteria 

relative to their brand counterparts an “AB” rating. 

34. The FDCA and Hatch-Waxman Amendments operate on the principle that 

bioequivalent drug products containing identical amounts of the same active ingredients, having 

the same route of administration and dosage form, and meeting applicable standards of strength, 

quality, purity, and identity are therapeutically equivalent and may be substituted for one 

another. Bioequivalence demonstrates that the active ingredient of the proposed generic would 

be present in the blood of a patient to the same extent and for the same amount of time as the 

brand counterpart.7

 

 6 See Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 

98 Stat. 1585 (1984) (codified as amended at 21 U.S.C. § 355). 

7

 21 U.S.C. § 355(j)(8)(B). 

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35. Through the Hatch-Waxman Amendments, Congress sought to expedite the entry 

of less expensive generic competitors to brand drugs, thereby reducing healthcare expenses 

nationwide. Congress also sought to protect pharmaceutical manufacturers’ incentives to create 

new and innovative products. 

36. The Hatch-Waxman Amendments achieved both goals, advancing substantially 

the rate of generic product launches and ushering in an era of historically high profit margins for 

brand pharmaceutical manufacturers. In 1983, before the Hatch-Waxman Amendments, only 

35% of the top-selling drugs with expired patents had generic alternatives; by 1998, nearly all 

did. In 1984, prescription drug revenues for brands and generics totaled $21.6 billion; by 2013, 

total prescription drug revenues had climbed to more than $329.2 billion, with generics 

accounting for 86% of prescriptions.8

 Generics are dispensed about 95% of the time when a 

generic form is available.9

2. Regulatory exclusivities for new drugs. 

37. In order to promote a balance between new drug innovation and generic drug 

competition, the Hatch-Waxman Amendments also provided for exclusivities (or exclusive 

marketing rights) for new drugs. These exclusivities are granted by the FDA upon approval of a 

drug if statutory requirements are met. These exclusivities are listed in the Orange Book, along 

with any applicable patents, and can run concurrently with the listed patents. 

 8 See IMS Institute for Healthcare Informatics, Medicine Use and Shifting Costs of 

Healthcare: A Review of the Use of Medicines in the United States in 2013 30, 51 (2014), 

https://oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/IMSMedicine%20use%20and%20shifting%20cost%20of%20healthcare.pdf. 

9 Id. at 51. 

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38. One such exclusivity, New Chemical Entity (NCE) exclusivity, applies to 

products containing chemical entities never previously approved by FDA either alone or in 

combination. If a product receives NCE exclusivity, the FDA may not accept for review any 

ANDA for a drug containing the same active moiety for five years from the date of the NDA’s 

approval, unless the ANDA contains a certification of patent invalidity or non-infringement, in 

which case an application may be submitted after four years.10

39. A drug product may also receive a three-year period of exclusivity if its sponsor 

submits a supplemental application that contains reports of new clinical investigations (other 

than bioavailability studies) conducted or sponsored by the sponsor that were essential to 

approval of the supplemental application. If this exclusivity is granted, the FDA may not approve 

an ANDA for that drug for three years from the date on which the supplemental application is 

approved.11

40. Regulatory exclusivities are not always absolute bars to generic entry. For 

example, some can be overcome by carving out information in the label or for other reasons.12

3. Abbreviated New Drug Applications and paragraph IV certifications. 

41. To obtain FDA approval of an ANDA, a manufacturer must certify that the 

generic will not infringe any patents listed in the Orange Book. Under the Hatch-Waxman 

Amendments, a generic manufacturer’s ANDA must contain one of four certifications: 

a) That no patent for the brand has been filed with the FDA (a “paragraph I 

certification”); 

b) That the patent for the brand has expired (a “paragraph II certification”); 

 10 21 U.S.C. § 355(j)(5)(F)(ii); 21 C.F.R. § 314.108(b)(2). 

11 21 U.S.C. § 355(j)(5)(F)(iv); 21 C.F.R. § 314.108(b)(2)(5). 

12 See, e.g., 21 C.F.R. §§ 314.94(a)(8)(iv), 314.127(a)(7); 21 U.S.C. § 355a(o). 

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c) That the patent for the brand will expire on a particular date and the 

manufacturer does not seek to market its generic before that date (a 

“paragraph III certification”); or 

d) That the patent for the brand is invalid or will not be infringed by the generic 

manufacturer’s proposed product (a “paragraph IV certification”).13

42. If a generic manufacturer files a paragraph IV certification, a brand manufacturer 

has the ability to delay FDA approval of the ANDA simply by suing the ANDA applicant for 

patent infringement. If the brand manufacturer initiates a patent infringement action against the 

generic filer within 45 days of receiving notification of the paragraph IV certification, the FDA 

will not grant final approval to the ANDA until the earlier of (i) the passage of two-and-a-half 

years, or (ii) the issuance of a decision by a court that the patent is invalid or not infringed by the 

generic manufacturer’s ANDA.14 Until one of those conditions occurs, the FDA may grant 

“tentative approval,” but cannot authorize the generic manufacturer to market its product (i.e., 

grant final approval). The FDA may grant an ANDA tentative approval when it determines that 

the ANDA is ready for final approval but for the 30-month stay. 

4. The first filer’s 180-day exclusivity period. 

43. Generics may be classified as (i) first-filer generics, (ii) later generic filers, or (iii) 

authorized generics. 

44. To encourage manufacturers to seek approval of generic versions of brand drugs, 

the Hatch-Waxman Amendments grant the first paragraph IV generic manufacturer ANDA filer 

 13 21 U.S.C. § 355(j)(2)(A)(vii). 

14 21 U.S.C. § 355(j)(5)(B)(iii). This period is commonly called a “30-month Hatch-Waxman 

stay” or “30-month stay.” The brand/patent holder can choose to sue the generic after 45 days, 

including waiting until the generic has launched its product, but, in that event, the brand cannot 

take advantage of the 30-month stay of FDA approval, and must instead satisfy the showing 

required to obtain a preliminary injunction to prevent the generic launch. 

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(“first-filer”) a 180-day exclusivity period to market the generic version of the drug, during 

which the FDA may not grant final approval to any other generic manufacturer’s ANDA for the 

same brand drug.15 That is, when a first-filer files a substantially complete ANDA with the FDA 

and certifies that the unexpired patents listed in the Orange Book as covering the brand are either 

invalid or not infringed by the generic, the FDA cannot approve a later generic manufacturer’s 

ANDA until that first generic has been on the market for 180 days.16 

45. The 180-day window is often referred to as the first-filer’s six-month or 180-day 

“exclusivity”; this is a bit of a misnomer because a brand manufacturer (such as Jazz) can launch 

an AG at any time, manufacturing its AG in accordance with its approved NDA for the branded 

product but selling at a lower price point. Brand manufacturers frequently launch AGs in 

response to generic entry in order to recoup some of the sales they would otherwise lose. 

46. The Supreme Court has recognized that “this 180-day period of exclusivity can 

prove valuable, possibly ‘worth several hundred million dollars’” to the first-filer.17

47. A first-filer that informs the FDA it intends to wait until all Orange Book-listed 

patents expire before marketing its generic does not get a 180-day exclusivity period. Congress 

created this 180-day period to incentivize generic manufacturers to challenge weak or invalid 

patents or to invent around such patents by creating non-infringing generics. 

5. Patents are subject to judicial and administrative scrutiny. 

 15 21 U.S.C. § 355(j)(5)(B)(iv), (D). 

16 Or, until its first-filer exclusivity has been forfeited. A first filer can forfeit its 180-day 

exclusivity by, for example, failing to obtain tentative approval from the FDA for its ANDA 

within 30 months of filing its ANDA. There is no forfeiture here. 

17 F.T.C. v. Actavis, Inc., 570 U.S. 136, 144 (2013) (quoting C. Scott Hemphill, Paying for 

Delay: Pharmaceutical Patent Settlement as a Regulatory Design Problem, 81 N.Y.U. L. REV. 

1553, 1579 (2006)). 

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48. A patent may be valid or invalid, infringed or not infringed, and enforceable or 

unenforceable. Simply owning a patent does not entitle the patent owner to exclude others. 

Patents are routinely invalidated or held unenforceable, either upon reexamination or inter partes

proceedings by the PTO, by court decision, or by jury verdict. 

49. A patent holder at all times bears the burden of proving infringement. One way 

that a generic can prevail in patent infringement litigation is to show that its product does not 

infringe the patent (and/or that the patent holder cannot meet its burden to prove infringement). 

Another is to show that the patent is invalid or unenforceable.

50. A patent is invalid or unenforceable when: (i) the disclosed invention is obvious 

in light of earlier prior art; (ii) when an inventor, an inventor’s attorney, or another person 

involved with the application, with intent to mislead or deceive the PTO, fails to disclose 

material information known to that person to be material or submits materially false information 

to the PTO during prosecution; and/or (iii) when a later acquired patent is not patentably distinct 

from the invention claimed in an earlier patent (and no exception, such as the safe harbor, 

applies). 

51. In these circumstances, the PTO’s decision to issue a patent does not substitute for 

a fact-specific assessment of (i) whether the applicant made intentional misrepresentations or 

omissions on which the PTO relied in issuing the patent, and (ii) whether a reasonable 

manufacturer in the patent holder’s position would have a realistic likelihood of succeeding on 

the merits of a patent infringement suit. 

52. As a statistical matter, if the parties litigate a pharmaceutical patent infringement 

suit to a decision on the merits, it is more likely that a challenged patent will be found invalid or 

not infringed than upheld. The FTC reports that generics prevailed in 73% of Hatch-Waxman 

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patent litigation cases resolved on the merits between 1992 and 2002.18 An empirical study of all 

substantive decisions rendered in every patent case filed in 2008 and 2009 similarly reports that 

when a generic challenger stays the course until a decision on the merits, the generic wins 74% 

of the time.19

6. REMS programs encourages drug manufacturers to work cooperatively to 

establish single, shared programs. 

53. In 2007, Congress enacted the Food and Drug Administration Amendments Act 

(“FDAAA”).20 Section 505-1(a)(1) of the FDAAA authorizes the FDA to require sponsors of 

drug applications to submit a proposed REMS program if the agency determines that such is 

needed to ensure that a drug’s benefits outweigh its safety risks. A REMS can include a 

medication guide, patient package inserts, a plan for communicating with health care providers 

about risks, and/or restrictions on the distribution of the drug (e.g., by requiring practitioners, 

pharmacies, or healthcare settings to obtain special certifications before dispensing the drug). As 

examples, the FDA notes that if a drug carries a risk of serious infection, a REMS action might 

be to require patient education about the initial warning signs of infection prior to prescribing; if 

a drug is known to bear a risk of liver damage, a REMS might require liver function monitoring 

while the patient is taking the drug; for drugs that can cause a severe allergic reaction, a REMS 

might require that only a certified healthcare professional can administer the product; for drugs 

 18 FTC, Generic Drug Entry Prior to Patent Expiration: An FTC Study vi-vii (2002), 

https://www.ftc.gov/sites/default/files/documents/reports/generic-drug-entry-prior-patentexpiration-ftc-study/genericdrugstudy_0.pdf. 

19 John R. Allison, Mark A. Lemley & David L. Schwartz, Understanding the Realities of 

Modern Patent Litigation, 92 TEX. L. REV. 1769, 1787 (2014) (“[P]atentees won only 164 of the 

636 definitive merits rulings, or 26%,” and “that number is essentially unchanged” from a decade 

ago.). 

20 Pub. L. No. 110-85, 121 Stat. 823 (codified as amended at 21 U.S.C. § 301 et seq.). 

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that can cause severe birth defects, a REMS could require a negative pregnancy test before each 

prescription can be dispensed.21

54. The FDA can require a REMS before a drug enters the market, based on known 

risks, or after a drug has been approved, based on new evidence of risk. In determining whether a 

REMS will be required for a particular drug, the FDA considers factors including (i) the size of 

the population likely to use the drug; (ii) the seriousness of the disease; (iii) the drug’s expected 

benefit; (iv) the expected duration of treatment; (v) the seriousness of adverse effects; and (vi) 

the drug’s novelty. 

55. Generally, single, shared REMS systems—i.e., jointly administered REMS 

programs—which may include more than one sponsor, or multiple NDAs and other ANDAs, are 

required for innovator and generic manufacturers in order to reduce the burden to the healthcare 

system, including regulatory oversight, of having multiple REMS programs for drugs in the same 

class. Single, shared REMS systems allow for cost sharing among sponsors, provide for single 

portal access to materials and other documentary information about the program, and allow 

prescribers and pharmacies to complete certification and other administrative requirements just 

once, rather than multiple times for each manufacturer. 

56. The FDA may waive the single, shared system REMS requirement and permit the 

generic company to use a “different, comparable” aspect of the ETASU—Elements To Assure 

Safe Use, which are designed to “provid[e] safe access for patients to drugs with known serious 

risks that would otherwise be unavailable,” including requiring the drug’s sponsor to monitor and 

evaluate the implementation of the ETASU, if the agency finds that (i) the burden of forming a 

 21 Presentation by Elaine Lippmann, Office of Regulatory Policy, CDER, FDA, Risk 

Evaluation and Mitigation Strategies (REMS), https://www.fda.gov/media/105565/download. 

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single shared system outweighs the benefits of having one, or (ii) an aspect of the REMS is 

covered by a patent or is a trade secret and the generic applicant certifies that it sought a license 

for use of that aspect and was unable to obtain one. 

57. According to guidance issued by the FDA, FDA policy “makes clear that while 

the FDA encourages companies to work together to form a single, shared system, the agency will 

consider a waiver at any time (either upon request of the applicant, or on the agency’s own 

initiative).”22 The FDA, however, cannot force such cooperation under the FD&C Act. 

58. One policy issue Congress and the FDA faced when establishing the REMS 

system was the potential for abuse of the system by brand companies. Such abuse can be 

tempting given the economic realities. Competition from generics that are AB-rated to the brand 

usually decimate the brand drug company’s profits from the product. Within the first year of 

availability, generics typically capture all but a small percentage of the brand’s market share. 

59. As the FDA has explained: “One of the primary ways that FDA facilitates a 

competitive marketplace is through the efficient approval of generic drugs, which are often lower 

cost than brand drugs. Unfortunately, the process established by Congress may not always 

function as intended. At times, certain ‘gaming’ tactics have been used by brand drug companies 

to delay generic competition.”23 

60. The FDA has recognized that one gaming tactic concerns shared REMS 

requirements. In 2017, then Commissioner of the FDA, Scott Gottlieb, outlined the problem: 

 22 Statement from FDA Commissioner Scott Gottlieb, M.D., on New Policies to Reduce the 

Ability of Brand Drug Makers to Use REMS Programs as a Way to Block Timely Generic Drug 

Entry, Helping Promote Competition and Access (May 31, 2018), https://www.fda.gov/newsevents/press-announcements/statement-fda-commissioner-scott-gottlieb-md-new-policiesreduce-ability-brand-drug-makers-use-rems. 

23 RLD Access Inquiries. 

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Current law requires that branded and generic companies try to 

reach agreement on the implementation of a single, shared system 

REMS rather than maintaining separate REMS for the branded 

drug and its generic competitor. Any generic drug application 

referencing a branded drug with a REMS with ETASU must use a 

single, shared system REMS with the innovator, unless the FDA 

waives that requirement and permits the generic drug to use a 

separate, comparable REMS program. But we know that 

negotiations to reach agreement on shared system REMS can take 

extended periods of time. This can block the timely entry of a 

generic competitor. I believe branded firms sometimes use these

negotiations strategically, as a way to slow generic competitors.24

7. Citizen Petitions. 

61. Citizen petitions are a means by which any interested person can request that the 

FDA issue, amend, or revoke a regulation or order, or take or refrain from taking any other form 

of administrative action. 

62. All citizen petitions must specify the action requested and include a statement of 

the factual and legal grounds supporting the petition. 

63. In practice, the citizen petition process is often abused through the filing of 

petitions by brand drug manufacturers requesting that the FDA deny (or make more difficult, 

expensive, and time-consuming) the approval process of their would-be generic competitors. The 

factual and legal bases for these requests often purport to concern the safety and efficacy of the 

generic drugs seeking approval, or their bioequivalence to the brand. These arguments are 

typically lengthy and raise complex scientific issues. 

64. Even when the arguments raised in these citizen petitions are meritless or request 

something the FDA was already doing or planning to do—something that happens all too 

 24 FDA, Statement from FDA Commissioner Scott Gottlieb, M.D., on New Steps to Improve 

FDA Review of Shared Risk Evaluation and Mitigation Strategies to Improve Generic Drug 

Access (Nov. 8, 2017), https://www.fda.gov/news-events/press-announcements/statement-fdacommissioner-scott-gottlieb-md-new-steps-improve-fda-review-shared-risk-evaluation-and. 

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often—the FDA is legally required to nonetheless thoroughly analyze and respond to them, 

diverting resources and delaying generic approvals. 

B. The competitive effects of AB-rated generic and authorized generic competition. 

65. Generic versions of brand name pharmaceutical drugs contain the same active 

ingredient(s) as the brand name drug and are determined by the FDA to be just as safe and 

effective as their brand counterparts. The only material difference between generics and their 

corresponding brand versions is the price. Because generics are essentially commodities that 

cannot be therapeutically differentiated, the primary basis for competition between a branded 

product and its generic version, or between generic versions, is price. Typically, generics are 

50% to 80% (or more) less expensive than their brand counterparts when there are multiple 

generic competitors on the market for a given brand. Consequently, the launch of a generic 

usually results in significant cost savings for all drug purchasers, especially direct purchasers. 

66. Since the passage of the Hatch-Waxman Amendments, every state has adopted 

drug product selection laws that either require or permit pharmacies to substitute AB-rated 

generic equivalents for brand prescriptions (unless the prescribing physician specifically directs 

that substitution is not permitted). Substitution laws and other institutional features of 

pharmaceutical distribution and use create the economic dynamic that the launch of AB-rated 

generics results both in rapid price decline and rapid sales shift from brand to generic purchasing. 

Once a generic hits the market, it quickly captures sales of the corresponding brand drug, often 

80% or more of the market, within the first six months after entry. According to the IQVIA 

Institute—the leading provider of data in the healthcare sector—since 2013, for drugs where a 

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generic is available, consumers purchase the generic 97% of the time.25 The Federal Trade 

Commission (“FTC”) has found that on average, within a year of generic entry, prices had 

dropped 85%.26 As a result, competition from generics is viewed by brand manufacturers as a 

serious threat to their bottom line. 

67. Generic competition enables purchasers of a drug to (i) purchase generic versions 

of the drug at substantially lower prices, and/or (ii) purchase the brand at a reduced price. 

68. Until a generic version of the brand drugs enters the market, however, there is no 

bioequivalent drug to substitute for and compete with the brand, and the brand manufacturer can, 

therefore, continue to profitably charge supracompetitive prices. Brand manufacturers are well 

aware of generics’ rapid erosion of their brand sales. Brand manufacturers thus seek to extend 

their monopoly for as long as possible, sometimes resorting to any means possible—including 

illegal means—to delay or prevent generic competition. 

1. The first AB-rated generic is priced below the brand. 

69. Experience and economic research show that the first generic manufacturer to 

market its product prices it below the prices of its brand counterpart.27 Every state either requires 

or permits that a prescription written for the brand be filled with an AB-rated generic. Thus, the 

 25 IQVIA Institute, Medicine Use and Spending in the U.S.: A Review of 2017 and Outlook to 

2022 at 14 (2018), available at https://www.iqvia.com/insights/the-iqviainstitute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022. 

26 FTC, Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions 8 (2010), 

https://www.ftc.gov/sites/default/files/documents/reports/pay-delay-how-drug-company-payoffs-cost-consumers-billions-federal-trade-commission-staff-study/100112payfordelayrpt.pdf 

(“FTC Pay-for-Delay Study”). 

27 FTC, Authorized Generic Drugs: Short-Term Effects and Long-Term Impact ii-iii, vi, 34 

(2011), https://www.ftc.gov/sites/default/files/documents/reports/authorized-generic-drugs-shortterm-effects-and-long-term-impact-report-federal-trade-commission/authorized-generic-drugsshort-term-effects-and-long-term-impact-report-federal-trade-commission.pdf (“FTC 2011 AG 

Study”); FTC Pay-for-Delay Study at 1. 

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first generic manufacturer almost always captures a large share of sales from the brand. At the 

same time, there is a reduction in the average price paid for the drug at issue (brand and ABrated generic combined). 

70. During the 180-day exclusivity period, the first filer is the only ANDA-approved 

generic manufacturer on the market (though the brand’s AG can be, and often is, on the market 

during the 180-day exclusivity period). In the absence of competition from other generics, during 

the 180-day exclusivity period, a first-filer generic manufacturer generally makes about 80% of 

all of the profits that it will ever make on the product. 

2. Later generics drive prices down further. 

71. Once generic competitors enter the market, the competitive process accelerates, 

and multiple generic manufacturers typically compete vigorously with each other over price, 

driving prices down toward marginal manufacturing costs.28

72. According to the FDA and the FTC, the greatest price reductions are experienced 

when the number of generic competitors goes from one to two. In that situation, there are two 

commodities that compete on price. Some typical estimates are that a single generic results in a 

near-term retail price reduction of around 10% as compared to the brand price, but that with two 

generic entrants the near term retail price reduction is about 50%. 

73. In a report by the FTC issued at the request of Congress in 2011, the FTC found 

that generics captured 80% or more of sales in the first six months (this percentage erosion of 

 28 See, e.g., Tracy Regan, Generic Entry, Price Competition, and Market Segmentation in the 

Prescription Drug Market, 26 INT’L J. INDUS. ORG. 930 (2008); Richard G. Frank, The 

Ongoing Regulation of Generic Drugs, 357 NEW ENG. J. MED. 1993 (2007); Patricia M. 

Danzon & Li-Wei Chao, Does Regulation Drive Out Competition in Pharmaceutical Markets?, 

43 J.L. & ECON. 311 (2000). 

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brand sales holds regardless of the number of generic entrants.).29 In the end, the brand 

manufacturer’s sales decline to a small fraction of their level before generic entry. This is so 

because, “[a]lthough generic drugs are chemically identical to their branded counterparts, they 

are typically sold at substantial discounts from the branded price. According to the Congressional 

Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail 

pharmacies. Even more billions are saved when hospitals use generics.”30

3. Authorized generics, like other generics, compete on price. 

74. An “authorized generic” (sometimes shortened to “AG”) is a product sold under 

the authority of the brand’s approved NDA. An AG, then, is chemically identical to the brand 

drug but is sold as a generic, typically through either the brand manufacturer’s subsidiary (if it 

has one) or through a third-party distributor. 

75. If the 180-day exclusivity period applies to a first-filer ANDA, the exclusivity 

exists only to bar the FDA from approving another ANDA during that time period. The 

exclusivity does not apply to products sold under the authority of the original NDA. As a result, 

the 180-day exclusivity does not bar the entry of authorized generics; the statutory scheme does 

not prevent a brand manufacturer from marketing and selling an AG at any time. 

76. The FDA has found that allowing brand manufacturers to introduce AGs during 

the 180-day exclusivity period is consistent with the “fundamental objective of the HatchWaxman Amendments” to encourage competition and, as a result, “lower prices in the 

 29 FTC 2011 AG Study at 66-67. 

30 See FDA, What Are Generic Drugs?, https://www.fda.gov/drugs/generic-drugs/what-aregeneric-drugs (last updated Aug. 24, 2017). 

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pharmaceutical market.”31 The FDA reasoned that if a brand releases an AG at a reduced price 

during the 180-day exclusivity period, “this might reasonably be expected to diminish the 

economic benefit” to the generic first-filer by increasing competition and causing the generic to 

“reduc[e] the substantial ‘mark-up’ [generics] can often apply during the [180-day] period.”32

Such competition, and the resulting price decreases, work to benefit drug purchasers. 

77. Brand manufacturers recognize the significant economic advantages of releasing 

their AGs to compete with the first-filer generic during the 180-day exclusivity period. One 

study noted that “pharmaceutical developers facing competition from generics have large 

incentives to compete with their own or licensed ‘authorized generics.’”33

78. Competition from an AG substantially reduces drug prices and the revenues of the 

first-filer generic (especially during the 180-day exclusivity period). 

79. A study analyzing three examples of AGs found that “[f]or all three products, 

authorized generics competed aggressively against independent generics on price, and both the 

authorized and independent generics captured substantial market share from the brand.”34 

80. The FTC similarly found that AGs capture a significant portion of sales, reducing 

the first-filer generic’s revenues by about 50% on average.35 The first-filer generic makes much 

less money when it faces competition from an AG because (i) the AG takes a large share of unit 

 31 FDA letter at 11-12. 

32 Id. at 12. 

33 Kevin A. Hassett & Robert J. Shapiro, Sonecon, The Impact of Authorized Generic 

Pharmaceuticals on the Introduction of Other Generic Pharmaceuticals 3 (2007), 

http://www.sonecon.com/docs/studies/050207_authorizedgenerics.pdf. 

34 Ernst R. Berndt et al., Authorized Generic Drugs, Price Competition, and Consumers’ 

Welfare, 26 Health Affairs 790, 796 (2007). 

35 FTC 2011 AG Study at 139. 

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sales away from the first filer; and (ii) the presence of the AG causes prices, particularly generic 

prices, to decrease. 

81. Authorized generics are therefore a significant source of price competition. In 

fact, they are the only potential source of generic price competition during the first-to-file 

generic manufacturer’s 180-day exclusivity period. All drug industry participants recognize this. 

PhRMA recognizes it.36 Generic companies recognize it.37 Brand companies recognize it.38 

C. Manipulation of the regulatory structure to impair competition.

82. The brand manufacturer of a pharmaceutical product that has no generic 

competition in the marketplace gets all of the profits on all of the unit sales. In this circumstance, 

brand manufacturers can usually sell their drug for far more than the marginal cost of production, 

generating profit margins in excess of 70% or more, while making hundreds of millions of 

 36 Brand industry group PhRMA sponsored a study that concludes that the presence of an 

authorized generic causes generic prices to be more than 15% lower as compared to when there 

is no authorized generic. IMS Consulting, Assessment of Authorized Generics in the U.S. (2006), 

http://208.106.226.207/downloads/IMSAuthorizedGenericsReport_6-22-06.pdf. 

37 One generic stated that “[d]ue to market share and pricing erosion at the hands of the 

authorized [generic], we estimate that the profits for the ‘pure’ generic during the exclusivity 

period could be reduced by approximately 60% in a typical scenario.” See FTC 2011 AG Study 

at 81. Another generic manufacturer quantified the fiscal consequences of competing with an 

authorized generic and determined that the authorized generic reduced its first generic’s revenues 

by two-thirds, or by approximately $400 million. Comment of Apotex Corp. in Support of Mylan 

Citizen Petition at 4, Docket No. 2004P-0075 (Mar. 24, 2004), 

https://web.archive.org/web/20041216115511/http://www.fda.gov/ohrms/dockets/dailys/04/apr0

4/040204/04P-0075-emc00001.pdf. 

38 Commenting on an FDA petition by drug manufacturer Teva Pharmaceuticals, Pfizer 

stated: “Teva’s petition [to prevent the launch of an authorized generic] is a flagrant effort to 

stifle price competition – to Teva’s benefit and the public’s detriment.” Comment of Pfizer at 6-

7, Docket No. 2004P-0261 (June 23, 2004), 

https://web.archive.org/web/20050601041653/http://www.fda.gov/ohrms/dockets/dailys/04/June

04/062904/04p-0261-cr00001-01-vol2.pdf; Comment of Johnson & Johnson at 1, FDA Docket 

No. 2004P-0075 (May 11, 2004), 

https://web.archive.org/web/20041227172543/http://www.fda.gov/ohrms/dockets/dailys/04/June

04/060404/04p-0075-c00002-vol1.pdf. 

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dollars in sales. The ability to make those kinds of profit margins is what economists call market 

power. 

83. When a generic equivalent enters the market, however, it quickly captures 80% or 

more of the unit sales from the brand drug. When generic entry occurs, the brand manufacturer 

loses most of the unit sales; the generic manufacturer sells almost all of the units, but at 

drastically reduced prices—delivering enormous savings to drug purchasers. And when multiple 

generics compete in the market, that competition drives prices down to near the marginal cost of 

production. This competition ends the brand manufacturer’s market power and delivers 

enormous savings to drug purchasers. Competition converts what formerly were excess profits 

into purchaser savings. 

84. While brand manufacturers and first-filer generic manufacturers are typically 

marketplace competitors, they have a collective interest in preventing robust competition from 

several generic manufactures—competition that severely depresses prices—from breaking out. If 

they work together to prevent or delay such competition, they can keep the profit margins on all 

of the unit sales at 70% and split the resulting excess profits among themselves. In other words, 

by stifling competition, the brand manufacture and first-filer generic manufacturer can maintain 

high prices, protect their profits, and split between themselves the enormous savings that 

increased generic competition would have delivered to drug purchasers. 

85. Figure 1 compares the impact on a brand manufacturer’s profits between (i) a 

situation where it settles a patent lawsuit on the merits (i.e., with only an agreed entry date and 

without a pay-off to the generic company); and (ii) a situation where it settles the lawsuit with a 

large, unjustified payment to the generic manufacturer. In the former situation, the agreed entry 

date for the generic is earlier and the brand manufacturer’s profits are thus greatly reduced. In the 

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26 

latter situation, the agreed entry date is later and the brand manufacturer’s profits increase 

significantly. Earlier entry may also occur if the generic manufacturer launches its product at risk 

(i.e., while the litigation is still pending) or prevails in the patent litigation and then launches its 

product. 

86. In order for such an anticompetitive pact to work, brand and generic 

manufacturers need a means by which to divide between them the ill-gotten gains—the increased 

profit to the detriment of drug purchasers—that delayed competition makes possible. After all, 

the generic manufacturer will not refrain from competing if it does not share in the profit gains 

through some means. The means usually takes the form of pay-offs from the brand manufacturer, 

deals are often referred to as “pay-for-delay,” “exclusion payment,” or “reverse payment” 

agreements. 

Figure 1. Impact of Generic Delay on Brand Profits

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87. The brand manufacturer may choose to—unlawfully—pay off only the first-filer, 

even if other generic manufacturers are also lined up to challenge the patents. The first-filer’s 

agreement to delay marketing its generic drug also prevents other generic manufacturers from 

marketing their products: none of the later filers can enter until the first-filer’s 180-day 

exclusivity period has run. 

88. Later ANDA filers have more modest financial expectations because they may 

have little or no expectation of any form of market exclusivity. By the time they enter the 

market, there is at least the brand and one other generic on the market (and often a second 

generic in the form of an AG) and, thus, the drug has already been, or is on its way to being, 

commoditized. As a result, later-filing generics can be motivated away from competitively 

driven modest sales results and toward anticompetitive payoffs by brand companies. Under these 

unlawful arrangements, the brand shares some of its supracompetitive profits with the later-filing 

generics, and in exchange the later-filing generics to drop their patent challenges and accept a 

late agreed entry date. 

89. Pay-for-delay agreements are fundamentally anticompetitive and contrary to the 

goals of the Hatch-Waxman statutory scheme. They extend the brand manufacturer’s monopoly 

by blocking access to more affordable generic drugs, forcing purchasers to buy expensive brands 

instead. 

1. No-AG agreements provide a means for brand and generic manufacturers to 

share the gains from conspiring. 

90. In the 1990s, pay-offs from brand manufacturers often took the form of cash 

payments to the generic competitor. Since the 2000s—as a result of regulatory scrutiny, 

congressional investigations, and class action lawsuits—brand and generic manufacturers have 

entered into increasingly more elaborate agreements in an attempt to hide payoffs. 

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91. One form of payoff is a “no-authorized generic” or “no-AG” agreement. With a 

no-AG agreement, the brand manufacturer agrees not to market an AG version of the brand drug 

for some period of time after the first generic enters the market in exchange for the first generic 

agreeing to a delayed entry date. 

92. Absent a no-AG promise, it often makes economic sense for the brand 

manufacturer to begin marketing an AG as soon as (or sometimes weeks or months before) the 

first generic enters the marketplace. The AG entry affords the brand company a price strategy 

(competing with a low-priced generic), and this competition takes sales from what would 

otherwise be sold by the first-filer generic. Competition from an AG typically cuts the first filer’s 

revenues about in half, and by having two generics in the market (the first-filer generic and the 

AG), the two generics compete on price. This lowers prices, delivering savings to drug 

purchasers. 

93. To prevent an AG from causing this substantial loss of revenues and profits, a 

first-filer generic may be willing to delay its entry into the marketplace in return for the brand 

manufacturer’s agreement to forgo competing with an AG during the exclusivity period. The 

additional monopoly profits that the brand manufacturer gains from the delayed onset of generic 

competition more than makes up for the profits it forgoes by temporarily not competing with its 

AG. The brand manufacturer gains from the delayed onset of generic competition; the first-filer 

gains from the absence of generic competition for the first 180 days of marketing. 

94. Drug purchasers lose. The brand and first-filer’s reciprocal pledges not to 

compete harm purchasers thrice over. First, the pact delays the first-filer’s generic entry into the 

marketplace and thereby extends the time during which the more expensive brand is the only 

product on the market. Second, by delaying the first-filer’s entry, the pact also delays the time 

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when other, later, generics enter. Third, the pact prevents the brand from marketing an AG 

during the 180-day exclusivity period, reducing price competition during that period, particularly 

price competition that would otherwise occur between the first-filer’s generic and the brand’s 

AG. 

95. For the first-filer generic, the difference between selling the only generic and 

competing against an AG for 180 days can amount to tens or even hundreds of millions of 

dollars, depending on the size of the brand’s sales. A no-AG pledge thus has the same economic 

effect as a pay-off made in cash. As explained by the then-Chairman of the FTC: 

Because the impact of an authorized generic on first-filer revenue 

is so sizable, the ability to promise not to launch an AG is a huge 

bargaining chip the brand company can use in settlement 

negotiations with a first-filer generic. It used to be that a brand 

might say to a generic, “if you go away for several years, I’ll give 

you $200 million.” Now, the brand might say to the generic, “if I 

launch an AG, you will be penalized $200 million, so why don’t 

you go away for a few years and I won’t launch an AG.”39

Courts agree that no-AG agreements are a form of payment actionable under Actavis and are 

anticompetitive.40

 39 “Statement of Chairman Jon Leibowitz on the Release of the Commission’s Interim Report 

on Authorized Generics,” FTC (June 24, 2009), 

https://www.ftc.gov/sites/default/files/documents/reports/authorized-generics-interim-reportfederal-trade-commission/p062105authgenstatementleibowitz.pdf. 

40 See In re Loestrin 24 Fe Antitrust Litig., Nos. 14-2071, 15-1250, 2016 U.S. App. LEXIS 

3049, at *25-26 (1st Cir. Feb. 22, 2016); In re Opana ER Antitrust Litig., No. 14 C 10150, 2016 

U.S. Dist. LEXIS 16700, at *23-25 (N.D. Ill. Feb. 10, 2016); In re Aggrenox Antitrust Litig., 94 

F. Supp. 3d 224, 242 (D. Conn. 2015); United Food & Commercial Workers Local 1776 & 

Participating Emp’rs Health & Welfare Fund v. Teikoku Pharma USA, Inc., 74 F. Supp. 3d 

1052, 1069 (N.D. Cal. 2014); In re Effexor XR Antitrust Litig., No. 11-cv-5479, 2014 U.S. Dist. 

LEXIS 142206, at *62 (D.N.J. Oct. 6, 2014); Time Ins. Co. v. Astrazeneca AB, 52 F. Supp. 3d 

705, 709-10 (E.D. Pa. 2014); In re Niaspan Antitrust Litig., 42 F. Supp. 3d 735, 751 (E.D. Pa. 

2014); In re Nexium (Esomeprazole) Antitrust Litig., 968 F. Supp. 2d 367, 392 (D. Mass. 2013). 

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96. For a first ANDA filer (like Hikma) for a brand drug with more than a billion 

dollars in annual sales (like Xyrem), the difference between selling a generic without having to 

compete against another generic, whether AG or otherwise, amounts to tens, and in some 

instances, hundreds of million dollars. These economic realities are well known in the 

pharmaceutical industry. No-AG agreements thus allow competitors to benefit from an 

agreement not to compete and deny purchasers the consumer surplus that should flow to them 

from increased competition. 

97. Figure 2 depicts what happens when a settlement agreement includes a no-AG 

promise. The red area shows the brand manufacturer’s additional monopoly profits earned during 

the period of delay. The purple area shows the amount of monopoly profit the brand 

manufacturer gives up (i.e., shares with the generic). 

Figure 2. Impact of No-AG Clause on Brand Profits

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98. Figure 3 depicts the generic manufacturer’s principal considerations in deciding 

whether to accept a settlement that includes a no-AG agreement. Without a settlement, the 

generic could enter earlier—either when the 30-month stay expires (“at risk”) or when it wins the 

litigation. The generic manufacturer’s profits (gross margins) would be high during the 180-day 

exclusivity period and then fall rapidly as additional generics enter. This profit flow is somewhat 

uncertain because (i) if the generic launches at risk, it could (theoretically) later be found to 

infringe a valid patent, and (ii) it is expected that the brand manufacturer will launch an 

authorized generic and capture approximately 50% of the generic’s sales. With a no-AG 

promise, the profit flow occurs later but is more certain and is larger—roughly twice the size—

because the generic manufacturer does not lose half of the market to the brand manufacturer’s 

authorized generic and can charge a higher price. 

Figure 3. Impact of No-AG Promise on Generic’s Profits

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99. Pay-offs by means of no-AG clauses usually exceed the value that the first-filer 

generic could have obtained even if it had won the patent infringement litigation. By settling the 

patent case in exchange for a no-AG payoff, the first-filer converts that critical six months into a 

period of total generic exclusivity that it was not otherwise entitled to, thus doubling its unit 

sales and making those sales at a higher price. 

2. Manufacturers also use anticompetitive “acceleration” clauses to delay 

competition. 

100. Another tool in the pharmaceutical monopolist’s belt are “acceleration” clauses, 

also referred to as “poison pills,” which, when used in settling Hatch-Waxman litigation, disincentivize generic filers from entering the market by eliminating the possibility of any one 

generic obtaining de facto exclusivity (aside from the first-filing generic). 

101. Brand manufacturers can induce generics to enter settlements by including these 

clauses in their agreements. In practice, such “acceleration” clauses do not accelerate generic 

entry—they delay it. 

102. The purpose and effect of an “acceleration” clause is to dramatically reduce any 

other generic manufacturer’s incentive to try to enter the market as quickly as they can. Absent 

the “acceleration” clause, other generic manufacturers would have an incentive to enter the 

market as soon as they were able, thereby enjoying a substantial period as the only ANDA-based 

generic product on the market. By eliminating this possibility, an “acceleration” clause results in 

delayed generic entry by, inter alia, disincentivizing generics that would otherwise be willing and 

able to come to market from doing so because of the knowledge that other generics would 

immediately flood the market. 

103. The Chairman and CEO of Apotex, Inc.—one of the largest generic

manufacturers in the world—twice testified to Congress that “acceleration” clauses represent 

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“the primary anticompetitive aspects of settlements” because they “eliminate any incentive for a 

subsequent filer to continue to litigate for earlier market entry.”41 The clauses both induce 

prospective generic competitors to accept later entry dates and deter others from challenging 

weak patents: 

[N]o subsequent filer is going to take up the patent fight knowing it 

will get nothing if it wins. Consumers are the biggest losers under 

this system. If subsequent filers do not have the incentive to take 

on the cost of multimillion patent challenges these challenges will 

not occur. Weak patents that should be knocked out will remain in 

place, unduly blocking consumer access to generics. The 

challenges to brand patents by generic companies that HatchWaxman was designed to generate will decrease. And settlements 

that delay consumer access to the generic will, in turn, increase.42

104. Scholars agree. A recently published study analyzing empirical pharmaceutical 

settlement data concluded that “[a]n acceleration clause paired with the 180-day exclusivity 

period appears to effectively deter other generics and, at least in the instances we observed, never 

to have resulted in an actual ‘accelerated’ entry.” Indeed, the study found that in cases like this 

one where the first-filer retained its 180-day exclusivity, the use of “acceleration” clauses had 

not once promoted earlier generic entry. “Among the 54 cases in which the first filer retained 

sole rights to the 180-day exclusivity period, there were no cases of early generic entry. In other 

words, there were no cases in which the first filer’s entry was accelerated, and there were no 

 41 Protecting Consumer Access to Generic Drugs Act of 2007: Hearing on H.R. 1902 Before 

the Subcomm. On Commerce, Trade, and Consumer Protection of the H. Comm. on Energy & 

Commerce, 110th Cong., at 65, 67 (2007) (statement of Bernard Sherman, CEO, Apotex, Inc.), 

http://www.gpo.gov/fdsys/pkg/CHRG- 110hhrg38992/pdf/CHRG-110hhrg38992.pdf. 

42 Protecting Consumer Access to Generic Drugs Act of 2009: Hearing on H.R. 1706 Before 

the Subcomm. On Commerce, Trade, and Consumer Protection of the H. Comm. on Energy & 

Commerce, 111th Cong., at 218 (2009) (statement of Bernard Sherman, CEO, Apotex, Inc.) 

(hereinafter “Apotex 2009 Statement”), http://www.gpo.gov/fdsys/pkg/CHRG111hhrg67822/pdf/CHRG-111hhrg67822.pdf. Apotex addressed acceleration clauses in the 

context in which, as here, the first-filing generic retained the 180-day exclusivity. 

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cases in which a different generic entered before the entry date set in the first filer’s 

settlement.”43

V. FACTS 

A. The development and approval of Xyrem. 

105. In the late 1990s and into 2000, Orphan Medical Inc., of Minnetonka, Minnesota 

developed the use of sodium oxybate as a central nervous system depressant providing anticataplectic activity in patients with narcolepsy. 

106. In September 2000, Orphan Medical submitted a new drug application seeking 

FDA approval to market sodium oxybate oral solution, 500 mg/ml in the United States to treat 

cataplexy associated with narcolepsy. The product was brand named Xyrem. 

107. In July 2002, the FDA approved Xyrem (sodium oxybate oral solution) for the 

treatment of cataplexy (i.e., a sudden and transient episode of muscle weakness accompanied by 

full conscious awareness, typically triggered by emotions such as laughing, crying, or terror) in 

patients with narcolepsy. (Later in 2005, the FDA also approved Xyrem for the treatment of 

excessive daytime sleepiness in patients with narcolepsy). 

108. Sodium oxybate is the sodium salt of gamma-hydroxybutyrate, commonly known 

as GHB, the active ingredient in Xyrem. GHB is a chemical that has been abused (misused). 

Abuse can cause serious medical problems, including trouble breathing, seizures (convulsions), 

loss of consciousness, coma, and death. Abuse of Xyrem could also lead to dependence, craving 

for the medicine, and severe withdrawal symptoms. 

 43 Keith M. Drake & Thomas G. McGuire, Generic Entry Before the Agreed-Upon Date in 

Pharmaceutical Patent Settlements, Journal of Competition Law & Economics, 00(00), 1–32 at 

1, 7. 

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109. At the time of the development of Xyrem, abuse of GHB was also designated by 

the Drug Enforcement Agency as a “date-rape drug.” GHB is designated by the DEA as a 

Schedule I controlled substance under the Controlled Substances Act. Xyrem itself is a Schedule 

III drug under the CSA, i.e., it has a medium potential for abuse and abuse can cause severe 

mental addiction, or moderate physical addiction. 

 Xyrem is an oral solution that is recommended to be taken two times each night, 

the first dose right at bedtime and the second dose two-and-a-half to four hours later. 

 The original FDA approval of Xyrem was conditioned on implementation of a 

risk management program (or, “RiskMAP”). Components of the original plan included (a) 

implementation of a restricted distribution program for Xyrem, (b) implementation of a program 

to educate physicians and patients about the risks and benefits of Xyrem, (c) filling of the initial 

prescription only after the prescriber and patient have received and read the educational 

materials, and (d) maintenance of a registry of all patients and a record of all prescribers. In 

addition, at the time of the original approval, Orphan Medical agreed with the FDA (i) that each 

of the bulk drug and drug product would be manufactured at a single site, (ii) that the drug 

product would be stored at a facility compliant with Schedule III regulations, where a 

consignment inventory will be maintained, (iii) that the inventory would be owned by Orphan 

Medical, Inc., (iv) that the facility would be managed by a central pharmacy which would 

maintain the consignment inventory, and (v) that other than in the single central pharmacy, 

Xyrem would not be stocked in retail pharmacy outlets. 

 Since the original approval and under requirements requested by Orphan Medical, 

Xyrem has been dispensed through a single central pharmacy directly to patients under the 

RiskMAP (and a later, similar program to be discussed). 

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113. Subsequent to approval, the FDA granted Xyrem a New Chemical Entity 

(“NCE”) exclusivity of five years from the NDA approval date, expiring on July 17, 2007, and 

orphan drug exclusivity of seven years from the NDA approval date, expiring on July 17, 2009. 

These government grants of exclusivity assured the lack of competition by generic versions of 

Xyrem through mid-2009. 

114. In June 2005, a small drug company, Jazz Pharmaceuticals, acquired Orphan 

Medical (and thereby all rights to Xyrem). 

115. By 2007, Jazz reported net sales of $39 million for Xyrem, which made up about 

three-quarters of the company’s net sales of all products for the year. Over the years, Xyrem has 

continued to be the major product for Jazz. In 2019, Jazz reported total revenue from Xyrem of 

about $1.6 billion, which again accounted for about three-quarters of the company’s net product 

sales. 

B. The patents ostensibly covering aspects of Xyrem or its use. 

116. Over time, at first Orphan Medical and later Jazz, filed for and obtained about 21 

patents ostensibly claiming aspects of Xyrem and its use. 

117. Jazz’s patents are grouped into three patent families: the ’431 family, the ’730 

family, and the ’302 family. Because the active pharmaceutical ingredient in Xyrem, gammahydroxybutyrate, has long been known, none of the patents in these families claim the active 

pharmaceutical compound. 

1. The ’431 family of patents claim processes for making Xyrem, formulations 

of Xyrem, and methods of using Xyrem. 

118. The ’431 family of patents all claim priority to U.S. Patent Application No. 

09/470,570, which Orphan Medical filed on December 22, 1999. The patents in the ’431 family 

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include the following patents that Jazz and/or Orphan Medical requested be listed in the Orange 

Book as covering Xyrem: 

’431 PATENT FAMILY: LISTED IN THE ORANGE BOOK

U.S. Patent No. Application Date Issue Date 

Expiry

(without 

pediatric 

exclusivity)

6,780,889 June 11, 2002 Aug. 24, 2004 July 4, 2020 

7,262,219 July 7, 2004 Aug. 28, 2007 July 4, 2020 

7,851,506 July 13, 2007 Dec. 14, 2010 Dec. 22, 2019 

8,263,650 Apr. 13, 2012 Sept. 11, 2012 Dec. 22, 2019 

8,324,275 Apr. 13, 2012 Dec. 4, 2012 Dec. 22, 2019 

8,859,619 Nov. 26, 2012 Oct. 14, 2014 Dec. 22, 2019 

8,952,062 March 6, 2013 Feb. 10, 2015 Dec. 22, 2019 

9,539,330 Nov. 9, 2015 Nov. 8, 2016 Dec. 22, 2019 

The ’431 family of patents includes Orange Book-listed patents that claim pharmaceutical 

formulations of sodium oxybate or other salts of GHB (the ’889, ’219, ’650, ’619, and ’330 

patents) and/or methods of treating sleep-related conditions with sodium oxybate or other salts of 

GHB (the ’506, ’650, ’275, and ’062 patents). 

119. The patents in the ’431 family also include two patents that claim specific 

processes for manufacturing Xyrem. As process patents, they are not listable in the Orange 

Book. 

’431 PATENT FAMILY: PROCESS PATENTS NOT LISTED IN THE ORANGE BOOK 

U.S. Patent No. Application Date Issue Date Expiry

6,472,431 Dec. 22, 1999 Oct. 22, 2002 Dec. 22, 2019 

8,461,203 July 13, 2011 June 11, 2013 Dec. 22, 2019 

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120. The patents in the ’431 family were set to expire on December 22, 2019, with the 

exception of the ’889 and ’219 patents, which received patent term adjustments under 35 U.S.C. 

§ 154(b). In 2018, the FDA granted pediatric exclusivity to the Orange Book-listed patents, and 

that six-month exclusivity will expire on June 22, 2020 (for the ’506,’ 650, ’275, ’619, ’062 and 

’330 patents) or January 4, 2021 (for the ’889 and ’219 patents). The process patents were not 

eligible to be listed in the Orange Book and were not entitled to pediatric exclusivity, and so 

have expired. 

2. The ’730 family of patents claim methods of tracking prescriptions of a 

sensitive drug through a computer database. 

121. The ’730 family of patents all claim priority to U.S. Patent Application No. 

10/322,348, which Orphan Medical filed on December 17, 2002. The ’730 family of patents are 

all entitled “Sensitive Drug Distribution System and Method.” 

122. The patents in the ’730 family include the following patents that Jazz and/or 

Orphan Medical requested be listed in the Orange Book as covering Xyrem:44

’730 PATENT FAMILY: LISTED IN THE ORANGE BOOK

U.S. Patent No. Application Date Issue Date 

Expiry

(without 

pediatric 

exclusivity)

7,668,730 Dec. 17, 2002 Feb. 23, 2010 June 16, 2024 

7,765,106 Nov. 2, 2004 July 27, 2010 June 16, 2024 

7,765,107 Apr. 1, 2005 July 27, 2010 June 16, 2024 

7,895,059 Feb. 11, 2010 Feb. 22, 2011 Dec. 17, 2022 

 44 The ’730 family also includes United States Patent No. 7,797,171, which issued on 

September 14, 2010. The ’171 patent claims methods of obtaining FDA approval for a 

prescription drug that uses a controlled distribution method involving an exclusive central 

computer database. Jazz did not list the ’171 patent in the Orange Book and has not asserted this 

patent against any ANDA applicant for generic Xyrem. 

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’730 PATENT FAMILY: LISTED IN THE ORANGE BOOK

U.S. Patent No. Application Date Issue Date 

Expiry

(without 

pediatric 

exclusivity)

8,457,988 Aug. 27, 2012 June 4, 2013 Dec. 17, 2022 

8,589,182 Aug. 27, 2012 Nov. 19, 2013 Dec. 17, 2022 

8,732,963 Aug. 22, 2012 May 20, 2014 Dec. 17, 2022 

The patents in the ’730 family “relat[e] to a drug distribution system for tracking prescriptions of 

a ‘sensitive drug,’” which is “one which can be abused, or has addiction properties or other 

properties that render the drug sensitive.”45

123. In 2018, the FDA granted pediatric exclusivity to the Orange Book-listed patents 

for Xyrem. The expiration of that six-month exclusivity was listed in the Orange Book as 

December 16, 2024 for the ’730, ’106 and ’107 patents and as June 17, 2023 for the ’059, ’988, 

’182, and ’963 patents. 

3. The ’302 family of patents claim methods of treating sleep disorders with 

sodium oxybate in patients who are also taking divalproex sodium. 

124. The ’302 family of patents all claim priority to United States Patent Application 

No. 13/837,714, which Jazz filed on March 15, 2013. The ’302 family of patents are all entitled 

“Method of Administration of Gamma Hydroxybutyrate with Monocarboxylate Transporters.” 

125. The patents in the ’302 family include the following patents that Jazz requested be 

listed in the Orange Book as covering Xyrem:46

 45 Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals, LLC, 895 F.3d 1347, 1350 (Fed. 

Cir. 2018). 

46 The ’730 family also includes United States Patent No. 7,797,171, which issued on 

September 14, 2010. The ’171 patent claims methods of obtaining FDA approval for a 

prescription drug that uses a controlled distribution method involving an exclusive central 

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’302 PATENT FAMILY: LISTED IN THE ORANGE BOOK

U.S. Patent No. Application Date Issue Date 

Expiry

(without 

pediatric 

exclusivity)

9,050,302 Mar. 15, 2013 June 9, 2015 Mar. 15, 2033 

8,772,306 Apr. 29, 2013 July 8, 2014 Mar. 15, 2033 

9,486,426 May 8, 2015 Nov. 8, 2016 Mar. 15, 2033 

10,213,400 Jan. 12, 2018 Feb. 26, 2019 Mar. 15, 2033 

The patents in the ’302 family claim methods of treating sleeping disorders by decreasing the 

amount of sodium oxybate or other salt of GHB administered to the patient if the patient is also 

taking valproate or divalproex sodium, medications used to treat seizures. 

126. In 2018, the FDA granted pediatric exclusivity to the Orange Book-listed patents 

for Xyrem. The expiration of that six-month exclusivity is listed in the Orange Book as 

September 15, 2033 for the patents in the ’302 family with the exception of the ’400 patent, 

which did not issue and was not listed in the Orange Book until 2019 and is not currently listed 

in the Orange Book with pediatric exclusivity. 

C. The Jazz lawsuits against Roxane/Hikma. 

127. On July 8, 2010, Roxane submitted ANDA 202090, seeking FDA approval to 

market an AB-rated generic version of Xyrem in 500 mg/ml strength. Roxane was the first 

generic to file, making it potentially eligible for 180-day exclusivity when its ANDA got 

approved. Roxane’s ANDA proposed use of its own pharmacy dispensing program to meet risk 

requirements. 

 

computer database. Jazz did not list the ’171 patent in the Orange Book and has not asserted this 

patent against any ANDA applicant for generic Xyrem. 

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128. Roxane’s ANDA included paragraph IV certifications to the five patents that, at 

that time, were listed in the Orange Book for Xyrem: the ’889 patent, the ’219 patent, the ’730 

patent, the ’106 patent, and the ’107 patent. 

129. On October 14, 2010, Roxane notified Jazz of its original ANDA filing and 

provided a detailed account of why the ’889, ’219, ’730, ’106 and ’107 patents were invalid, 

unenforceable, and/or not infringed by Roxane ANDA product (“paragraph IV notice letter”). On 

November 22, 2010, Jazz filed suit against Roxane alleging infringement of these patents. 

130. Over time, and as Jazz obtained additional patents and listed them in the Orange 

Book, Roxane would, in turn, send additional paragraph IV notice letters to Jazz, each certifying 

the new patent was invalid, unenforceable, and/or not infringed by Roxane’s product. And Jazz 

responded by filing additional complaints alleging infringement. Those were: 

COMPLAINTS FILED BY JAZZ AGAINST ROXANE

Complaint Date Docket No. (D.N.J.) Date Paragraph IV 

Notice Letter Received Patent(s) in Suit 

Nov. 22, 2010 2:10-cv-06108 Oct. 14, 2010 ’889, ’219, ’730, 

’106,’107 

Feb. 4, 2011 2:11-cv-00660 Jan. 10, 2011 ’431, ’506 

May 2, 2011 2:11-cv-02523 Mar. 22, 2011 ’059 

Oct. 26, 2012 2:12-cv-06761 Oct. 5, 2012 ’650 

Dec. 5, 2012 2:12-cv-07459 unknown ’275 

Feb. 20, 2015 2:15-cv-01360 Jan. 15, 2015 ’203, ’306, ’619 

June 1, 2015 2:15-cv-03684 Apr. 16, 2015 ’062 

Jan. 27, 2016 2:16-cv-00469 Dec. 14, 2015 ’302 

Aug. 12, 2016 2:16-cv-04971 Jan. 9, 2015 ’963 

131. By the time of the last complaint, Hikma (through its subsidiary, West-Ward 

Pharmaceuticals Corp.) had an agreement in principal to acquire Roxane. As a result, the last 

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complaint listed named as defendants not only Roxane but also Hikma Pharmaceuticals plc and 

Hikma subsidiaries West-Ward Pharmaceuticals Corp. and Eurohealth (USA), Inc. 

132. In February of 2016, Hikma completed its acquisition of Roxane. Actions 

attributable to Roxane, Westward, and Hikma are, from this point forward, referred to just as 

“Hikma.” 

133. Over a period of about seven years—from the first lawsuit in 2010 through to an 

eventual settlement in 2017—the contentious litigation between Jazz and Roxane/Hikma 

included repeated acts by Jazz that unlawfully abused its patent positions. And often Jazz sought 

to enforce patents positions without any realistic likelihood of prevailing but knowing the 

prosecution would tie up the judicial processes to facilitate its overall goal of delaying or 

impairing generic entry. 

134. During the litigation between Jazz and Hikma, Hikma asserted affirmative 

defenses based on Jazz’s misuse of its patents. Specifically, Hikma argued that Jazz had engaged 

in “an abusive scheme to unfairly multiply [the patent] litigation” by: 

holding patent applications pending, gleaning [Hikma]’s 

noninfringement defenses from [Hikma]’s notice letters or from 

litigation, and then many years after issuance of the parent patents, 

filing continuation applications for new patent claims in an effort 

to forestall [Hikma]’s noninfringement defenses, more closely 

capture [Hikma]’s product, or delay the litigation. Then, upon 

obtaining its new patent claims, Jazz turns around and asserts those 

new patents in infringement claims against [Hikma]. Thus, the 

litigation never ends and [Hikma] is continually fighting a moving 

target.47

 47 Memorandum in Support of Roxane’s Motion for Leave to Amend Its Answers, ECF No. 

221, Jazz Pharmaceuticals, Inc. v. Roxane Laboratories, Inc., No. 2:10-cv-06108 (D.N.J. May 3, 

2013) 

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135. For example, in response to Jazz’s original complaint alleging infringement of the 

’506 patent, Hikma asserted that it would not infringe the ’506 patent because “all of the claims 

in the ’506 patent required that the sodium oxybate solution be administered using a concentrated 

medium of 500 mg/ml of sodium oxybate,” and the “administration of [Hikma]’s sodium 

oxybate solution required dilution of the concentrated medium prior to patient administration.”48 

136. Hikma disclosed this defense as part of the invalidity and non-infringement 

contentions it provided to Jazz in April and August 2011.49

137. Jazz then filed the patent applications that issued as the ’650 patent and the ’275 

patent. Jazz filed these applications on April 12, 2012, 14 years after their parent application was 

filed.50 These patents issued in September 2012 and December 2012, respectively. Both the ’650 

and ’275 patents contain claims calling for dilution of the sodium oxybate solution prior to 

patient administration. Jazz then sued Hikma in October 2012 and December 2012, alleging 

infringement of the ’650 and ’275 patents. 

138. Hikma contended that it did not infringe the ’219 or ’889 patents because the 

claims of those patents require the inclusion of “a pH adjusting agent” and Hikma’s product did 

not contain a pH adjusting agent. Jazz then filed the application for the ’650 patent, which 

included claims to compositions that do not require “a pH adjusting agent,” and then asserted the 

’650 patent against Hikma after the patent issued. 

 48 Roxane Laboratories, Inc.’s Amended Answer, Affirmative Defenses and Counterclaims to 

Plaintiff’s Complaint Regarding U.S. Patent No. 8,263,650, ECF No, 218-3, Jazz 

Pharmaceuticals, Inc. v. Roxane Laboratories, Inc., No. 2:10-cv-06108 (D.N.J. Apr. 26, 2013), 

Affirmative Defenses ¶¶ 17-18. 

49 Id., Affirmative Defenses ¶ 14. 

50 Id., Affirmative Defenses ¶¶ 19, 27. 

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139. Hikma contended that it did not infringe the ’431 patent because “[a]ll of the 

claims of the ’431 patent require that sodium oxybate be ‘added’ to an aqueous medium” and 

“[Hikma] makes its sodium oxybate solution without ‘adding’ sodium oxybate to an aqueous 

medium.” After learning of this defense, Jazz filed the patent application that issued as the ’203 

patent. Jazz filed this application on July 13, 2011. The claims of the ’203 patent, which issued 

on June 11, 2013, include claims for “admixing” sodium oxybate with an aqueous medium rather 

than “adding” sodium oxybate to an aqueous medium, claims to a method that “contacts” a salt 

of GHB with an aqueous medium, and claims that do not specify how sodium oxybate is 

combined with the aqueous medium to prepare the composition. Jazz then asserted the ’203 

patent against Hikma after the patent issued. 

140. In response, Hikma asserted that because “Jazz continues to seek and obtain new 

patents, add patents to the Orange Book, bring patent infringement suits against [Hikma], 

including to seek consolidation of all suits relating to [Hikma]’s sodium oxybate ANDA 

product,” Hikma had suffered and would “continue to suffer material prejudice by being forced 

to indefinitely defend itself against patents that were not invented by the named inventors but are 

based on information gleaned by patent attorneys during a litigation, causing [Hikma] to face an 

‘at-risk’ launch of its sodium oxybate product due to delayed resolution of this litigation.” 

141. It was still early in Jazz’s scheme that culminated in the reverse payment 

agreements, but with Hikma already discussing launch “at risk” of Jazz’s patent thicket, Jazz 

knew it needed to fortify its barriers. 

D. The Jazz “single pharmacy” REMS program for Xyrem 

142. In 2007, Congress passed the Food and Drug Administration Amendments Act 

(the “FDAAA”) that set forth a comprehensive statutory framework for a Risk Evaluation and 

Mitigation Strategies (“REMS”) program that, for particular drug products, requires a careful 

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balance between, on the one hand, the need to evaluate and mitigate risk of a drug to ensure that 

its benefits outweigh its risks, and, on the other, the potential burdens of REMS elements on 

patient access and the health care delivery system. The FDA then formalized the REMS 

regulatory program for the monitoring of medications with a high potential for serious adverse 

effect. A REMS program applies only to specific prescription drugs but can apply to brand name 

or generic drugs. 

143. When creating the REMS program, Congress was particularly concerned that 

restrictions placed on access to a particular medication through a REMS program not become an 

artifice through which brand companies impaired the ability of companies to develop similar and 

generically equivalent drug products. Congress expressly prohibited the use of restrictions on use 

to “block or delay approval” of applications under sections 505(b)(2) and 505(j) of the FD&C 

Act. 

144. Because at the time some products already had a form of a risk management 

program in place, there was a process by which the earlier approved risk program could be 

deemed a REMS program. For Xyrem, a risk management plan had been instituted as part of the 

original approval in February 2002, with a modified version of that plan being approved in 

November 2005. In March of 2008, the FDA deemed that plan to be a REMS program; however, 

Jazz was required to formally submit to the FDA a proposed REMS for review within 180 days 

of that notice. 

145. In late August 2008, Jazz requested of the FDA that the existing risk management 

plan simply be approved as the new REMS approach for Xyrem under the FDAAA. That began 

a seven-year negotiation between Jazz and the FDA over the appropriate terms for the Xyrem 

REMS. 

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146. For example, when the FDA initially approved the RiskMAP in 2002 with the 

limitation that Xyrem be dispensed only from a single central pharmacy, the FDA had been led 

to believe that to be a good way to effectuate the overall restrictions on distribution necessary for 

safe use of the drug. 

147. But in August 2009, as part of its transition from a risk management plan to a 

REMS, Jazz submitted a proposal to, among other things, remove the restriction to a single 

pharmacy and instead allow certification of multiple pharmacies. Its rationale for this proposed 

change was that it would “increase patient access without compromising patient safety.” Jazz 

also stated that the single pharmacy program in existence at that time “imposes numerous 

impediments to patient access to Xyrem, possibly depriving narcolepsy patients of an important 

medication to control their EDS and cataplexy and potentially affect their lives dramatically.” 

148. By 2011—years into the discussion—Jazz had realized it could use the ongoing 

negotiations to delay generic entry. At that time, Jazz’s 2002 RiskMAP was still under 

discussion with FDA to convert it to the REMS program. Xyrem was still not included on FDA’s 

list of current REMS. And an industry commentator states that “[a]t this point, it’s hard to say 

which will happen first: Jazz fixing its RiskMAP/REMS, or the generic appearing on the 

market.” 

149. In February 2014, Jazz completed the flip-flop, filing a formal dispute resolution 

request, appealing an FDA notification and claiming that the agency’s “assertion that the closedloop distribution system for Xyrem is no longer necessary is not only unsupported, it puts 

patients and others at risk.” Jazz also argued that the FDA “lacked statutory authority to modify a 

REMS ‘deemed’ to be in effect by operation of FDAAA, and alternatively, even if FDA did have 

such authority, it could only be exercised to add restrictions to a REMS, not to modify or remove 

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elements.” But even at that time, the Jazz CEO acknowledged that the single pharmacy REMS 

was “a piece of Xyrem exclusivity.” And at an August 2014 meeting to discuss the ongoing 

dispute, a Jazz representative acknowledged that it might be possible for a distribution system 

that involves two, and perhaps more, specialty pharmacies to effectively prevent the abuse, 

misuse, and diversion of sodium oxybate. 

150. During the process, the FDA expressed two primary public health goals: (i) to 

have a REMS that assures safe use of the drug, and (ii) to ensure that the REMS does not stand 

in the way of generic approval. But eventually, the FDA folded to Jazz’s litigiousness. 

151. In eventually granting the single pharmacy approach for the REMS, the FDA 

wrote that “[i]n light of the significant drain on Agency resources posed by the dispute, and the 

fact that the outcome of Jazz’s challenge to the Agency's legal authority to require a modification 

to a ‘deemed REMS’ had the potential to affect only a small number of drug products, the 

Agency decided to approve the REMS Jazz had proposed (i.e., with the single, central pharmacy 

limitation), and deny the dispute as moot.” The FDA’s disapproval of Jazz’s anticompetitive acts 

was clear: 

FDA is mindful of the statutory requirement under the FD&C Act 

that [terms of use] be ‘commensurate with the specific serious 

risk[s] listed in the labeling’ of the drug, that [terms of use] ‘not be 

unduly burdensome on patient access to the drug,’ and ‘to the 

extent practicable,’ that [terms of use] be structured ‘so as to 

minimize their burden on the health care delivery system.’ We also 

note that it is part of FDA’s statutory mandate to approve generic 

drugs that meet the standard for approval.

Pursuant to these statutory provisions, FDA has sought to finalize 

and approve the REMS for Xyrem since 2008. In doing so, we 

have faced repeated, lengthy delays. The REMS you submitted on 

November 7, 2014, which we are now approving, contains a 

requirement that Xyrem be distributed only by a single pharmacy. 

Jazz’s position that a single pharmacy is critical to the safe use of 

Xyrem has not been a consistent one. In 2009, Jazz submitted a 

supplemental NDA for a new indication for Xyrem for treatment of 

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fibromyalgia in which it proposed to include multiple certified

pharmacies. 

However, by early 2011, after FDA declined to approve the 

fibromyalgia indication, Jazz changed its position. By that time, 

Jazz had been granted several patents related to its single pharmacy 

distribution system. In its 2013 SEC filings, Jazz noted that it 

expected FDA modifications to the Xyrem REMS and stated that, 

‘depending on the extent to which certain provisions of our Xyrem 

deemed REMS which are currently protected by our method of use 

patents covering the distribution of Xyrem are changed as part of 

updating our REMS documents, the ability of our existing patents 

to protect our Xyrem distribution system from generic competitors 

may be reduced.’ This statement, in conjunction with Jazz’s change 

in position regarding the necessity of the single pharmacy 

requirement, suggests Jazz’s awareness that the Xyrem REMS 

could have the effect of blocking or delaying approval of generic 

versions of Xyrem. Such an outcome would reflect the use of 

REMS to block or delay generic competition in a manner 

inconsistent with section 505-1(f)(8). It would also place an 

unjustified burden on patient access and on the healthcare delivery 

system. 

FDA is approving the REMS Jazz submitted on November 7, 

2014, closing a chapter on a REMS that has been pending for 7 

years -- far longer than could have been reasonably anticipated

when FDAAA was enacted. Our action approving the REMS 

submitted by Jazz should not be construed or understood as 

agreement with Jazz that limiting dispensing to a single pharmacy 

is the only way to ensure that the benefits of Xyrem outweigh the 

risks under section 505-1 of the FD&C Act. We continue to be 

concerned that limiting the distribution of Xyrem to one pharmacy 

imposes burdens on patient access and the healthcare delivery 

system. No other currently approved REMS requires a sponsor to 

limit dispensing to a single pharmacy. 

152. The industry’s Pink Sheet subsequently reported that “the FDA’s tone of 

disapproval is bound to be cited in the context of any antitrust cases that ensue.” 

E. The Jazz 2012 citizen petitions to the FDA. 

153. In addition to filing patent infringement lawsuits against Hikma seeking to block 

Hikma’s launch in court and abusing the REMS system, Jazz filed citizen petitions with the FDA 

to slow down the ANDA review and approval process. 

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154. On May 18, 2012, Jazz submitted to FDA a baseless citizen petition, Docket No. 

FDA-2012-P-0499, asking FDA to (i) immediately publish whether generic Xyrem ANDAs were 

required to prove bioequivalence to the brand using in vitro testing, in vivo testing, or both; (ii) 

not accept, review, or approval any ANDAs until after this information had been published, and 

(iii) require in vivo bioequivalence testing, including both fed and fasting conditions, “and a 

demonstration of onset of drug action similar to Xyrem,” for any proposed ANDA product that 

differs from the brand in manufacturing process, pH, excipients, impurities, degradants or 

contaminants. 

155. Jazz attached forty-nine exhibits to its May 2012 citizen petition, including 

numerous scientific studies spanning many hundreds of pages and, at footnote 2, an implicit 

threat to sue if FDA’s review and response was not sufficiently thorough: “it would . . . be 

arbitrary and capricious for FDA to deny [the requests] without a substantive response.” 

156. On July 10, 2012, before FDA had responded to Jazz’s May 2012 citizen petition, 

Jazz submitted to FDA a second citizen petition concerning the requirements for submission of 

ANDAs referencing Xyrem, Docket No. FDA-2012-P-0733, and asked the FDA to rescind the 

acceptance of any previously-accepted ANDA (including the ANDA submitted by Hikma) that 

did not include a proposed risk management system when accepted for FDA review, arguing that 

such ANDAs would not contain the same labeling and conditions as Xyrem, as required by law. 

157. The July 2012 citizen petition further requested that the FDA (i) not accept for 

review any ANDA referencing Xyrem that did not contain, at the time of its submission, a 

proposed risk management system sufficient to demonstrate that the new generic drug product 

has the same labeling and conditions of use as Xyrem; and (ii) determine that if any sponsor, 

including Hikma, submitted an ANDA referencing Xyrem that did not contain a proposed risk 

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management system at the time it was accepted for review, or later submits or resubmits an 

ANDA that contains an adequate proposed risk management system, then such ANDA should be 

subject to a renewed automatic 30-month stay of approval in the event Jazz timely opted to 

initiate patent litigation based on such notice. 

158. On November 13, 2012, the FDA denied Jazz’s May 18, 2012 citizen petition, 

dutifully outlining its bases in 20 pages of single-spaced text and eighty-six footnotes. 

159. The FDA found that, contrary to Jazz’s contention, it is not required to publish 

bioequivalence guidance prior to accepting ANDAs, nor is it required to reject ANDAs 

submitted prior to such publication. 

160. In denying Jazz’s May 2012 citizen petition, FDA noted that publication of 

bioequivalence guidance is intended to benefit ANDA applicants, whereas the only beneficiary 

of Jazz’s baseless interpretation is brand manufacturers like Jazz, “who will benefit from a delay 

in generic competition in the marketplace.” 

161. On December 13, 2012, the FDA denied in its entirety Jazz’s July 2012 citizen 

petition finding, as with Jazz’s May 2012 citizen petition, that none of the requests had merit. 

F. The Jazz lawsuits against at least eight other generic companies. 

162. After the first-to-file ANDA by Roxane, at least eight other generic manufacturers 

submitted ANDAs for approval of AB-rated generic versions of Xyrem: 

OTHER ANDA SUBMISSIONS 

ANDA Applicant ANDA No. Date of Initial Paragraph 

IV Notice Letter to Jazz 

Amneal Pharmaceuticals, LLC 203631 Dec. 10, 2012 

Par Pharmaceutical, Inc. 205403 Nov. 20, 2013 

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OTHER ANDA SUBMISSIONS 

ANDA Applicant ANDA No. Date of Initial Paragraph 

IV Notice Letter to Jazz 

Ranbaxy Laboratories Limited and 

Ranbaxy Inc. 203351 June 3, 2014 

Watson Laboratories, Inc. 204952 Oct. 29, 2014 

Wockhardt Bio AG 207526 June 8, 2015 

Lupin Ltd. and Lupin Pharmaceuticals 

Inc. 207415 July 23, 2015 

Ascent Pharmaceuticals, Inc. 210523 June 14, 2017 

Mallinckrodt plc, Mallinckrodt Inc., and 

Mallinckrodt LLC 210936 Nov. 21, 2017 

163. After each ANDA applicant sent its initial paragraph IV notice letter to Jazz, Jazz 

filed patent infringement actions against each applicant. And as Jazz acquired more and more 

patents, Jazz brought additional suits against these other would-be Xyrem generic drugmakers. 

164. Under the Hatch-Waxman Act, Jazz’s filing of these lawsuits—irrespective of 

their prospects of success—triggered automatic 30-month stays, running from the date Jazz 

received the generic manufacturer’s paragraph IV notice letter. These stays prevented the FDA 

from granting final approval of these ANDAs until the earlier of (i) the expiration of the thirtymonth stay, or (ii) entry of a final judgment that the patents at issue were invalid, unenforceable, 

and/or not infringed. 

G. The notorious Jazz price increases for Xyrem. 

165. Jazz was a small, relatively unsuccessful biotech before it leveraged the company 

to buy the Xyrem franchise. When in 2005 Jazz first acquired Orphan Medical, a one-year 

supply of Xyrem would cost about $5,000 to $10,000. But after a series of shockingly large price 

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increases by Jazz for each of seven successive years, a one-year supply cost about $62,000 to 

$124,000.51 

166. In 2014, Jazz came under heavy scrutiny for alleged pricing abuse on Xyrem. For 

example, in May of 2014, Bloomberg published a ranking of drug price increases from 2007 to 

2014. Xyrem ranked first with an overall increase of 841% from 2007 to 2014. Bloomberg’s data 

indicated the following percentage price increases: 

Year Price Per mL % Change from Previous 

Year 

2007 $2.04 - 

2008 $3.09 51% 

2009 $4.60 49% 

2010 $6.50 41% 

2011 $9.17 41% 

2012 $12.97 41% 

2013 $17.15 32% 

2014 $19.20 12% 

167. The following chart details Jazz’s dramatic pricing increases by tracking the list 

prices for Xyrem over the life of Jazz’s monopoly over the drug: 

 51 The recommended dose of Xyrem ranges from 4.5 to 9 grams, which converts to a monthly 

dosage range of 270 to 540 mL. So, in 2007, the yearly cost of Xyrem ranged from $6,609.60 to 

$13,219.20. But by 2014, the yearly cost for the drug had ballooned to a range from $62,208 to 

$124,416. 

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168. The pricing history of Xyrem stands in stark contrast to that of other branded 

drugs. From 2009 to 2018, Xyrem’s WAC price increased a staggering 525%, as compared to an 

average of just over 100% for all other brand drugs for which data is available: 

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H. The patents in the ’730 family are found invalid. 

169. Beginning in January 2015, would-be generics for Xyrem filed a series of 

petitions with the PTAB for inter partes review of the ’730 family of patents relating to the 

distribution system for sensitive drugs. Claims in all of the ’730 family of patents were 

challenged in the proceedings. 

170. Collectively, and as consolidated, Par and Amneal challenged claims in the ’730, 

’106, ’107, ’059, ’988, ’182, and ’936 patents. 

171. Each of the challenged patents derive from the same original application: U.S. 

Patent Application No. 10/322,348, filed December 17, 2002 by Orphan Medical, and each 

contains, as noted above, claims relating to a drug distribution system and method that utilizes a 

central pharmacy and database to track prescription. 

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172. On April 28, 2016, Jazz settled with Wockhardt (one of the generics that was 

pressing IPR review), resolving not only the IPR proceedings, but the patent infringement 

litigation Jazz had filed against Wockhardt. That settlement agreement, according to Jazz’s 

public filings, granted Wockhardt a license to manufacture, market, and sell its generic version 

of Xyrem on or after December 31, 2025, or ostensibly “earlier” depending on the occurrence of 

certain events (the import of which is discussed later). The specific terms of the settlement 

agreements are confidential. Jazz and Wockhardt then sought, and were granted, termination of 

the IPR proceedings as to Wockhardt. 

173. Days later, on May 9, 2016, Jazz settled with Ranbaxy. Ranbaxy, too, was granted 

a license to manufacture, market, and sell its generic version of Xyrem on or after December 31, 

2025, or ostensibly “earlier” depending on the occurrence of “certain events” (again to be 

discussed later). That settlement also is confidential. With its settlement, Ranbaxy’s IPRs and 

civil counterclaims in the Hatch-Waxman litigation pending against it were terminated. 

174. From July 2016 to March 2017, with just Amneal and Par remaining as 

petitioners, the PTAB issued a series of six decisions finding that “by a preponderance of the 

evidence” all claims of the ’730, ’106, ’107, ’059, ’182, ’988 patents, and claims 24, 26, and 27 

of the ’963 patent, were unpatentable as obvious. 

175. The board found that these claims, which related to Jazz’s REMS program and 

described a centralized database containing patient, physician and prescription information, were 

obvious because Orphan Medical had disclosed the program long before it filed the first patent 

application, i.e., Orphan’s disclosure at a publicly-held FDA Advisory Committee meeting on 

June 6, 2001 and such information was posted to the FDA’s website. 

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176. Jazz appealed the ruling to the Federal Circuit. In July 2018 that court affirmed 

the PTAB invalidity rulings, eviscerating Jazz’s REMS patent portfolio for Xyrem. 

I. Hikma obtains final ANDA approval for generic Xyrem. 

177. On January 17, 2017, with its infringement trial with Jazz just six months away, 

Hikma obtained final approval from FDA for its generic Xyrem ANDA. 

178. In its approval of Hikma’s ANDA, the FDA also issued a decision to waive the 

requirements for a single, shared system REMS for Xyrem, meaning that Hikma was no longer 

required under FDA regulations to seek a license to rely on Jazz’s Xyrem REMS protocol. The 

decision referenced the ANDAs of Hikma, Ohm, and Amneal, among other applicants whose 

names were redacted, and provided that they or any other generic sodium oxybate oral solution 

manufacturer could also rely on Hikma’s REMS program (and not be required to use Jazz’s). 

179. In issuing its decision, the FDA reiterated the ANDA filers’ allegations that “Jazz 

ha[d] engaged in a strategy that ‘entails serial attempts to impose unreasonable contractual terms 

and conditions on the ANDA [filers] while concurrently issuing self-serving statements to FDA 

and the ANDA [filers] about Jazz’s commitment to the process.”52 This “strategy” of obstructive 

negotiation by Jazz of the single, shared program went on for more than three years. Ultimately, 

the FDA determined that “[i]n the absence of a waiver of the SSS [single, shared system] 

requirement, the ANDA [redacted] and Jazz’s failure to agree to SSS terms is likely to further 

delay the approval of a generic version of sodium oxybate,” and accordingly waived the single, 

shared requirement for Xyrem.53 

 52 See FDA Memorandum, Decision to waive the requirement for a single, shared system 

REMS for sodium oxybate oral solution, January 17, 2017, at 11,

https://www.fda.gov/media/102913/download. 

53 Id. at 12-13. 

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J. The Jazz-Hikma reverse payment agreement. 

180. By the spring of 2017, Hikma had received final FDA approval for its generic 

product, and no statutory exclusivities stood in the way for its market entry. Hikma’s challenge 

to Jazz’s remaining Xyrem patents was set for trial only a few weeks away. Under its approved 

application, there was no legal obstruction to Hikma entering the U.S. market with its own 

approved product, its own pharmacy arrangements, and its own approved REMS program. 

181. Such a full market entry by Hikma would likely spur the immediate launch of a 

second generic in the form of a launch of a bona fide Jazz authorized generic. And to this point, 

Jazz had already settled with at least five other generic Xyrem ANDA filers, each of which was 

granted a license to enter with their generic product on or after December 31, 2025, or earlier 

depending on the occurrence of “certain events.” Given tentative approvals already granted to 

other generic companies, Hikma’s entry into the market would likely be followed, six months 

later, by other generic entries, thereby fully “genericizing” the U.S. market for sodium oxybate 

oral solution. 

182. However, in early April 2017 Jazz and Hikma entered into an unlawful reverse 

payment agreement under which generic entry in the market for sodium oxybate oral solution 

was delayed and impaired for years. 

183. The April 2017 Jazz-Hikma agreement was, in part, memorialized in three 

documents, a “Settlement Agreement,” a “License Agreement,” and an “AG Agreement,” each 

of which was executed at the same time and effective upon dismissal of the last of the 

infringement lawsuits between Jazz and Hikma. Although these documents evince some of the 

agreements between Jazz and Hikma, other tacit agreements were also reached between Jazz and 

Hikma at the time. 

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184. The document styled as a “Settlement Agreement” between Jazz and Hikma was 

partially disclosed in the public securities filings for Jazz. Jazz and Hikma agreed to conceal 

from the public the other two documents as well as the tacit agreements between them. All the 

written and tacit arrangements between Jazz and Hikma in April of 2017 were negotiated 

simultaneously, are interdependent, and are collectively referred to in this complaint as the 

“Jazz-Hikma agreement.” 

185. Under the Jazz-Hikma agreement, Jazz and Hikma agreed to settle all of the 

outstanding patent litigation between them over the Xyrem patents. But the settlement was not 

based on the merits of the underlying patent litigation; instead, it reflected anticompetitive 

agreements reached between them. 

186. Under the agreement, Jazz promised to provide Hikma with a form of an 

authorized generic distributorship (the “Hikma AG”) under which Hikma would have the right to 

sell an authorized generic version of Xyrem in the U.S. and its territories, districts, possessions 

and the Commonwealth of Puerto Rico for an initial term of six months commencing “on 

January 1, 2023, or earlier under certain circumstances.” 

187. Under the agreement, after six months, Hikma would have the right to extend the 

initial six-month term and continue to sell an authorized generic version of Xyrem for up to a 

total of five years, i.e., through January 1, 2028. 

188. Under the agreement, and as Jazz reported, during the period of Hikma AG sales, 

Jazz would “receive a meaningful royalty . . . on net sales of the authorized generic version . . . 

with the royalty rate increasing [during the initial period] based on increased net sales of the 

authorized generic version of Xyrem” and that a “substantial increase in the royalty rate” would 

apply if Hikma’s sales of the authorized generic extended beyond one year. 

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189. Under the agreement, in addition to the “royalty” payments, Hikma would pay 

Jazz for supply of the authorized generic version of Xyrem. 

190. Under the agreement, the timing of the right to enter with an authorized generic 

on January 1, 2023 “or earlier under certain circumstances” ostensibly meant earlier events 

related to the market entry of other generic versions of Xyrem, a final decision that all unexpired 

claims of the Xyrem patents are invalid and/or unenforceable, or a substantial reduction in 

Xyrem net sales over specified periods of time. 

191. Under the agreement, the Hikma AG product was required to be distributed 

through the FDA-approved Xyrem REMS, i.e., the REMS program approved for Jazz’s branded 

Xyrem, While the FDA’s approval of Hikma’s ANDA included a waiver that permitted Hikma’s 

ANDA product to use a separate REMS from the Xyrem REMS, under the agreement JazzHikma agreement, Hikma could not do so with the Hikma AG. 

192. Under the agreement, Hikma agreed to reimburse Jazz for a portion of the 

services costs associated with the operation of the Xyrem REMS and distribution of the 

authorized generic version of Xyrem. 

193. Under the documents in the agreement, Jazz and Hikma stated their agreement 

“permits [Hikma] to develop and implement the separate REMS approved with its ANDA, and 

permits Jazz to challenge the FDA’s waiver decision and the separate REMS approved in 

connection with [Hikma’s] ANDA, and to raise any other safety issues pertaining to Xyrem.” 

194. Under the agreement, the parties agreed that Hikma eventually would be allowed 

to launch its FDA-approved ANDA product. In the agreement, Jazz granted Hikma a nonexclusive license under the Xyrem patents to make, have made, and market its generic sodium 

oxybate product under the Roxane ANDA in the U.S., Puerto Rico, districts and territories, 

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which license was to be effective as early as six months after Hikma had been selling the 

authorized generic. However, if Hikma elected to launch its own generic product, Hikma would 

no longer have the right to sell the Hikma authorized generic product. In a later earnings call, 

Jazz Chairman and CEO Bruce Cozadd acknowledged its Hikma AG rights would expire if 

Hikma chose to launch its ANDA product: 

Hikma has a license to launch its generic product as of July 1,

2023, but it will no longer have the right to sell an AG product 

through the Xyrem REMS if it elects to do so. 

195. Finally, under the agreement, Jazz agreed to pay Hikma an undisclosed sum of 

money ostensibly in “recognition of the savings inuring to Jazz in terms of the avoidance of costs 

and expenditure of time and resources” prosecuting the litigation against Hikma. 

196. The April 2017 Jazz-Hikma agreement has a series of anticompetitive provisions 

that, taken together against the realities of pharmaceutical regulation and industry economics, 

were designed to, have had, and continue to have, substantial anticompetitive consequences. 

197. First, the Jazz-Hikma agreement was designed to, and has had, the effect of 

delaying the entry into the market of Hikma’s first-to-file ANDA generic until at least July 2023. 

Absent the unlawful payments to Hikma, a reasonable company in the position of Hikma would 

likely have entered the market as early as January 2018. That entry was delayed until at least July 

2023, i.e., the date that technically, under the agreement, Hikma could decide to stop selling the 

Hikma AG and instead launch the Hikma FDA-approved generic. 

198. Second, the Jazz-Hikma agreement was designed to, and may well have, the effect 

of delaying the entry into the market of Hikma’s first-to-file ANDA generic well past July 2023 

and until the end of December 2025. While technically, under the agreement, Hikma may launch 

its FDA-approved generic by July 2023, doing so would (a) forfeit its Hikma AG rights, (b) void 

any incentives by which Jazz might withhold launch its own AG product (e.g., the Hikma AG 

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“royalties”), and (c) trigger the rights of some other would-be generics to enter the market. As a 

result, Hikma would only switch from the Hikma AG product to its own product in the event that 

the economics were better on the ANDA side, which was likely to occur only in the event of 

bona fide competition from other ANDA-approved generic products. In short, the economics 

behind the agreements were designed to, and may well have, the likely impact of delaying entry 

of Hikma’s generic product until the end of 2025, i.e., when the agreed entry date arrives for all 

would-be makers. The Jazz-Hikma agreement was designed to, and does have, the effect of 

prolonging as long as feasible the period of duopoly supracompetitive prices for Xyrem and the 

Hikma AG product. 

199. The consequence has been, and will be, that supracompetitive prices for Xyrem 

are unnecessarily charged for sodium oxybate oral solution while only NDA-approved versions 

of the product are on the market, and those supracompetitive prices will remain until full and fair 

generic competition. Hikma’s agreement to delay entry was induced by the market allocation 

payments in the agreement. 

200. Third, the Jazz-Hikma agreement was designed to, and does have, an explicit or 

de facto commitment on the part of Jazz not to launch its own authorized generic of Xyrem 

during at least the first six months that Hikma eventually on the market (the “Jazz no-AG 

commitment”). Among other things, (i) by providing that the first-to-file generic—Hikma—

would be the company that would enter as an authorized generic, and (ii) by providing 

“meaningful” payments from Hikma back to Jazz during the time it was on the market with the 

Hikma AG, Jazz would have no incentive to also launch a bona fide AG of its own to challenge 

the Hikma AG sales. Instead, the agreement was designed to, and does have, the effect that 

during at least the first six months of entry (before subsequent generics were allocated a slice of 

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the market in their own separate pay-for-delay agreements, as discussed below), the Hikma AG 

would be the only authorized generic. 

201. The consequence is that at least during the initial six-month period after the 

Hikma AG is eventually launched on January 1, 2023, the only two sodium oxybate oral solution 

products on the market will likely be Xyrem and the Hikma AG, with each then able to 

command highly supracompetitive prices for sodium oxybate oral solution. And because Hikma 

could not sell its own generic while it was selling the Hikma AG, the agreement ensured that 

there was only one generic—of any kind—on the market. 

202. Fourth, the Jazz-Hikma agreement was designed to, and does have, the effect of 

significantly limiting both the extent to which Hikma AG sales would cut into Xyrem sales, and 

the extent to which Hikma AG sales would be discounted to Xyrem sales. Under the agreement, 

Hikma was required to use the Xyrem REMS for its Hikma AG product. As a result, all Hikma 

AG product will be required to be delivered by Jazz directly to the same, single central pharmacy 

used by Jazz for Xyrem—it appears that Hikma would never take delivery of any AG product, 

nor have the ability to introduce competition into the market by increasing the number of 

companies dispensing to patients. 

203. Fifth, the Jazz-Hikma agreement was designed to, and has had, the effect of 

hindering other generic companies from coming into the marketplace. It does so by delaying the 

availability of a second REMS program, with additional dispensaries, for use by later generic 

entrants. The requirement in the agreement that Hikma use the Xyrem REMS for the Hikma AG 

product reduced the availability for other generics to gain market entry by use of the Hikma 

ANDA approved REMS, delaying later generic market entry. 

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204. Sixth, the Jazz-Hikma agreement was designed to, and has had the effect of, 

hindering later generic entry by providing a form of a most favored entry clause (sometimes 

given the dubious term “acceleration clause”) that would provide disincentives to later generics 

to continue challenges to the Xyrem patents. By allowing Hikma to enter with the Hikma AG 

product on the “earlier events” of either “market entry of other generic versions of Xyrem” or “a 

final decision that all unexpired claims of the Xyrem patents are invalid and/or unenforceable,” 

the most favored entry provisions reduced incentives for other generics to seek earlier generic 

entry. 

205. Seventh, the fact that the Jazz-Hikma agreement effectuated delayed market entry 

by Hikma is shown by the entry term enabling earlier Hikma AG entry in the event of “a 

substantial reduction in Xyrem net sales over specified periods of time.” Jazz did not have any 

arguable patent rights to exclude entry dependent on the extent of its Xyrem sales, nor did Hikma 

have any argument that it would not infringe a valid Xyrem patent claim based on the extent of 

Xyrem sales. Instead, the provision was added to the overall agreement because Hikma was 

delaying its market entry, and in return it needed a commitment that the size of that market 

would remain at specified levels; if not, it no longer needed to delay its entry. 

206. Finally, the fact that the Jazz-Hikma agreement is anticompetitive by design and 

execution is shown by the terms that say the agreement “permits [Hikma] to develop and 

implement the separate REMS approved with its ANDA, and permits Jazz to challenge the 

FDA’s waiver decision and the separate REMS approved in connection with [Hikma’s] ANDA, 

and to raise any other safety issues pertaining to Xyrem.” At the time of the settlement, Hikma 

already had FDA approval for its separate REMS program, a process that Jazz had fought tooth 

and nail. With the parties now settling outstanding issues yet preserving the ability of Jazz to 

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challenge the FDA’s approval of the Hikma REMS program, the parties were now clearly on the 

same, anticompetitive side of seeking to limit the ability of other generics to gain market access. 

207. The Jazz-Hikma agreement contains an unlawful reverse payment forbidden by 

the Supreme Court in FTC v. Actavis. The payment takes several forms. 

208. First, the large payment to Hikma takes the form of the Jazz no-AG commitment, 

i.e., the promise by Jazz (either express, or implied by operation of the other terms of the 

settlement) not to launch its own AG product in competition with the Hikma AG. Unlike a 

typical, lawful patent settlement (where the parties agree to an entry date based on the relative 

merits of their legal positions), the Jazz-Hikma agreement includes a large and unlawful payment 

from Jazz to Hikma in exchange for Hikma’s agreement to delay generic competition until later 

than the date Hikma would otherwise have been willing to accept. The absence of a bona fide

AG on the market is not value that Hikma could not have gained in the litigation nor procured if 

it had launched its own, ANDA-approved product. 

209. Second, the large payment to Hikma takes the form of de facto limitations on 

price competition that enable both Jazz and Hikma to make more money than they would under 

competitive conditions. The deal is structured to provide a “meaningful royalty” from Hikma to 

Jazz during the Hikma AG term, with the “royalty” rate increasing based on increased net sales 

of the Hikma AG. In effect, while Hikma sells some of the Hikma AG, the payback to Jazz is 

relatively small, but the payback increases when Hikma’s net sales increase too much (making, 

of course, Hikma’s ability to price against Jazz’s product less likely). In effect, Hikma and Jazz 

allocate the market and keep prices high. This enables Hikma to earn far more through a 

collusive scheme than it would if it entered lawfully with its own ANDA-approved product. 

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210. Third, the provision that permits Hikma to use the Xyrem REMS program is also 

a large payment. By using the Xyrem REMS program rather than its own, FDA-approved Hikma 

REMS, Hikma can distribute product to patients without providing other generics a pathway to 

the market. Because Hikma has not operationalized its separate REMS program (agreeing 

instead to delay launching its ANDA product and sell an allocation of AG provided by the brand 

and sold under the brand’s REMS program), subsequent generics faced yet another hurdle on 

their path to market: They would need to establish their own REMS program from the ground up 

before selling their generic versions of Xyrem. This is value that Hikma could not have gained in 

the litigation nor procured if it had launched its own, ANDA-approved product. 

211. The combined reverse payments from Jazz to Hikma—in the forms of the no-AG 

commitment, the price support arrangement, and the use of the Xyrem REMS—is large under 

any view of the facts and within the meaning of Actavis. 

212. Under the Jazz-Hikma agreement, Jazz is required to pay to Hikma a sum of 

money that approximates the avoided litigation costs of Jazz by settling the patent infringement 

litigations. As a result, any further payment of value from Jazz to Hikma is likely a large reverse 

payment, i.e., it will exceed avoided litigation costs. 

213. Prior to discovery, precise quantification of the size of the large reverse payment 

that exists (beyond the avoided litigation costs) is difficult. However, several parameters apply. 

214. The Xyrem market at the time of projected bona fide generic entry would have 

been about $1.5 billion per year. Under competitive conditions, a first-to-file generic company 

entering that market might expect about 40-45% market penetration, with the other 40-45% 

penetration going to a bona fide authorized generic. Facing competition from both the brand and

two generics in the market, generic prices might likely fall 40-50%. So, during the first six 

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months, the first-to-file generic might likely estimate sales of about $150 million to $202.5 

million. 

215. Under the anticompetitive conditions created by the Jazz-Hikma agreement, 

Hikma stands to make markedly more. Putting aside functional limitations on quantity and price 

calibrated by undisclosed provisions of the agreement (addressed momentarily), under typical 

industry assumptions the Hikma AG will gain 80-90% of generic sales, and without other AG 

competition, will price the Hikma AG higher than it would under competitive conditions (e.g., 

80% of the brand). The resultant sales to the Hikma AG under this parameter would be between 

$480 million to $540 million. 

216. Under these parameters—shown simply to illustrate that a first-to-file generic can 

make huge sums more if it cuts an anticompetitive no-AG deal with the brand—Hikma would 

stand to make a very significant amount of money more if it did not share some of that money 

back with Jazz. (Under these parameters, in the vicinity of about $225 million to $360 million 

more). 

217. In this case, the variable “royalties” in the Jazz-Hikma agreement are intended 

both (a) to kick back to Jazz some of that windfall to make up for the large amount Hikma gains 

by being the only generic on the market, and (b) to maintain a higher than usual level of pricing 

by Hikma. 

218. In this case, there are unknown and complicating factors by both the varying 

“royalties” and the intended longevity of the lucrative Hikma AG that forestalls bona fide

generic entry. But as a matter of sound applied microeconomics, in all events Hikma receives a 

payment markedly larger than it could review if it had entered the market under competitive 

conditions. 

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219. This calculation only accounts for the revenues to Hikma during the first year 

after launch. The agreement permits Hikma’s AG sales to be extended for up to five years. It is 

fair to add to the parameters for measuring the size of the payment to Hikma that the size will 

increase due to the likely longer term of the Hikma AG. 

220. On April 6, the day following the announcement of the Jazz-Hikma agreement, 

Jazz’s stock rose sharply, from $140.65 at the close of markets on April 5, to $153.88 per share 

at the close on April 6, representing over 9% increase in value on septuple the normal trading 

volume. These price and volume changes are shown in the charts below: 

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221. This change represents an increase in Jazz’s adjusted market capitalization of 

$785 million, as shown in the right-hand column of Table 1, below. 

222. When analyzed using established methods of econometric modeling (reflected in 

Tables 1 and 2, below) the probability that the April 6, 2017 increase in Jazz’s share price and 

trading volume occurred by chance is approximately zero, as shown in the “p-value” columns, 

below. Rather, it was a reaction to the Jazz-Hikma agreement. 

TABLE 1: STOCK PRICE MOVEMENTS AROUND THE JAZZ-HIKMA 

AGREEMENT 

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TABLE 2: ABNORMAL VOLUME OF TRADING IN JAZZ SHARES AROUND THE 

JAZZ-HIKMA AGREEMENT 

223. Stock prices reflect investors’ expectations about a company’s ability to continue 

generating cash flows and value for shareholders. Changes in the stock price reflect changes in 

these expectations. 

224. The spike in Jazz’s stock price implies that, prior to the settlement, the company’s 

shareholders were expecting generic competition to occur on a date earlier than permitted under 

the terms of the Jazz-Hikma agreement. There was also no corresponding drop in the price of 

Hikma’s stock price. 

225. The magnitude of the increase in Jazz’s stock cannot be explained by factors such 

as increased certainty or other business arrangements. Rather, the jump in Jazz’s stock price 

suggests the settlement included a payment to extend the agreed upon entry date later than was 

otherwise expected to occur and is thus evidence of the anticompetitive effects of the settlement. 

K. Jazz enters into unlawful reverse payment agreement with Par, Lupin, and Amneal. 

226. By 2018, Jazz had effectively forestalled generic entry for sodium oxybate oral 

solution. But while Hikma (the first-to-file ANDA applicant) and several other generics had 

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abandoned their challenges to the Xyrem patents, other generic companies continued to press 

forward. And if any of these later challengers succeeded, the entire market for sodium oxybate 

would become genericized, and along with that, almost all of Jazz’s Xyrem sales. But settling 

these remaining patent challenges in a lawful manner based on the merits (or lack thereof) of 

Jazz’s patent position would likely mean having to concede to an agreed entry date markedly 

earlier than had been the case for others. Competitive conduct would result in earlier generic 

entry for sodium oxybate. 

227. Over the course of 2018, then, Jazz worked a series of anticompetitive reverse 

payment settlements with the three remaining, serious challengers to the Xyrem patents. 

228. In January 2018, Jazz and generic maker Par entered into an anticompetitive 

reverse payment agreement (the Jazz-Par agreement”). 

229. Under the agreement, Jazz granted Par a right to sell a limited volume of an 

authorized generic version of Xyrem (the “Par AG”) for a term beginning July 1, 2023, or earlier 

under certain circumstances, and ending on December 31, 2025. The volume of AG that Par was 

permitted to sell was limited to “a low single digit percentage” of Xyrem sales volume during the 

calendar year preceding the entry date of the Par AG. In effect, Jazz simply agreed to pay to Par 

a share of the supracompetitive profits it was gaining through the anticompetitive conditions it 

had created. 

230. In exchange for this share of Jazz’s brand Xyrem revenue (via volume-limited AG 

supply), Par agreed to abandon its challenge to Jazz’s patents and delay launch of its own, true 

generic until December 31, 2025. 

231. At the time of entering into the Jazz-Par agreement, Par was aware of the 

arrangements between Jazz and Hikma. Although unlawful, Par’s acceptance of the terms of the 

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Jazz-Par agreement only made sense if Par knew that the Jazz-Hikma agreement operated, as a 

practical matter, as a limitation on Hikma’s sales as well. 

232. By entering into the Jazz-Par agreement, Par was also agreeing to, and becoming 

a part of, the overall arrangements to allocate the market for sodium oxybate oral solution. Along 

with the explicit market allocation arrangements, the Jazz-Par agreement also provided a socalled “acceleration clause,” which facilitated the horizontal market share by assuring that no 

participant to the market share would be able to jump the line to early generic entry. 

233. Because Par was agreeing to delay its market entry, the Jazz-Par agreement also 

contained a provision under which the agreed entry date would be accelerated in the event of a 

substantial reduction in Xyrem net sales over specified periods of time. 

234. The reverse payment from Jazz to Par is objectively valued in at least the tens of 

millions of dollars and constitutes a large and unexplained payment exceeding any reasonable 

estimate of saved litigation costs. 

235. In June 2018, Jazz and generic maker Lupin entered into an anticompetitive 

reverse payment agreement (the “Jazz-Lupin agreement”). 

236. Under the agreement and as it had done with Par, Jazz granted Lupin a right to 

sell a limited volume of an authorized generic version of Xyrem (the “Lupin AG”) for a term 

beginning July 1, 2023, or earlier under certain circumstances, and ending on December 31, 

2025. The volume of AG that Lupin was permitted to sell was limited to “a low single digit 

percentage” of Xyrem sales volume. In effect, Jazz simply agreed to pay to Lupin a share of the 

supracompetitive profits Jazz was gaining through the anticompetitive conditions it had created. 

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237. In exchange for this share of Jazz’s brand Xyrem revenue (via volume-limited AG 

supply), Lupin agreed to abandon its challenge to Jazz’s patents and delay launch of its own, true 

generic until December 31, 2025. 

238. At the time of entering into the Jazz-Lupin agreement, Lupin was aware of the 

arrangements between Jazz, Hikma, and Par. Although unlawful, Lupin’s acceptance of the 

terms of the Jazz-Lupin agreement only made sense if Lupin knew that the Jazz-Hikma-Par 

agreements operated, as a practical matter, as limitations on the other AG sales. 

239. By entering into the Jazz-Lupin agreement, Lupin was also agreeing to, and 

becoming a part of, the overall arrangements to allocate the market for sodium oxybate oral 

solution. Along with the explicit market allocation arrangements, the Jazz-Lupin agreement also 

provided a so-called “acceleration clause,” which facilitated the horizontal market share by 

assuring that no participant to the market share would be able to jump the line to early generic 

entry. 

240. Because Lupin was agreeing to delay its market entry, the Jazz-Lupin agreement 

also contained a provision under which the agreed entry date would be accelerated in the event of 

a substantial reduction in Xyrem net sales over specified periods of time. 

241. The reverse payment from Jazz to Lupin is objectively valued in the tens of 

millions of dollars and constitutes a large and unexplained payment exceeding any reasonable 

estimate of saved litigation costs. 

242. In October 2018, Jazz and generic maker Amneal entered into an anticompetitive 

reverse payment agreement (the “Jazz-Amneal agreement”). 

243. Under the agreement and as it had done with Par and Lupin, Jazz granted Amneal 

a right to sell a limited volume of an authorized generic version of Xyrem (the “Amneal AG”) 

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for a term beginning July 1, 2023, or earlier under certain circumstances, and ending on 

December 31, 2025. The volume of AG that Amneal was permitted to sell was limited to “a low 

single digit percentage” of Xyrem sales volume. In effect, Jazz simply agreed to pay to Amneal a 

share of the supracompetitive profits Jazz was gaining through the anticompetitive conditions it 

had created. 

244. In exchange for this share of Jazz’s brand Xyrem revenue (via volume-limited AG 

supply), Amneal agreed to abandon its challenge to Jazz’s patents and delay launch of its own, 

true generic until December 31, 2025. 

245. At the time of entering into the Jazz-Amneal agreement, Amenal was aware of the 

arrangements between Jazz, Hikma, Lupin, and Amneal. Although unlawful, Amneal’s 

acceptance of the terms of the Jazz-Amneal agreement only made sense if Amneal knew that the 

Jazz-Hikma-Par-Lupin agreements operated, as a practical matter, as limitations on the other AG 

sales. 

246. By entering into the Jazz-Amneal agreement, Amneal was also agreeing to, and 

becoming a part of, the overall arrangements to allocate the market for sodium oxybate oral 

solution. Along with the explicit market allocation arrangements, the Jazz-Amneal agreement 

also provided a so-called “acceleration clause,” which facilitated the horizontal market share by 

assuring that no participant to the market share would be able to jump the line to early generic 

entry. 

247. Because Amneal was agreeing to delay its market entry, the Jazz-Amneal 

agreement also contained a provision under which the agreed entry date would be accelerated in 

the event of a substantial reduction in Xyrem net sales over specified periods of time. 

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248. The reverse payment from Jazz to Amenal is objectively valued in the tens of 

millions of dollars and constitutes a large and unexplained payment exceeding any reasonable 

estimate of saved litigation costs. 

249. Although the precise percentage of the brand Xyrem market allocated to Jazz’s 

would-be generic competitors under each of the agreements with Par, Lupin, and Amneal are not 

publicly known, the value of these allocations can be estimated by observing that every 1 percent 

of brand sales allocated represents a value of approximately $13.5 million per year, assuming 

$1.5 billion annual brand sales in the year preceding their entry and a discount of 10% off of 

brand pricing ($1.5B x 0.01 x 0.90 = $13.5 million). 

250. As with the Jazz-Hikma agreement, Jazz’s agreements with Par, Lupin, and 

Amneal will not increase overall output, nor significantly reduce price, nor increase consumer 

choice; it will merely substitute Par, Lupin, and Amneal as the sellers of millions of dollars’ 

worth of branded Xyrem for the sole purpose of paying them to delay market entry of lessexpensive generic Xyrem, preserving Jazz’s massive monopoly profits in exchange for doling 

out a small slice of them to Par, Lupin, and Amneal. Individually and collectively, these 

agreements are classic market allocation. Had any one of the generic defendants with output 

capacity defected from the conspiracy and refused to restrict output, Xyrem and its generic 

equivalents would be available to the plaintiff and the class at lower prices, sooner. 

251. Jazz has admitted that its series of reverse payment settlements with Hikma, 

Amneal, Lupin, and Par were designed to effectively allocate the Xyrem market. 

252. In December 2019, the Jazz CEO noted that the settlements were structured in a 

way to specifically prevent full genericization and, therefore, any real pricing competition: 

So again, in the period starting in '23, and I would say, really '23 

through '26, we're expecting authorized generic competition other 

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than Hikma, the first to file, the other couple folks with authorized 

generics have very limited volumes. So in terms of dynamics on 

price, it’s – this is not what you would think of as a generic free for 

all. So I'd point that out from '23 to '26. In terms of what payers 

will do [with respect to Jazz’s product hop], I think, if payers see a 

therapeutic equivalent, equal safety and efficacy, I have a pretty 

good idea, they're going to pick the cheapest product. But the 

question is, particularly, if there isn't a huge price differential, 

whether they will force patients onto a less healthy product. And I 

think that's a little different from the dynamics you usually see, 

including some of the ones you've referenced. 

253. Similarly, during a healthcare conference call on November 14, 2018, a senior 

official described the agreements and their ends as follows: 

And now I want to sort of lay out for you where we are with the

generic landscape for Xyrem. Now our first filer, Hikma, settled 

with the agreement for them to launch an authorized generic on the 

1st of January 2023. And what was said about that authorized 

generic, that authorized generic would provide Jazz with 

meaningful royalties and would provide Hikma with meaningful 

economics during that first year. And that authorized generic can 

last for up to 5 years. Post that first year, the royalties become even 

more meaningful for Jazz. 

Then 6 months later, after that 6-month exclusivity period for the 

first filer, 3 of the second filers get to come again with a limited 

generic. And they are limited to low single-digit volume of the

previous year Xyrem sales. So again, relatively low incursion on 

Xyrem here. And they get to have that for up until the end of 2025 

when all 8 of the second filers have the opportunity to bring a

generic product forth. 

254. With the vast majority of Jazz’s revenue on the line, it becomes clear why Jazz 

decided to maximize the delay of true generic competition and its accompanying revenue cliff by 

entering into its series of reverse payment agreements. All of these settlements shared a common, 

unlawful element; a payment from Jazz in the form of a limited volume of product made under 

the brand’s NDA to be sold by the would-be generic competitor at supracompetitive prices as a 

quid pro quo for the generics’ agreement to delay launch of their own, true ANDA generic 

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version of Xyrem. In every one of these settlements, the amount of the payment was large, 

unexplained, and far in excess of any reasonable estimate of the parties’ saved litigation costs. 

255. By structuring the deals in this manner, Jazz was able to achieve several 

anticompetitive ends. First, the generic was assured a fixed amount of sales at only a very modest 

discount off of the brand’s price; the generic manufacturer will easily sell its full allotment at 

supracompetitive prices, as there is no incentive for price competition of the sort occurring under 

true generic competition, effectively conveying a sizeable payment to each settling generic. 

Second, this deal structure implicitly (if not explicitly) assured the generics that, prior to an 

actual generic launch, an AG would not be launched in competition; each would-be generic can 

sell its full (limited volume) allotment of AG with or without competition from an AG sold by 

Jazz, so Jazz would only be taking sales away from its own brand sales (unlike when an AG is 

launched in response to a true generic competitor). And third, by permitting the settling generics’ 

limited allotments of NDA product to be sold under the brand’s REMS program, Jazz effectively 

prevented the launch of any separate REMS program for use by ANDA generics, thereby 

increasing the burden and expense for subsequent generics to bring their competing products to 

market. 

L. Jazz plans for a “product hop” from Xyrem to a successor brand as the final step to 

in its anticompetitive scheme. 

256. Because the vast majority of Jazz’s overall revenues come from Xyrem sales, in 

addition to its scheme to delay Xyrem’s loss of exclusivity, Jazz has for years been keenly 

focused on developing or acquiring new products to extend its revenue streams beyond it. Chief 

among them is Jazz’s plan to develop a line extension for Xyrem: A product with a renewed term 

of patent protection, approved pursuant to a separate NDA (so generics would have to go back to 

the drawing board), but using the same active ingredient and indicated to treat the same 

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conditions. The benefit of this strategy is that, instead of developing or acquiring a product that 

treats a new condition or patient population, the brand manufacturer simply cannibalizes its own 

existing patient population from the legacy product (that is nearing the end of patent protection) 

to the successor product and then enjoys a new 20-year patent term. 

257. This strategy is known in the industry as a “product hop,” and it comes in two 

forms. First, a “soft switch,” by which a brand manufacturer simply stops promoting the legacy 

version of the product and instead uses its vast promotional spending to shift patients and 

prescribers to the new version; or second, a “hard switch,” which includes the additional step of 

discontinuing sales of the legacy product and, in extreme cases, seeking a determination from 

FDA that such discontinuance was for safety reasons. With any product hop, generics face an 

uphill battle to gain sales given their lack of promotional budget, but a hard switch that occurs 

prior to generic entry is a nail in their coffin. Given the pharmacy counter substitution 

mechanism by which generic sales are made, there are simply none to be had once prescriptions 

for the legacy brand are no longer being written. And if FDA makes a determination that sale of 

a brand product has been discontinued for safety reasons, no generics may be approved or sold. 

258. In early 2017, Jazz was progressing on its hop strategy. It had multiple line 

extension prospects in development and one, a low-sodium reformulation of Xyrem code-named 

JZP-258, had shown promising early results and was preparing to enter phase III clinical trials. 

But there was one huge problem: Xyrem’s first generic applicant, Hikma, had just overcome the 

last of Jazz’s hurdles and, on January 17, 2017, obtained final approval of its ANDA and 

separate REMS program. Jazz knew that Hikma could launch its generic “at risk” at any time. 

And even if Hikma opted not to launch at risk of its patents, there was a May 2017 patent trial, 

which brought with it the very real likelihood that Jazz’s Xyrem patent portfolio would be 

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tanked, opening the floodgates not just for Hikma, but for all generic Xyrem competition, years 

before Jazz’s successor product would be ready for market. Jazz knew it had to act fast to 

prevent that; its very life as a company depended on it. 

259. So, as detailed above, in April 2017, on the eve of trial, Jazz and Hikma finalized 

a settlement that included a payoff to induce Hikma to shelf its approved generic version of 

Xyrem. Jazz stock jumped as investors realized the unexpected windfall. Not long thereafter, 

Jazz’s executives ramped up public discussion about their promising hop strategy. 

260. On an August 8, 2017 earnings call, Jazz’s CEO reported that the NDA for 

Xyrem’s low-sodium successor product would be ready for filing as early as 2019. When asked 

whether the settlement with Hikma had any “guarantees in place on how much share they can 

have out of that low-sodium version as well” (apparently meaning in addition to the agreed 

market allocation on legacy Xyrem), Mr. Cozadd replied that, other than a “fairly typical” 

market decline provision, “[u]nder that settlement, Hikma does not have any particular 

participation in or -- well, our low-sodium programs, of which there are several, remain 

completely ours.” 

261. When asked later on the same earnings call whether Jazz planned to “effectuate a 

hard switch and stop supplying Xyrem to the market,” following launch of its low-sodium 

product, Jazz’s CEO did not rule out the strategy, but advised it was “too early to start 

commenting on commercial strategy.” 

262. On a May 8, 2018 earning call, Mr. Cozadd was asked, “how you think JZP-258 

will be received in the market when Xyrem generics are available,” particularly among those 

patients “without ongoing sodium-sensitive comorbidities.” Mr. Cozadd reminded that, “under 

our current time lines, our hope is the 258 would be available before generics were available,” 

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and implied he did not foresee patients migrating back to the legacy generic once the hop to the 

low sodium product had been effectuated. 

263. As of the filing of this complaint, it appears Jazz is on track to effectuate its 

planned product hop. Jazz’s NDA seeking approval of JZP-258 was submitted to FDA on 

January 21, 2020. On March 25, 2020, Jazz announced the FDA had accepted its NDA for 

priority review with a “goal date” for FDA decision in July 21, 2020. Even if the FDA requires 

multiple review rounds prior to final approval, this still gives Jazz plenty of runway to effectuate 

its all-important hop strategy (whether “soft” or “hard”) prior to generic Xyrem entry, exactly 

according to its anticompetitive plan. 

M. Since its launch in 2002, Xyrem has been dispensed through a single specialty 

pharmacy operated by Express Scripts, to which title passes only momentarily. 

264. Since its launch in October 2002, Xyrem has been dispensed directly to 

consumers through a single central pharmacy arrangement. The pharmacy appears to have at all 

times been Express Scripts Specialty Distribution Services, Inc. (“ESSDS”)—a subsidiary of 

Express Scripts. 

265. Under Jazz’s and ESSDS’s master services agreement, “all commercial, nonclinical trial [Xyrem] Product sold by Jazz Pharmaceuticals or made available through the PAP 

[Patient Assistance Program]” are dispensed through ESSDS, as further delineated in written 

work orders from Jazz. The service agreements require ESSDS to provide “pharmacy and REMS 

services” as the sole central pharmacy to administer the Xyrem REMS program. The Xyrem 

REMS program requires the dispenser to agree to “Ship XYREM directly to each patient or a 

patient-authorized adult designee, and track and verify receipt of each shipment of XYREM.” 

266. All commercial Xyrem sales are dispensed through ESSDS via its “Central 

Certified Pharmacy” i.e., the facility “licensed” in “compliance with the XYREM REMS 

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Program and utilized by ESSDS in connection with the performance” of the MSA. All non-PAP 

Xyrem orders must be furnished to the ESSDS Central Certified Pharmacy, where they are held 

for dispensation on a “consignment” basis. 

267. The MSA provides that for some sales, title for the Xyrem product passes from 

Jazz to ESSDS only momentarily upon the point of “removal” from the ESSDS Central Certified 

Pharmacy. The transfer of title, however, applies only to products purchased as part of a “buy in” 

option (which has been redacted from the publicly filed settlement agreement), where “title 

transfers upon submission of a relevant purchase order.” So, for just those defined applicable 

purchases, which are yet unknown, title is passed from Jazz to ESSDS only when in transit to the 

real purchaser—the consumer. 

268. For these untold shipments, while ESSDS ostensibly has the “right to establish the 

price at which it resells” Xyrem, the MSA specifically provides that the price set by ESSDS 

“shall not exceed” the “greater of . . . [redacted in publicly filed settlement agreement] percent of 

[redacted in publicly filed settlement agreement] for” Xyrem. Under the MSA, the price at which 

ESSDS can sell Xyrem is adjusted by percentage of a particular benchmark price over a period 

of years. The particular percentages against the benchmark price, however, are redacted from the 

MSA. 

269. In summary, (i) all Xyrem product sold by Jazz (and which will be sold as an 

authorized generic) are made by Jazz and pass through a single central pharmacy for direct 

delivery to patients, (ii) this arrangement has existed at all times, (iii) the same central pharmacy, 

ESSDS, has performed this service at all times, (iv) title remains with Jazz during the time that 

the central pharmacy holds the product, (v) the central pharmacy is paid by Jazz to perform the 

dispensing services (and Jazz will be reimbursed by the generic companies to the extent Jazz 

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makes such payments for the authorized generic sales), and (vi) the arrangements between Jazz 

and the central pharmacy limit the price at which Xyrem may be charged. 

VI. MARKET POWER AND DEFINITION 

270. The pharmaceutical marketplace is characterized by a “disconnect” between 

product selection and the payment obligation. State laws prohibit pharmacists from dispensing 

many pharmaceutical products, including Xyrem, to patients without a prescription. The 

prohibition on dispensing certain products without a prescription creates this disconnect. The 

patient’s doctor chooses which product the patient will buy while the patient (and in most cases, 

his or her insurer) has the obligation to pay for the product. 

271. Brand manufacturers, including Jazz, exploit this price disconnect by employing 

large sales forces that visit doctors’ offices and persuade them to prescribe the brand 

manufacturers’ products. These sales representatives do not advise doctors of the cost of the 

branded products. Studies show that doctors typically are not aware of the relative costs of brand 

pharmaceuticals and, even when they are aware of the relative costs, they are largely insensitive 

to price differences because they do not pay for the products. The result is a marketplace in 

which price plays a comparatively unimportant role in product selection. 

272. The relative unimportance of price to the prescriber reduces what economists call 

the price elasticity of demand—the extent to which unit sales go down when price goes up. This 

reduced-price elasticity, in turn, gives brand manufacturers the ability to raise price substantially 

above marginal cost without losing so many sales as to make the price increase unprofitable. The 

ability to profitably raise prices substantially above marginal costs is what economists and 

antitrust courts refer to as market power. The result of these pharmaceutical market 

imperfections and marketing practices is that brand manufacturers gain and maintain market 

power with respect to many branded prescription pharmaceuticals, including Xyrem. 

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273. Through at least January 1, 2023, Jazz has had, and will continue have, monopoly 

power in the market for Xyrem. Jazz has had, and will continue to have, the power to exclude 

competition and/or raise or maintain the price of sodium oxybate at supracompetitive levels 

without losing enough sales to make supracompetitive prices unprofitable. When Hikma does 

come to market with an AG of Xyrem, Hikma and Jazz will have substantial market power in the 

market for Xyrem and its AB-rated generic equivalents because they will have the power to 

exclude competition and/or raise or maintain the price of sodium oxybate at supracompetitive 

levels without losing enough sales to make supracompetitive prices unprofitable. 

274. Before January 1, 2023, a small but significant, non-transitory increase to the 

price of brand Xyrem would not have caused a significant loss of sales. From January 1, 2023 

forward until at least December 31, 2025, a small but significant, non-transitory increase in the 

price of generic Xyrem would not have caused a significant loss of sales. 

275. Brand Xyrem does not exhibit significant, positive cross-elasticity of demand 

with respect to price with any other sodium oxybate product or treatment for narcolepsy other 

than AB-rated generic versions of Xyrem. 

276. Brand Xyrem is differentiated from all other sodium oxybate products, and all 

other narcolepsy treatments, other than the AB-rated generic versions of Xyrem. 

277. Jazz needs to control only brand Xyrem and its AB-rated generic equivalents, and 

no other products, in order to maintain the price of sodium oxybate profitably at 

supracompetitive prices. Only the market entry of competing, AB-rated generic versions would 

render defendants unable to profitably maintain their prices for Xyrem without losing substantial 

sales. 

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278. During the 180-day exclusion period starting in January 1, 2023, Jazz, with 

Hikma’s conspiratorial aid, will sell brand Xyrem at prices well in excess of marginal costs and 

in excess of the competitive price, and, therefore, Jazz will enjoy high profit margins. 

279. The defendants have, and have exercised, the power to exclude generic 

competition to brand Xyrem. 

280. At all material times, high barriers to entry, including regulatory protections and 

high costs of entry and expansion, protected and continue to protect branded Xyrem from the 

forces of price competition. 

281. There is direct evidence of market power and anticompetitive effects available in 

this case sufficient to show the defendants’ ability to control the price of Xyrem, and to exclude 

relevant competitors, without the need to show the relevant antitrust markets. The direct 

evidence consists of, inter alia, the following facts: (i) generic Xyrem would have entered the 

market at a much earlier date, at a substantial discount to brand Xyrem, but for the defendants’ 

anticompetitive conduct; and (ii) Jazz’s gross margin on Xyrem (including the costs of ongoing 

research/development and marketing) at all relevant times was very high. 

282. To the extent proof of monopoly power by defining a relevant product market is 

required, the plaintiff alleges that the relevant antitrust market is the market for Xyrem and its 

AB- rated generic equivalents. 

283. The United States, the District of Columbia, and the U.S. territories constitute the 

relevant geographic market. 

284. Jazz’s market share in the relevant market continues to be 100% until January 1, 

2023, when Hikma enters the market at throttled capacity per its anticompetitive, reverse 

payment settlement agreement with Jazz. 

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VII. MARKET EFFECTS 

285. The defendants willfully and unlawfully maintained their market power by 

engaging in an overarching scheme to exclude competition. The defendants designed a scheme to 

delay competition on the products’ merits to further Jazz’s anticompetitive purpose of 

forestalling generic competition against Xyrem, in which Hikma cooperated in order to increase 

its own profits. The defendants carried out the scheme with the anticompetitive intent and effect 

of maintaining supracompetitive prices for sodium oxybate tablets. 

286. The defendants’ acts and practices had the purpose and effect of restraining 

competition unreasonably and injuring competition by protecting brand Xyrem from 

competition. These actions allowed Jazz to maintain a monopoly and exclude competition in the 

market for Xyrem and its AB-rated generic equivalents to the detriment of the plaintiff and all 

other members of the class, as defined below. 

287. The defendants’ exclusionary conduct delayed and continues to delay generic 

competition and unlawfully enabled Jazz to sell Xyrem without further generic competition. 

Were it not for defendants’ illegal conduct, one or more additional generic versions of Xyrem 

would have entered the market sooner, and Hikma’s generic product would face competition 

during its 180-day exclusivity period from a Jazz authorized generic product. 

288. The defendants’ illegal acts and conspiracy to delay generic competition for 

Xyrem caused the plaintiff and all members of the class to pay more than they would have paid 

for sodium oxybate absent this illegal conduct. 

289. If generic competitors had not been unlawfully prevented from entering the 

market earlier and competing in the relevant market, the plaintiff and members of the class 

would have paid less for sodium oxybate by: (i) paying lower prices on their remaining brand 

purchases of Xyrem, (ii) substituting purchases of less expensive generic Xyrem for their 

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purchases of more expensive brand Xyrem when market entry occurs (or should have occurred), 

and/or (iii) purchasing generic Xyrem at lower prices sooner. 

290. Thus, the defendants’ unlawful conduct deprived the plaintiff and members of the 

class of the benefits from the competition that the antitrust laws are designed to ensure. 

VIII. ANTITRUST IMPACT AND IMPACT ON INTERSTATE COMMERCE 

291. During the relevant time period, the defendants willfully and unlawfully 

maintained their market power by engaging in an overarching scheme to exclude competition. 

The defendants designed a scheme to delay competition on the products’ merits, to further Jazz’s 

anticompetitive purpose of forestalling generic competition against Xyrem, in which Hikma 

cooperated in order to increase its own profits. The defendants carried out the scheme, and 

continue to do so, with the anticompetitive intent and effect of maintaining supracompetitive 

prices for sodium oxybate. 

292. The defendants’ acts and practices had the purpose and effect of restraining 

competition unreasonably and injuring competition by protecting brand Xyrem, and later the 

generic defendants’ sodium oxybate products, from competition. These actions allowed the 

defendants to maintain a monopoly and to exclude competition in the market for Xyrem and its 

AB-rated generic equivalents, to the detriment of the plaintiff and all other members of the class. 

293. Were it not for the defendants’ illegal conduct, generic Xyrem would have been 

available in the United States as early as January 2018, and certainly earlier than January 2023. 

In addition, were it not for the defendants’ illegal conduct, when generic Xyrem did become 

available earlier, there would have been full and fair competition between the available generics, 

thereby reducing price to a competitive level. 

294. The plaintiff BCBSA has incurred significant injury and damage as a result of the 

unlawful conduct of the defendants. During the period from January 2018 to the present, BCBSA 

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has paid and/or reimbursed for Xyrem at supracompetitive levels and has done so in at least the 

following states: Alaska, Arizona, California, Connecticut, District of Columbia, Florida, 

Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, 

Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North 

Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, West 

Virginia, and Wisconsin. If the conduct challenged in this complaint had not occurred, BCBSA 

would have paid for Xyrem under lawful competitive conditions, resulting in a substantial 

reduction in the amount it would have paid for Xyrem. 

295. The plaintiff and members of the classes have sustained substantial losses and 

damage to their business and property in the form of overcharges. The full amount and forms and 

components of such damages will be calculated after discovery and upon proof at trial. 

Commonly used and well-accepted economic models can be used to measure both the extent and 

the amount of the supracompetitive charge passed through the chain of distribution to payors 

such as the plaintiff and members of the classes. 

296. If generic competitors had not been unlawfully prevented from entering the 

market earlier and competing in the relevant markets, the plaintiff and members of the classes 

would have paid less for sodium oxybate by (a) paying lower prices on their remaining brand 

purchases of Xyrem, (b) substituting purchases of less-expensive generic Xyrem for their 

purchases of more-expensive brand Xyrem, and/or (c) purchasing generic Xyrem at lower prices 

sooner. 

297. The supracompetitive prices the plaintiff and members of the classes paid and 

continue to pay are traceable to, and the direct, proximate, and foreseeable result of the 

defendants’ anticompetitive conduct. 

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IX. INTERSTATE AND INTRASTATE COMMERCE 

298. During the relevant time period, Jazz manufactured, sold, and shipped Xyrem 

across state lines in an uninterrupted flow of interstate commerce. 

299. During the relevant time period, the plaintiff and members of the classes 

purchased substantial amounts of Xyrem from Jazz and/or its agents. As a result of the 

defendants’ illegal conduct, the plaintiff and the members of the classes were compelled to pay, 

and did pay, artificially inflated prices for Xyrem, and should have already been paying far less 

for a generic version of the drug were it available and but for the defendants’ conduct. 

300. During the relevant time period, the defendants used various devices to effectuate 

the illegal acts alleged herein, including the United States mail, interstate and foreign travel, and 

interstate and foreign wire commerce. All the defendants engaged in illegal activities, as charged 

in herein, within the flow of, and substantially affecting, interstate commerce. 

301. The defendants’ conduct was within the flow of and was intended to have and did 

have a substantial effect on, interstate commerce of the United States, including in this district. 

302. During the class period, each defendant, or one or more of each defendant’s 

affiliates, used the instrumentalities of interstate commerce to join or effectuate the scheme. The 

scheme in which the defendants participated had a direct, substantial, and reasonably foreseeable 

effect on interstate commerce. 

303. The defendants’ conduct also had substantial intrastate effects in that, among 

other things, distributors of Xyrem have been prevented from offering more affordable generic 

versions to purchases in each state. Defendants’ conduct materially deprived the consuming 

public—including hundreds, if not thousands, of purchasers in each state—of any choice to 

purchase more affordable versions of Xyrem. The absence of competition to Xyrem has, and 

continues to, directly and substantially affect and disrupt commerce within each state. 

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X. CLASS ACTION ALLEGATIONS 

304. For counts 1 through 6, 13, and 14, the plaintiff brings this action on behalf of 

itself and all others similarly situated as a class action under Rules 23(a), 23(b)(2) and 23(b)(3) 

of the Federal Rules of Civil Procedure. The following is the proposed Federal Law Class: 

All individual persons or entities in the United States and its

territories that purchased, paid for and/or provided reimbursement 

for some or all of the purchase price of Xyrem from Jazz or 

ESSDS, or any agents, predecessors, or successors of Jazz or 

ESSDS, during the time period from January 1, 2018 until the 

anticompetitive effects of the defendants’ unlawful conduct cease 

(the “Class Period”). 

305. Excluded from the class are Jazz, Hikma, Amneal, Par, Lupin, Express Scripts 

and ESSDS, and any of their officers, directors, management, employees, parents, subsidiaries, 

and affiliates. 

306. Also excluded from the class are fully-insured health plans (i.e., health plans that 

purchased insurance from another third-party payor covering 100 percent of the plan’s 

reimbursement obligations to its members), any “flat co-pay” consumers who purchased Xyrem 

via fixed-dollar co-payment that does not vary based on the drug’s status as a brand or generic, 

and pharmacy benefit managers. 

307. Also excluded from the class are the government of the United States and all 

agencies thereof. 

308. The class seeks damages for at least the four years preceding the date the 

complaint is filed, and permanent injunctive relief to prevent or remedy the unlawful conduct 

alleged herein. 

309. For counts 7 through 12 and 13, the plaintiff bring this action on behalf of itself 

and all others similarly situated as a class action under Rules 23(a), 23(b)(2) and 23(b)(3) of the 

Federal Rules of Civil Procedure. The following is the proposed State Law Class: 

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All individual persons or entities in the United States and its

territories that, other than for resale, purchased, paid for and/or 

provided reimbursement for some or all of the purchase price for 

Xyrem during the time period from January 1, 2018 through and 

until the anticompetitive effects of the defendants’ unlawful 

conduct cease for consumption by themselves, their families, or

their members, employees, insureds, participants, or beneficiaries. 

310. Excluded from this alternative class are Jazz, Hikma, Amneal, Par, Lupin, 

Express Scripts and ESSDS, or any other persons or entities that purchased Xyrem for purposes 

of resale from Jazz, and any of their officers, directors, management, employees, parents, 

subsidiaries, and affiliates. 

311. Also excluded from the class are fully-insured health plans (i.e., health plans that 

purchased insurance from another third-party payor covering 100 percent of the plan’s 

reimbursement obligations to its members), any “flat co-pay” consumers who purchased Xyrem 

via fixed-dollar co-payment that does not vary based on the drug’s status as a brand or generic, 

and pharmacy benefit managers. 

312. Also excluded from the class are the government of the United States and all 

agencies thereof, and all state or local governments and all agencies thereof. 

313. Members of the classes are so numerous and geographically dispersed that joinder 

of all members is impracticable. The plaintiff believes that members of each class are numerous 

and widely dispersed throughout the United States. Moreover, given the costs of complex 

antitrust litigation, it would be uneconomic for many plaintiffs to bring individual claims and 

join them together. The classes are readily identifiable from information and records in the 

possession of defendants and third parties. 

314. The plaintiff’s claims are typical of the claims of the members of the classes. The 

plaintiff’s claims arise out of the same course of anticompetitive conduct that gives rise to the 

claims of the other class members. The plaintiff and all members of the classes were damaged by 

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the same wrongful conduct of the defendants—they paid supracompetitive prices for Xyrem and 

were deprived of the benefits of earlier and more robust competition from less expensive generic 

Xyrem as a result of the defendants’ unlawful conduct alleged herein. 

315. The plaintiff will fairly and adequately protect and represent the interests of the 

classes. The interests of the plaintiff are aligned with, and not antagonistic to, those of the other 

members of the classes. 

316. The plaintiff is represented by counsel who are experienced and competent in the 

prosecution of class action antitrust litigation and have particular experience with class action 

antitrust litigation involving pharmaceutical products. 

317. Questions of law and fact common to the members of the classes predominate 

over questions that may affect only individual class members, because defendants have acted on 

grounds generally applicable to the entirety of each class, thereby making overcharge damages 

with respect to each class as a whole appropriate. Such generally applicable conduct is inherent 

in defendants’ wrongful conduct. Questions of law and fact common to the classes include, but 

are not limited to: 

a) Whether the defendants unlawfully maintained and continue to maintain 

monopoly power through all or part of their overall anticompetitive generic 

suppression scheme; 

b) To the extent procompetitive justifications exist, whether there were less 

restrictive means of achieving them; 

c) Whether direct proof of defendants’ monopoly power is available and, if so, 

whether it is sufficient to prove defendants’ monopoly power without the need 

to define the relevant market; 

d) Whether the defendants’ scheme, in whole or in part, has substantially 

affected intrastate and/or interstate commerce; 

e) Whether the defendants’ unlawful agreements, in whole or in part, caused 

antitrust injury through overcharges to the business or property of the plaintiff 

and the members of the classes; 

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f) Whether defendants conspired to delay generic competition for Xyrem; 

g) Whether, pursuant to the reverse payment agreements, Jazz’s promise not to 

compete against Hikma’s generic product constituted a large and unexplained 

payment; 

h) Whether the defendants’ unlawful monopolistic conduct was a substantial 

contributing factor in causing some amount of delay of the entry of AB-rated 

generic Xyrem; 

i) Determination of a reasonable estimate of the amount of delay the defendants’ 

unlawful monopolistic conduct caused; and 

j) The quantum of overcharges paid by the classes in the aggregate. 

318. Class action treatment is a superior method for the fair and efficient adjudication 

of the controversy. Such treatment will permit a large number of similarly-situated persons to 

prosecute their common claims in a single forum simultaneously, efficiently, and without the 

unnecessary duplication of evidence, effort, or expense that numerous individual actions would 

engender. The benefits of proceeding through the class mechanism, including providing injured 

persons or entities a method for obtaining redress on claims that could not practicably be pursued 

individually, substantially outweighs potential difficulties in management of this class action. 

319. The plaintiff knows of no special difficulty to be encountered in litigating this 

action that would preclude its maintenance as a class action. 

XI. CLAIMS FOR RELIEF 

COUNT 1– VIOLATION OF 15 U.S.C. § 2 

(AGAINST JAZZ) 

320. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

321. As described above, before January 2023, Jazz will maintain its monopoly power 

in the relevant market and, after that point, will share its, monopoly power with Hikma first, 

followed by Amneal, Lupin, and Par in an illegal monopoly. 

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322. Jazz willfully and unlawfully engaged in continuing illegal conduct to monopolize 

the relevant market through at least December 31, 2025 by engaging in an anticompetitive 

scheme to keep AB-rated generic equivalents of Xyrem from the market—not as a result of 

providing a superior product, business acumen, or historical accident. 

323. The plaintiff has been injured in its business or property by the violation of 15 

U.S.C. § 2. Such injury consists of having paid higher prices for its sodium oxybate requirements 

than it would have paid in the absence of those violations. Such injury is of the type antitrust 

laws were designed to prevent, and it flows from that which makes the defendants’ conduct. 

COUNT 2 – VIOLATION OF 15 U.S.C. § 1 

(AGAINST JAZZ AND HIKMA) 

324. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

325. Jazz and Hikma violated 15 U.S.C. § 1 by entering into an unlawful reverse 

payment agreement that restrained competition in the market for Xyrem and its generic 

equivalents. 

326. The plaintiff has been injured in its business or property by the violation of 15 

U.S.C. § 1. The plaintiff’s injury consists of having paid higher prices for its sodium oxybate 

requirements than it would have paid in the absence of those violations. Such injury, called 

“overcharges,” is of the type that the antitrust laws were designed to prevent, and it flows from 

that which makes Jazz and Hikma’s conduct unlawful. 

327. But for Hikma’s reverse payment agreement delaying generic entry and its 

agreement to restrict output in the market for Xyrem and its generic equivalents, prices for the 

plaintiff and the class would be lower, sooner. 

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328. There is and was no legitimate, non-pretextual, pro-competitive business 

justification for this reverse payment agreement that outweighs its harmful effect on direct 

purchasers and competition. Even if there were some conceivable and cognizable justification, 

the payment was not necessary to achieve such a purpose. 

329. As a direct and proximate result of Jazz and Hikma’s anticompetitive conduct, the 

plaintiff was harmed and continues to be harmed in the form of overcharges. 

COUNT 3 – VIOLATION OF 15 U.S.C. § 1 

(AGAINST JAZZ AND AMNEAL) 

330. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

331. Jazz and Amneal violated 15 U.S.C. § 1 by entering into an unlawful reverse 

payment agreement that restrained competition in the market for Xyrem and its generic 

equivalents. 

332. The plaintiff has been injured in its business or property by the violation of 15 

U.S.C. § 1. The plaintiff’s injury consists of having paid higher prices for its sodium oxybate 

requirements than it would have paid in the absence of those violations. Such injury, called 

“overcharges,” is of the type that the antitrust laws were designed to prevent, and it flows from 

that which makes Jazz and Amneal’a conduct unlawful. 

333. But for Amneal’s reverse payment agreement delaying generic entry and its 

agreement to restrict output in the market for Xyrem and its generic equivalents, prices for the 

plaintiff and the class would be lower, sooner. 

334. There is and was no legitimate, non-pretextual, pro-competitive business 

justification for this reverse payment agreement that outweighs its harmful effect on direct 

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purchasers and competition. Even if there were some conceivable and cognizable justification, 

the payment was not necessary to achieve such a purpose. 

335. As a direct and proximate result of Jazz and Amneal’s anticompetitive conduct, 

the plaintiff was harmed and continues to be harmed in the form of overcharges. 

COUNT 4 – VIOLATION OF 15 U.S.C. § 1 

(AGAINST JAZZ AND LUPIN) 

336. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

337. Jazz and Lupin violated 15 U.S.C. § 1 by entering into an unlawful reverse 

payment agreement that restrained competition in the market for Xyrem and its generic 

equivalents. 

338. The plaintiff has been injured in its business or property by the violation of 15 

U.S.C. § 1. The plaintiff’s injury consists of having paid higher prices for its sodium oxybate 

requirements than it would have paid in the absence of those violations. Such injury, called 

“overcharges,” is of the type that the antitrust laws were designed to prevent, and it flows from 

that which makes Jazz and Lupin’s conduct unlawful. 

339. But for Lupin’s reverse payment agreement delaying generic entry and its 

agreement to restrict output in the market for Xyrem and its generic equivalents, prices for the 

plaintiff and the class would be lower, sooner. 

340. There is and was no legitimate, non-pretextual, pro-competitive business 

justification for this reverse payment agreement that outweighs its harmful effect on direct 

purchasers and competition. Even if there were some conceivable and cognizable justification, 

the payment was not necessary to achieve such a purpose. 

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341. As a direct and proximate result of Jazz and Lupin’s anticompetitive conduct, the 

plaintiff was harmed and continues to be harmed in the form of overcharges. 

COUNT 5 – VIOLATION OF 15 U.S.C. § 1 

(AGAINST JAZZ AND PAR) 

342. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

343. Jazz and Par violated 15 U.S.C. § 1 by entering into an unlawful reverse payment 

agreement that restrained competition in the market for Xyrem and its generic equivalents. 

344. The plaintiff has been injured in its business or property by the violation of 15 

U.S.C. § 1. The plaintiff’s injury consists of having paid higher prices for its sodium oxybate 

requirements than it would have paid in the absence of those violations. Such injury, called 

“overcharges,” is of the type that the antitrust laws were designed to prevent, and it flows from 

that which makes Jazz and Par’s conduct unlawful. 

345. But for Par’s reverse payment agreement delaying generic entry and its agreement 

to restrict output in the market for Xyrem and its generic equivalents, prices for plaintiff and the 

class would be lower, sooner. 

346. There is and was no legitimate, non-pretextual, pro-competitive business 

justification for this reverse payment agreement that outweighs its harmful effect on direct 

purchasers and competition. Even if there were some conceivable and cognizable justification, 

the payment was not necessary to achieve such a purpose. 

347. As a direct and proximate result of Jazz and Par’s anticompetitive conduct, the 

plaintiff was harmed and continues to be harmed in the form of overcharges. 

COUNT 6 – VIOLATION OF 15 U.S.C. § 1 

(AGAINST ALL DEFENDANTS) 

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348. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

349. The defendants violated 15 U.S.C. § 1 by entering into an unlawful reverse 

payment agreement that restrained competition in the market for Xyrem and its generic 

equivalents. 

350. The plaintiff has been injured in its business or property by the violation of 15 

U.S.C. § 1. The plaintiff’s injury consists of having paid higher prices for its sodium oxybate 

requirements than it would have paid in the absence of those violations. Such injury, called 

“overcharges,” is of the type that the antitrust laws were designed to prevent, and it flows from 

that which makes the defendants’ conduct unlawful. 

351. From the launch of brand Xyrem in 2002 through present, Jazz possessed, and 

continues to possess, monopoly power in the relevant market—i.e., the market for sales of 

sodium oxybate in the United States. But for the defendants’ wrongful conduct, as alleged 

herein, Jazz should have lost its monopoly power in the relevant market as early as January 1, 

2018 and in any event well before 2023. 

352. Starting in January 2023, Jazz will share its monopoly power. First with Hikma, 

and then, six months later, with Amneal, Par, and Lupin, as a result of its anticompetitive reverse 

payment and market allocation agreements with each. These agreements individually and 

collectively will cover a sufficiently substantial percentage of the relevant market to harm 

competition. 

353. There is and was no legitimate, non-pretextual, pro-competitive business 

justification for this reverse payment agreement that outweighs its harmful effect on direct 

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purchasers and competition. Even if there were some conceivable and cognizable justification, 

the payment was not necessary to achieve such a purpose. 

354. As a direct and proximate result of the defendants’ anticompetitive conduct, the 

plaintiff was harmed and continues to be harmed in the form of overcharges. 

COUNT 7 – MONOPOLIZATION AND MONOPOLISTIC 

SCHEME UNDER STATE LAW54

(AGAINST JAZZ) 

355. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

356. As described above, before January 2023, Jazz will maintain its monopoly power 

in the relevant market and, after that point, will share its monopoly power with Hikma first, 

followed by Amneal, Lupin, and Par, in an illegal monopoly. 

357. Jazz willfully and unlawfully engaged in continuing illegal conduct to monopolize 

the relevant market through at least December 31, 2025 by engaging in an anticompetitive 

scheme to keep AB-rated generic equivalents of Xyrem from the market—not as a result of 

providing a superior product, business acumen, or historical accident. 

358. Jazz knowingly and intentionally maintained and enhanced its monopoly power in 

the relevant market, as described herein, injuring the plaintiff and the class. Jazz accomplished 

this scheme by, inter alia, 

 54 The plaintiff has delivered, or is contemporaneously delivering, notice of this action and 

copies of this complaint to the attorneys general in Arizona, Alaska, Connecticut, Hawaii, 

Minnesota, Missouri, Montana, Nevada, New York, Oregon, Rhode Island, South Carolina, and 

Utah. The plaintiff has also provided a notice of the pendency of this action and demand for 

relief to defendants pursuant to the laws multiple states, including Georgia and Massachusetts 

(claims under the laws of Georgia and Massachusetts will be added in this action should the 

defendants not meet BCBSA’s demand), as well as Arizona, Maine, Montana, Nevada, New 

York, Oregon, Rhode Island, Utah, and West Virginia (which require notice concurrent with 

filing under their respective state consumer protection and/or antitrust laws). 

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98 

a) Delaying generic entry of Xyrem in order to lengthen the period in which 

Jazz’s brand Xyrem could monopolize the market and make supracompetitive profits; 

b) Keeping an authorized generic off the market during Hikma’s 180-day generic 

exclusivity period, and, subsequently when Amneal, Lupin, and Par are 

permitted to enter with only limited quantities of generic Xyrem, through at 

least December 31, 2025, thereby allowing defendants to monopolize the 

generic market for Xyrem during the period, and allowing defendants to make 

supracompetitive profits; 

c) Raising and maintaining the prices so that the plaintiff and other members of 

the class would pay supracompetitive prices for Xyrem; and 

d) Otherwise conspiring to unlawfully monopolize the relevant market, including 

through the use of anticompetitive “acceleration” clauses. 

359. The goal, purpose, and effect of Jazz’s scheme was also to maintain and extend its 

monopoly power with respect to Xyrem. Jazz’s illegal scheme allowed it to continue charging 

supracompetitive prices for Xyrem, without a substantial loss of sales, reaping substantial 

unlawful monopoly profits. Jazz’s scheme will allow Hikma to reap the benefits of reduced 

generic competition in the United States. 

360. There is and was no legitimate, non-pretextual, procompetitive justification for 

Jazz’s conduct that outweighs its harmful effects. Even if there were some conceivable 

justification, the conduct is and was broader than necessary to achieve such a purpose. 

361. As a result of Jazz’s illegal conduct, the plaintiff and members of the class were 

(and did), and continue to be (and do), compelled to pay more than they would have paid for 

Xyrem and/or its generic Xyrem absent defendants’ illegal conduct. But for Jazz’s illegal 

conduct, competitors would have begun selling generic Xyrem sooner, and prices paid for the 

drug or its generic equivalent, therefore, less. 

362. Had manufacturers of generic Xyrem entered the market and lawfully competed 

with Jazz (and one another) in a timely fashion, the plaintiff and other members of the class 

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99 

would have substituted lower-priced generic Xyrem for the higher-priced brand-name Xyrem for 

some or all of their Xyrem requirements, and/or would have paid lower net prices on their 

remaining Xyrem and generic Xyrem purchases. 

363. But for Jazz’s illegal conduct, competitors would have begun marketing generic 

versions of Xyrem well before January 2023, and they would be able to market such versions 

more successfully. 

364. By engaging in the foregoing conduct, Jazz intentionally, willfully, and 

wrongfully monopolized the relevant market in violation of the following state laws: 

a) Arizona Rev. Stat. §§ 44-1403, et seq., with respect to purchases in Arizona 

by members of the class. 

b) Cal. Bus. & Prof. Code §§ 16700, with respect to purchases in California by 

members of the class. 

c) C.G.S.A. §§ 35-27, et seq., with respect to purchases in Connecticut by class 

members. 

d) D.C. Code §§ 28-4503, et seq., with respect to purchases in the District of 

Columbia by members of the class. 

e) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class, and such conduct constitutes a predicate act under the Florida 

Deceptive Practices Act. 

f) Haw. Rev. Stat. §§ 480-2, 480-9, et seq., with respect to purchases in Hawaii 

by members of the class. 

g) 740 Ill. Comp. Stat. 10/1, et seq., with respect to purchases in Illinois by 

members of the class. 

h) Iowa Code § 553.5, et seq., with respect to purchases in Iowa by members of 

the class. 

i) Kan. Stat. Ann. § 50-101, et seq., with respect to purchases in Kansas by 

members of the class. 

j) Me. Rev. Stat. Ann. 10, §§ 1102, et seq., with respect to purchases in Maine 

by members of the class. 

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100 

k) MD Code Ann., Com. Law, §§ 11-204, et seq., with respect to purchases in 

Maryland by members of the class. 

l) Mich. Comp. Laws Ann. §§ 445.771, et seq., with respect to purchases in 

Michigan by members of the class. 

m) Minn. Stat. §§ 325D.49, et seq., and Minn. Stat. §§ 8.31, et seq., with respect 

to purchases in Minnesota by members of the class. 

n) Miss. Code Ann. §§ 75-21-3, et seq., with respect to purchases in Mississippi 

by members of the class. 

o) Mo. Rev. Stat. §§ 407.020, et seq., with respect to purchase in Missouri by 

members of the class. 

p) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by members of the class. 

q) Neb. Rev. Stat. Ann. §§ 59-802, et seq., with respect to purchases in Nebraska 

by members of the class. 

r) Nev. Rev. Stat. Ann. §§ 598A.060, et seq., with respect to purchases in 

Nevada by members of the class. 

s) N.H. Rev. Stat. Ann. §§ 356.1, et seq., with respect to purchases in New 

Hampshire by members of the class. 

t) N.M. Stat. Ann. §§ 57-1-2, et seq., with respect to purchases in New Mexico 

by members of the class. 

u) N.Y. Gen. Bus. Law § 340, et seq., with respect to purchases in New York by 

members of the class, and to the extent New York law so requires, the plaintiff 

hereby forgoes any penalty or minimum recovery in order to preserve the right 

of New York class members to recover by way of a class action. 

v) N.C. Gen. Stat. §§ 75-2.1, et seq., with respect to purchases in North Carolina 

by members of the class. 

w) N.D. Cent. Code §§ 51-08.1-01, et seq., with respect to purchases in North 

Dakota by members of the class. 

x) Or. Rev. Stat. §§ 646.705, et seq., with respect to purchases in Oregon by 

members of the class. 

y) R.I. Gen. Laws §§ 6-36-5 et seq., with respect to purchases in Rhode Island by 

members of the class. 

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z) S.D. Codified Laws §§ 37-1-3.2, et seq., with respect to purchases in South 

Dakota by members of the class. 

aa) Tenn. Code Ann §§ 47-25-101, et seq., with respect to purchases in Tennessee 

by members of the class. 

bb) Utah Code Ann. §§ 76-10-3101, et seq., with respect to purchases in Utah by 

members of the class, including citizens or residents of Utah. 

cc) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

members of the class. 

dd) W.Va. Code §§ 47-18-1, et seq., with respect to purchases in West Virginia by 

members of the class. 

ee) Wis. Stat. §§ 133.03, et seq., with respect to purchases in Wisconsin by 

members of the class. 

365. By engaging in the foregoing conduct, Jazz intentionally, willfully, and 

wrongfully monopolized the relevant market in violation of the following state consumer 

protection laws: 

a) Alaska Stat. Ann. § 45.50.471, et seq., with respect to purchases in Alaska by 

members of the class. Defendants engaged in unfair methods of competition 

and unfair practices in the conduct of trade and commerce. 

b) Cal. Bus. & Prof. Code §§ 17200, et seq., with respect to purchases in 

California by members of the class. Defendants engaged in business practices 

that are unfair in that they are immoral, unethical, oppressive, unscrupulous, 

and substantially injurious to class members. There are no countervailing 

benefits to class members and any utility of defendants’ conduct is 

outweighed by the consequences to class members. Defendants’ conduct also 

constitutes an unlawful business practice in that it violates the Sherman Act as 

set forth above. 

c) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class. 

d) Mo. Rev. Stat. §§ 407.020 et seq., with respect to purchase in Missouri by 

members of the class. 

e) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by members of the class. Defendants engaged in unfair and deceptive acts and 

practices. 

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102 

f) S.C. Code Ann. §§ 39-5-20, et seq., with respect to purchases in South 

Carolina by class members. Defendants engaged in unfair methods of 

competition and unfair practices in the conduct of trade and commerce. 

Defendants’ conduct is offensive to public policy and immoral, unethical, and 

oppressive. 

g) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

members of the class. Defendants engaged in unfair methods of competition, 

unfair practices, and deceptive practices in the conduct of trade and commerce 

366. The plaintiff and members of the class have been injured in their business or 

property by reason of Jazz’s violations of the laws set forth above, in that the plaintiff and class 

members were, and continue to be: (i) denied the opportunity to purchase lower-priced generic 

Xyrem; and (ii) paid higher prices for Xyrem than they would have paid but for Jazz’s unlawful 

conduct. These injuries are of the type that the above laws were designed to prevent and flow 

from that which makes Jazz’s conduct unlawful. 

367. The plaintiff and class members accordingly seek damages and multiple damages 

as permitted by law. 

COUNT 8 – CONSPIRACY AND COMBINATION IN 

RESTRAINT OF TRADE UNDER STATE LAW 

(AGAINST JAZZ AND HIKMA) 

368. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

369. During the Class Period, Jazz and Hikma engaged in a continuing contract, 

combination or conspiracy with respect to the sale of Xyrem in unreasonable restraint of trade 

and commerce, in violation of the various state antitrust and consumer protection statutes set 

forth below. 

370. During the Class Period, Jazz and Hikma entered into an unlawful reverse 

payment agreement that restrained, and continues to restrain, competition in the market for 

Xyrem and/or its AB-rated generic equivalents. 

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103 

371. Jazz and Hikma’s acts and combinations in furtherance of the conspiracy have 

caused unreasonable restraints in the market for Xyrem and/or its AB-rated generic equivalents. 

372. As a result of Jazz and Hikma’s unlawful conduct, the plaintiff and other similarly 

situated purchasers in the class who purchased Xyrem have been harmed by being forced to pay 

artificially-inflated, supracompetitive prices for Xyrem. 

373. In formulating and carrying out the alleged agreement, understanding, contract, 

combination, and conspiracy, Jazz and Hikma did those things that they combined and conspired 

to do, including but not limited to the acts, practices and course of conduct set forth herein. 

374. Jazz and Hikma’s conspiracy had the following effects, among others: the reverse 

payment agreement between Jazz and Hikma delayed generic entry and its attendant lower prices 

for the plaintiff and the class, and the market allocation output restriction agreement effectively 

fixed prices at an artificially high level. 

375. Jazz and Hikma engaged in the actions described above for the purpose of 

carrying out their unlawful agreements to fix, raise, maintain, or stabilize prices of Xyrem. 

376. There was no legitimate, non-pretextual, pro-competitive business justification for 

this reverse payment agreement that outweighs its harmful effect on the plaintiff and 

competition. Even if there were some conceivable and cognizable justification, the payment was 

not necessary to achieve the purpose. Accordingly, these acts constitute violations of the antitrust 

laws of various states in accordance with FTC v. Actavis, Inc., 570 U.S. 136 (2013). 

377. By engaging the foregoing conduct, Jazz and Hikma intentionally and wrongfully 

engaged in a contract, combination, or conspiracy in restraint of trade in violation of the 

following state antitrust laws: 

a) Arizona Rev. Stat. §§ 44-1403, et seq., with respect to purchases in Arizona 

by members of the class. 

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104 

b) Cal. Bus. & Prof. Code §§ 16700, et seq., with respect to purchases in 

California by members of the class. 

c) C.G.S.A. §§ 35-26 and 28, et seq., with respect to purchases in Connecticut by 

members of the class. 

d) D.C. Code §§ 28-4502, et seq., with respect to purchases in the District of 

Columbia by members of the class. 

e) Haw. Rev. Stat. §§ 480-2, 480-4, et seq., with respect to purchases in Hawaii 

by members of the class. 

f) 740 Ill. Comp. Stat. 10/1, et seq., with respect to purchases in Illinois by 

members of the class. 

g) Iowa Code § 553.4, et seq., with respect to purchases in Iowa by members of 

the class. 

h) Kan. Stat. Ann. § 50-101, et seq., with respect to purchases in Kansas by 

members of the class. 

i) Me. Rev. Stat. Ann. 10, §§ 1101, et seq., with respect to purchases in Maine 

by consumer members of the class. 

j) MD Code Ann., Com. Law, §§ 11-204, et seq., with respect to purchases in 

Maryland by members of the class. 

k) Mich. Comp. Laws Ann. §§ 445.771, et seq., with respect to purchases in 

Michigan by members of the class. 

l) Minn. Stat. §§ 325D.51, et seq., and Minn. Stat. §§ 8.31, et seq., with respect 

to purchases in Minnesota by members of the class. 

m) Miss. Code Ann. §§ 75-21-3, et seq., with respect to purchases in Mississippi 

by members of the class. 

n) Neb. Rev. Stat. Ann. §§ 59-801, et seq., with respect to purchases in Nebraska 

by members of the class. 

o) Nev. Rev. Stat. Ann. §§ 598A.060, et seq., with respect to purchases in 

Nevada by members of the class. 

p) N.H. Rev. Stat. Ann. §§ 356:1, et seq., with respect to purchases in New 

Hampshire by members of the class. 

q) N.M. Stat. Ann. §§ 57-1-1, et seq., with respect to purchases in New Mexico 

by members of the class. 

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105 

r) N.Y. Gen. Bus. Law § 340, et seq., with respect to purchases in New York by 

members of the class, and to the extent New York law so requires, the plaintiff 

hereby forgoes any penalty or minimum recovery in order to preserve the right 

of New York class members to recover by way of a class action. 

s) N.C. Gen. Stat. §§ 75-1, et seq., with respect to purchases in North Carolina 

by members of the class. 

t) N.D. Cent. Code §§ 51-08.1-01, et seq., with respect to purchases in North 

Dakota by members of the class. 

u) Or. Rev. Stat. §§ 646.705, et seq., with respect to purchases in Oregon by 

members of the class. 

v) R.I. Gen. Laws §§ 6-36-4 et seq., with respect to purchases in Rhode Island by 

members of the class. 

w) S.D. Codified Laws §§ 37-1-3.1, et seq., with respect to purchases in South 

Dakota by members of the class. 

x) Tenn. Code Ann §§ 47-25-101, et seq., with respect to purchases in Tennessee 

by members of the class. 

y) Utah Code Ann. §§ 76-10-3101, et seq., with respect to purchases in Utah by 

members of the class, including citizens or residents of Utah. 

z) W.Va. Code §§ 47-18-1, et seq., with respect to purchases in West Virginia by 

members of the class. 

aa) Wis. Stat. §§ 133.03, et seq., with respect to purchases in Wisconsin by 

members of the class. 

378. Jazz and Hikma intentionally and wrongfully engaged in a contract, combination, 

or conspiracy in restraint of trade in violation of the following state consumer protection laws: 

a) Alaska Stat. Ann. § 45.50.471, et seq., with respect to purchases in Alaska by 

members of the class. Defendants engaged in unfair methods of competition 

and unfair practices in the conduct of trade and commerce. 

b) Cal. Bus. & Prof. Code §§ 17200, et seq., with respect to purchases in 

California by members of the class. Defendants engaged in business practices 

that are unfair in that they are immoral, unethical, oppressive, unscrupulous, 

and substantially injurious to class members. There are no countervailing 

benefits to class members and any utility of defendants’ conduct is 

outweighed by the consequences to class members. Defendants’ conduct also 

constitutes an unlawful business practice in that it violates the Sherman Act as 

set forth above. 

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c) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class. 

d) Mo. Rev. Stat. §§ 407.020 et seq., with respect to purchase in Missouri by 

consumer members of the class. 

e) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by consumer members of the class. Defendants engaged in unfair and 

deceptive acts and practices. 

f) S.C. Code Ann. §§ 39-5-20, et seq., with respect to purchases in South 

Carolina by class members. Defendants engaged in unfair methods of 

competition and unfair practices in the conduct of trade and commerce. 

Defendants’ conduct is offensive to public policy and immoral, unethical, and 

oppressive. 

g) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

consumer members of the class. Defendants engaged in unfair methods of 

competition, unfair practices, and deceptive practices in the conduct of trade 

and commerce. 

379. The plaintiff and members of the class have been injured in their business or 

property by reason of Jazz and Hikma’s violations of the laws set forth above, in that the plaintiff 

and class members were, and continue to be: (i) denied the opportunity to purchase lower-priced 

generic Xyrem; and (ii) paid higher prices for Xyrem than they would have paid but for Jazz and 

Hikma’s unlawful conduct. These injuries are of the type that the above laws were designed to 

prevent and flow from that which makes Jazz and Hikma’s conduct unlawful. 

380. The plaintiff and class members accordingly seek damages and multiple damages 

as permitted by law. 

COUNT 9 – CONSPIRACY AND COMBINATION IN 

RESTRAINT OF TRADE UNDER STATE LAW 

(AGAINST JAZZ AND AMNEAL) 

381. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

382. During the Class Period, Jazz and Amneal engaged in a continuing contract, 

combination, or conspiracy with respect to the sale of Xyrem in unreasonable restraint of trade 

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107 

and commerce, in violation of the various state antitrust and consumer protection statutes set 

forth below. 

383. During the Class Period, Jazz and Amneal entered into an unlawful reverse 

payment agreement that restrained, and continues to restrain, competition in the market for 

Xyrem and/or its AB-rated generic equivalents. 

384. Jazz and Amneal’s acts and combinations in furtherance of the conspiracy have 

caused unreasonable restraints in the market for Xyrem and/or its AB-rated generic equivalents. 

385. As a result of Jazz and Amneal’s unlawful conduct, the plaintiff and other 

similarly situated purchasers in the class who purchased Xyrem have been harmed by being 

forced to pay artificially-inflated, supracompetitive prices for Xyrem. 

386. In formulating and carrying out the alleged agreement, understanding, contract, 

combination, and conspiracy, Jazz and Amneal did those things that they combined and 

conspired to do, including but not limited to the acts, practices and course of conduct set forth 

herein. 

387. Jazz and Amneal’s conspiracy had the following effects, among others: the 

reverse payment agreement between Jazz and Amneal delayed generic entry and its attendant 

lower prices for the plaintiff and the class, and the market allocation output restriction agreement 

effectively fixed prices at an artificially high level. 

388. Jazz and Amneal engaged in the actions described above for the purpose of 

carrying out their unlawful agreements to fix, raise, maintain, or stabilize prices of Xyrem. 

389. There was no legitimate, non-pretextual, pro-competitive business justification for 

this reverse payment agreement that outweighs its harmful effect on the plaintiff and 

competition. Even if there were some conceivable and cognizable justification, the payment was 

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108 

not necessary to achieve the purpose. Accordingly, these acts constitute violations of the antitrust 

laws of various states in accordance with FTC v. Actavis, Inc., 570 U.S. 136 (2013). 

390. By engaging the foregoing conduct, Jazz and Amneal intentionally and 

wrongfully engaged in a contract, combination or conspiracy in restraint of trade in violation of 

the following state antitrust laws: 

a) Arizona Rev. Stat. §§ 44-1403, et seq., with respect to purchases in Arizona 

by members of the class. 

b) Cal. Bus. & Prof. Code §§ 16700, et seq., with respect to purchases in 

California by members of the class. 

c) C.G.S.A. §§ 35-26 and 28, et seq., with respect to purchases in Connecticut by 

members of the class. 

d) D.C. Code §§ 28-4502, et seq., with respect to purchases in the District of 

Columbia by members of the class. 

e) Haw. Rev. Stat. §§ 480-2, 480-4, et seq., with respect to purchases in Hawaii 

by members of the class. 

f) 740 Ill. Comp. Stat. 10/1, et seq., with respect to purchases in Illinois by 

members of the class. 

g) Iowa Code § 553.4, et seq., with respect to purchases in Iowa by members of 

the class. 

h) Kan. Stat. Ann. § 50-101, et seq., with respect to purchases in Kansas by 

members of the class. 

i) Me. Rev. Stat. Ann. 10, §§ 1101, et seq., with respect to purchases in Maine 

by consumer members of the class. 

j) MD Code Ann., Com. Law, §§ 11-204, et seq., with respect to purchases in 

Maryland by members of the class. 

k) Mich. Comp. Laws Ann. §§ 445.771, et seq., with respect to purchases in 

Michigan by members of the class. 

l) Minn. Stat. §§ 325D.51, et seq., and Minn. Stat. §§ 8.31, et seq., with respect 

to purchases in Minnesota by members of the class. 

m) Miss. Code Ann. §§ 75-21-3, et seq., with respect to purchases in Mississippi 

by members of the class. 

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n) Neb. Rev. Stat. Ann. §§ 59-801, et seq., with respect to purchases in Nebraska 

by members of the class. 

o) Nev. Rev. Stat. Ann. §§ 598A.060, et seq., with respect to purchases in 

Nevada by members of the class. 

p) N.H. Rev. Stat. Ann. §§ 356:1, et seq., with respect to purchases in New 

Hampshire by members of the class. 

q) N.M. Stat. Ann. §§ 57-1-1, et seq., with respect to purchases in New Mexico 

by members of the class. 

r) N.Y. Gen. Bus. Law § 340, et seq., with respect to purchases in New York by 

members of the class, and to the extent New York law so requires, the plaintiff 

hereby forgoes any penalty or minimum recovery in order to preserve the right 

of New York class members to recover by way of a class action. 

s) N.C. Gen. Stat. §§ 75-1, et seq., with respect to purchases in North Carolina 

by members of the class. 

t) N.D. Cent. Code §§ 51-08.1-01, et seq., with respect to purchases in North 

Dakota by members of the class. 

u) Or. Rev. Stat. §§ 646.705, et seq., with respect to purchases in Oregon by 

members of the class. 

v) R.I. Gen. Laws §§ 6-36-4 et seq., with respect to purchases in Rhode Island by 

members of the class. 

w) S.D. Codified Laws §§ 37-1-3.1, et seq., with respect to purchases in South 

Dakota by members of the class. 

x) Tenn. Code Ann §§ 47-25-101, et seq., with respect to purchases in Tennessee 

by members of the class. 

y) Utah Code Ann. §§ 76-10-3101, et seq., with respect to purchases in Utah by 

members of the class, including citizens or residents of Utah. 

z) W.Va. Code §§ 47-18-1, et seq., with respect to purchases in West Virginia by 

members of the class. 

aa) Wis. Stat. §§ 133.03, et seq., with respect to purchases in Wisconsin by 

members of the class. 

391. Jazz and Amneal intentionally and wrongfully engaged in a contract, combination 

or conspiracy in restraint of trade in violation of the following state consumer protection laws: 

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110 

a) Alaska Stat. Ann. § 45.50.471, et seq., with respect to purchases in Alaska by 

members of the class. Defendants engaged in unfair methods of competition 

and unfair practices in the conduct of trade and commerce. 

b) Cal. Bus. & Prof. Code §§ 17200, et seq., with respect to purchases in 

California by members of the class. Defendants engaged in business practices 

that are unfair in that they are immoral, unethical, oppressive, unscrupulous, 

and substantially injurious to class members. There are no countervailing 

benefits to class members and any utility of defendants’ conduct is 

outweighed by the consequences to class members. Defendants’ conduct also 

constitutes an unlawful business practice in that it violates the Sherman Act as 

set forth above. 

c) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class. 

d) Mo. Rev. Stat. §§ 407.020 et seq., with respect to purchase in Missouri by 

consumer members of the class. 

e) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by consumer members of the class. Defendants engaged in unfair and 

deceptive acts and practices. 

f) S.C. Code Ann. §§ 39-5-20, et seq., with respect to purchases in South 

Carolina by class members. Defendants engaged in unfair methods of 

competition and unfair practices in the conduct of trade and commerce. 

Defendants’ conduct is offensive to public policy and immoral, unethical, and 

oppressive. 

g) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

consumer members of the class. Defendants engaged in unfair methods of 

competition, unfair practices, and deceptive practices in the conduct of trade 

and commerce. 

392. The plaintiff and members of the class have been injured in their business or 

property by reason of Jazz and Amneal’s violations of the laws set forth above, in that the 

plaintiff and class members were, and continue to be: (i) denied the opportunity to purchase 

lower-priced generic Xyrem; and (ii) paid higher prices for Xyrem than they would have paid but 

for Jazz and Amneal’s unlawful conduct. These injuries are of the type that the above laws were 

designed to prevent and flow from that which makes Jazz and Amneal’s conduct unlawful. 

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111 

393. The plaintiff and class members accordingly seek damages and multiple damages 

as permitted by law. 

COUNT 10 – CONSPIRACY AND COMBINATION IN 

RESTRAINT OF TRADE UNDER STATE LAW 

(AGAINST JAZZ AND LUPIN) 

394. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

395. During the Class Period, Jazz and Lupin engaged in a continuing contract, 

combination, or conspiracy with respect to the sale of Xyrem in unreasonable restraint of trade 

and commerce, in violation of the various state antitrust and consumer protection statutes set 

forth below. 

396. During the Class Period, Jazz and Lupin entered into an unlawful reverse payment 

agreement that restrained, and continues to restrain, competition in the market for Xyrem and/or 

its AB-rated generic equivalents. 

397. Jazz and Lupin’s acts and combinations in furtherance of the conspiracy have 

caused unreasonable restraints in the market for Xyrem and/or its AB-rated generic equivalents. 

398. As a result of Jazz and Lupin’s unlawful conduct, the plaintiff and other similarly 

situated purchasers in the class who purchased Xyrem have been harmed by being forced to pay 

artificially-inflated, supracompetitive prices for Xyrem. 

399. In formulating and carrying out the alleged agreement, understanding, contract, 

combination and conspiracy, Jazz and Lupin did those things that they combined and conspired 

to do, including but not limited to the acts, practices, and course of conduct set forth herein. 

400. Jazz and Lupin’s conspiracy had the following effects, among others: the reverse 

payment agreement between Jazz and Lupin delayed generic entry and its attendant lower prices 

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112 

for the plaintiff and the class, and the market allocation output restriction agreement effectively 

fixed prices at an artificially high level. 

401. Jazz and Lupin engaged in the actions described above for the purpose of carrying 

out their unlawful agreements to fix, raise, maintain, or stabilize prices of Xyrem. 

402. There was no legitimate, non-pretextual, pro-competitive business justification for 

this reverse payment agreement that outweighs its harmful effect on the plaintiff and 

competition. Even if there were some conceivable and cognizable justification, the payment was 

not necessary to achieve the purpose. Accordingly, these acts constitute violations of the antitrust 

laws of various states in accordance with FTC v. Actavis, Inc., 570 U.S. 136 (2013). 

403. By engaging the foregoing conduct, Jazz and Lupin intentionally and wrongfully 

engaged in a contract, combination, or conspiracy in restraint of trade in violation of the 

following state antitrust laws: 

a) Arizona Rev. Stat. §§ 44-1403, et seq., with respect to purchases in Arizona 

by members of the class. 

b) Cal. Bus. & Prof. Code §§ 16700, et seq., with respect to purchases in 

California by members of the class. 

c) C.G.S.A. §§ 35-26 and 28, et seq., with respect to purchases in Connecticut by 

members of the class. 

d) D.C. Code §§ 28-4502, et seq., with respect to purchases in the District of 

Columbia by members of the class. 

e) Haw. Rev. Stat. §§ 480-2, 480-4, et seq., with respect to purchases in Hawaii 

by members of the class. 

f) 740 Ill. Comp. Stat. 10/1, et seq., with respect to purchases in Illinois by 

members of the class. 

g) Iowa Code § 553.4, et seq., with respect to purchases in Iowa by members of 

the class. 

h) Kan. Stat. Ann. § 50-101, et seq., with respect to purchases in Kansas by 

members of the class. 

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113 

i) Me. Rev. Stat. Ann. 10, §§ 1101, et seq., with respect to purchases in Maine 

by consumer members of the class. 

j) MD Code Ann., Com. Law, §§ 11-204, et seq., with respect to purchases in 

Maryland by members of the class. 

k) Mich. Comp. Laws Ann. §§ 445.771, et seq., with respect to purchases in 

Michigan by members of the class. 

l) Minn. Stat. §§ 325D.51, et seq., and Minn. Stat. §§ 8.31, et seq., with respect 

to purchases in Minnesota by members of the class. 

m) Miss. Code Ann. §§ 75-21-3, et seq., with respect to purchases in Mississippi 

by members of the class. 

n) Neb. Rev. Stat. Ann. §§ 59-801, et seq., with respect to purchases in Nebraska 

by members of the class. 

o) Nev. Rev. Stat. Ann. §§ 598A.060, et seq., with respect to purchases in 

Nevada by members of the class. 

p) N.H. Rev. Stat. Ann. §§ 356:1, et seq., with respect to purchases in New 

Hampshire by members of the class. 

q) N.M. Stat. Ann. §§ 57-1-1, et seq., with respect to purchases in New Mexico 

by members of the class. 

r) N.Y. Gen. Bus. Law § 340, et seq., with respect to purchases in New York by 

members of the class, and to the extent New York law so requires, the plaintiff 

hereby forgoes any penalty or minimum recovery in order to preserve the right 

of New York class members to recover by way of a class action. 

s) N.C. Gen. Stat. §§ 75-1, et seq., with respect to purchases in North Carolina 

by members of the class. 

t) N.D. Cent. Code §§ 51-08.1-01, et seq., with respect to purchases in North 

Dakota by members of the class. 

u) Or. Rev. Stat. §§ 646.705, et seq., with respect to purchases in Oregon by 

members of the class. 

v) R.I. Gen. Laws §§ 6-36-4 et seq., with respect to purchases in Rhode Island by 

members of the class. 

w) S.D. Codified Laws §§ 37-1-3.1, et seq., with respect to purchases in South 

Dakota by members of the class. 

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x) Tenn. Code Ann §§ 47-25-101, et seq., with respect to purchases in Tennessee 

by members of the class. 

y) Utah Code Ann. §§ 76-10-3101, et seq., with respect to purchases in Utah by 

members of the class, including citizens or residents of Utah. 

z) W.Va. Code §§ 47-18-1, et seq., with respect to purchases in West Virginia by 

members of the class. 

aa) Wis. Stat. §§ 133.03, et seq., with respect to purchases in Wisconsin by 

members of the class. 

404. Jazz and Lupin intentionally and wrongfully engaged in a contract, combination, 

or conspiracy in restraint of trade in violation of the following state consumer protection laws: 

a) Alaska Stat. Ann. § 45.50.471, et seq., with respect to purchases in Alaska by 

members of the class. Defendants engaged in unfair methods of competition 

and unfair practices in the conduct of trade and commerce. 

b) Cal. Bus. & Prof. Code §§ 17200, et seq., with respect to purchases in 

California by members of the class. Defendants engaged in business practices 

that are unfair in that they are immoral, unethical, oppressive, unscrupulous, 

and substantially injurious to class members. There are no countervailing 

benefits to class members and any utility of defendants’ conduct is 

outweighed by the consequences to class members. Defendants’ conduct also 

constitutes an unlawful business practice in that it violates the Sherman Act as 

set forth above. 

c) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class. 

d) Mo. Rev. Stat. §§ 407.020 et seq., with respect to purchase in Missouri by 

consumer members of the class. 

e) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by consumer members of the class. Defendants engaged in unfair and 

deceptive acts and practices. 

f) S.C. Code Ann. §§ 39-5-20, et seq., with respect to purchases in South 

Carolina by class members. Defendants engaged in unfair methods of 

competition and unfair practices in the conduct of trade and commerce. 

Defendants’ conduct is offensive to public policy and immoral, unethical, and 

oppressive. 

g) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

consumer members of the class. Defendants engaged in unfair methods of 

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115 

competition, unfair practices, and deceptive practices in the conduct of trade 

and commerce. 

405. The plaintiff and members of the class have been injured in their business or 

property by reason of Jazz and Lupin’s violations of the laws set forth above, in that the plaintiff 

and class members were, and continue to be: (i) denied the opportunity to purchase lower-priced 

generic Xyrem; and (ii) paid higher prices for Xyrem than they would have paid but for Jazz and 

Lupin’s unlawful conduct. These injuries are of the type that the above laws were designed to 

prevent and flow from that which makes Jazz and Lupin’s conduct unlawful. 

406. The plaintiff and class members accordingly seek damages and multiple damages 

as permitted by law. 

COUNT 11 – CONSPIRACY AND COMBINATION IN 

RESTRAINT OF TRADE UNDER STATE LAW 

(AGAINST JAZZ AND PAR) 

407. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

408. During the Class Period, Jazz and Par engaged in a continuing contract, 

combination, or conspiracy with respect to the sale of Xyrem in unreasonable restraint of trade 

and commerce, in violation of the various state antitrust and consumer protection statutes set 

forth below. 

409. During the Class Period, Jazz and Par entered into an unlawful reverse payment 

agreement that restrained, and continues to restrain, competition in the market for Xyrem and/or 

its AB-rated generic equivalents. 

410. Jazz and Par’s acts and combinations in furtherance of the conspiracy have caused 

unreasonable restraints in the market for Xyrem and/or its AB-rated generic equivalents. 

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411. As a result of Jazz and Par’s unlawful conduct, the plaintiff and other similarly 

situated purchasers in the class who purchased Xyrem have been harmed by being forced to pay 

artificially-inflated, supracompetitive prices for Xyrem. 

412. In formulating and carrying out the alleged agreement, understanding, contract, 

combination and conspiracy, Jazz and Par did those things that they combined and conspired to 

do, including but not limited to the acts, practices, and course of conduct set forth herein. 

413. Jazz and Par’s conspiracy had the following effects, among others: the reverse 

payment agreement between Jazz and Par delayed generic entry and its attendant lower prices for 

the plaintiff and the class, and the market allocation output restriction agreement effectively 

fixed prices at an artificially high level. 

414. Jazz and Par engaged in the actions described above for the purpose of carrying 

out their unlawful agreements to fix, raise, maintain, or stabilize prices of Xyrem. 

415. There was no legitimate, non-pretextual, pro-competitive business justification for 

this reverse payment agreement that outweighs its harmful effect on the plaintiff and 

competition. Even if there were some conceivable and cognizable justification, the payment was 

not necessary to achieve the purpose. Accordingly, these acts constitute violations of the antitrust 

laws of various states in accordance with FTC v. Actavis, Inc., 570 U.S. 136 (2013). 

416. By engaging the foregoing conduct, Jazz and Par intentionally and wrongfully 

engaged in a contract, combination, or conspiracy in restraint of trade in violation of the 

following state antitrust laws: 

a) Arizona Rev. Stat. §§ 44-1403, et seq., with respect to purchases in Arizona 

by members of the class. 

b) Cal. Bus. & Prof. Code §§ 16700, et seq., with respect to purchases in 

California by members of the class. 

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117 

c) C.G.S.A. §§ 35-26 and 28, et seq., with respect to purchases in Connecticut by 

members of the class. 

d) D.C. Code §§ 28-4502, et seq., with respect to purchases in the District of 

Columbia by members of the class. 

e) Haw. Rev. Stat. §§ 480-2, 480-4, et seq., with respect to purchases in Hawaii 

by members of the class. 

f) 740 Ill. Comp. Stat. 10/1, et seq., with respect to purchases in Illinois by 

members of the class. 

g) Iowa Code § 553.4, et seq., with respect to purchases in Iowa by members of 

the class. 

h) Kan. Stat. Ann. § 50-101, et seq., with respect to purchases in Kansas by 

members of the class. 

i) Me. Rev. Stat. Ann. 10, §§ 1101, et seq., with respect to purchases in Maine 

by consumer members of the class. 

j) MD Code Ann., Com. Law, §§ 11-204, et seq., with respect to purchases in 

Maryland by members of the class. 

k) Mich. Comp. Laws Ann. §§ 445.771, et seq., with respect to purchases in 

Michigan by members of the class. 

l) Minn. Stat. §§ 325D.51, et seq., and Minn. Stat. §§ 8.31, et seq., with respect 

to purchases in Minnesota by members of the class. 

m) Miss. Code Ann. §§ 75-21-3, et seq., with respect to purchases in Mississippi 

by members of the class. 

n) Neb. Rev. Stat. Ann. §§ 59-801, et seq., with respect to purchases in Nebraska 

by members of the class. 

o) Nev. Rev. Stat. Ann. §§ 598A.060, et seq., with respect to purchases in 

Nevada by members of the class. 

p) N.H. Rev. Stat. Ann. §§ 356:1, et seq., with respect to purchases in New 

Hampshire by members of the class. 

q) N.M. Stat. Ann. §§ 57-1-1, et seq., with respect to purchases in New Mexico 

by members of the class. 

r) N.Y. Gen. Bus. Law § 340, et seq., with respect to purchases in New York by 

members of the class, and to the extent New York law so requires, the plaintiff 

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118 

hereby forgoes any penalty or minimum recovery in order to preserve the right 

of New York class members to recover by way of a class action. 

s) N.C. Gen. Stat. §§ 75-1, et seq., with respect to purchases in North Carolina 

by members of the class. 

t) N.D. Cent. Code §§ 51-08.1-01, et seq., with respect to purchases in North 

Dakota by members of the class. 

u) Or. Rev. Stat. §§ 646.705, et seq., with respect to purchases in Oregon by 

members of the class. 

v) R.I. Gen. Laws §§ 6-36-4 et seq., with respect to purchases in Rhode Island by 

members of the class. 

w) S.D. Codified Laws §§ 37-1-3.1, et seq., with respect to purchases in South 

Dakota by members of the class. 

x) Tenn. Code Ann §§ 47-25-101, et seq., with respect to purchases in Tennessee 

by members of the class. 

y) Utah Code Ann. §§ 76-10-3101, et seq., with respect to purchases in Utah by 

members of the class, including citizens or residents of Utah. 

z) W.Va. Code §§ 47-18-1, et seq., with respect to purchases in West Virginia by 

members of the class. 

aa) Wis. Stat. §§ 133.03, et seq., with respect to purchases in Wisconsin by 

members of the class. 

417. Jazz and Par intentionally and wrongfully engaged in a contract, combination, or 

conspiracy in restraint of trade in violation of the following state consumer protection laws: 

a) Alaska Stat. Ann. § 45.50.471, et seq., with respect to purchases in Alaska by 

members of the class. Defendants engaged in unfair methods of competition 

and unfair practices in the conduct of trade and commerce. 

b) Cal. Bus. & Prof. Code §§ 17200, et seq., with respect to purchases in 

California by members of the class. Defendants engaged in business practices 

that are unfair in that they are immoral, unethical, oppressive, unscrupulous, 

and substantially injurious to class members. There are no countervailing 

benefits to class members and any utility of defendants’ conduct is 

outweighed by the consequences to class members. Defendants’ conduct also 

constitutes an unlawful business practice in that it violates the Sherman Act as 

set forth above. 

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c) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class. 

d) Mo. Rev. Stat. §§ 407.020 et seq., with respect to purchase in Missouri by 

consumer members of the class. 

e) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by consumer members of the class. Defendants engaged in unfair and 

deceptive acts and practices. 

f) S.C. Code Ann. §§ 39-5-20, et seq., with respect to purchases in South 

Carolina by class members. Defendants engaged in unfair methods of 

competition and unfair practices in the conduct of trade and commerce. 

Defendants’ conduct is offensive to public policy and immoral, unethical, and 

oppressive. 

g) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

consumer members of the class. Defendants engaged in unfair methods of 

competition, unfair practices, and deceptive practices in the conduct of trade 

and commerce. 

418. The plaintiff and members of the class have been injured in their business or 

property by reason of Jazz and Par’s violations of the laws set forth above, in that the plaintiff 

and class members were, and continue to be: (i) denied the opportunity to purchase lower-priced 

generic Xyrem; and (ii) paid higher prices for Xyrem than they would have paid but for Jazz and 

Par’s unlawful conduct. These injuries are of the type that the above laws were designed to 

prevent and flow from that which makes Jazz and Par’s conduct unlawful. 

419. The plaintiff and class members accordingly seek damages and multiple damages 

as permitted by law. 

COUNT 12 – CONSPIRACY AND COMBINATION IN 

RESTRAINT OF TRADE UNDER STATE LAW 

(AGAINST ALL DEFENDANTS) 

420. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

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421. During the Class Period, the defendants engaged in a continuing contract, 

combination, or conspiracy with respect to the sale of Xyrem in unreasonable restraint of trade 

and commerce, in violation of the various state antitrust and consumer protection statutes set 

forth below. 

422. During the Class Period, defendants entered into an unlawful reverse payment 

agreement that restrained, and continues to restrain, competition in the market for Xyrem and/or 

its AB-rated generic equivalents. 

423. Defendants’ acts and combinations in furtherance of the conspiracy have caused 

unreasonable restraints in the market for Xyrem and/or its AB-rated generic equivalents. 

424. As a result of defendants’ unlawful conduct, the plaintiff and other similarly 

situated purchasers in the class who purchased Xyrem have been harmed by being forced to pay 

artificially-inflated, supracompetitive prices for Xyrem. 

425. In formulating and carrying out the alleged agreement, understanding, contract, 

combination and conspiracy, defendants did those things that they combined and conspired to do, 

including but not limited to the acts, practices, and course of conduct set forth herein. 

426. Defendants’ conspiracy had the following effects, among others:

a) It delayed and continues to delay generic entry of Xyrem in order to lengthen 

the period in which Jazz’s brand Xyrem could and can monopolize the market 

and make supracompetitive profits; 

b) It will keep an authorized generic from Jazz off the market during Hikma’s 

180-day generic exclusivity period, thereby allowing Hikma to monopolize 

the generic market for Xyrem during the period, and allowing Hikma to make 

supracompetitive profits; 

c) It will, after Hikma’s exclusivity period ends, continue to keep an authorized 

product from Jazz off the market as Amneal, Lupin, and Par enter with “very 

limited” quantities (throttled by Jazz) of generic Xyrem; and 

d) It raised and maintained the prices that the plaintiff and other members of the 

class would and will pay for Xyrem at supracompetitive levels. 

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427. From January 2023 until at least December 31, 2025, Jazz will share its monopoly 

power with Hikma, Amneal, Lupin, and Par, and the companies will jointly maintain an illegal 

monopoly throughout that time. 

428. The defendants engaged in the actions described above for the purpose of carrying 

out their unlawful agreements to fix, raise, maintain, or stabilize prices of Xyrem. 

429. There was no legitimate, non-pretextual, pro-competitive business justification for 

this reverse payment agreement that outweighs its harmful effect on the plaintiff and 

competition. Even if there were some conceivable and cognizable justification, the payment was 

not necessary to achieve the purpose. Accordingly, these acts constitute violations of the antitrust 

laws of various states in accordance with FTC v. Actavis, Inc., 570 U.S. 136 (2013). 

430. By engaging the foregoing conduct, defendants intentionally and wrongfully 

engaged in a contract, combination or conspiracy in restraint of trade in violation of the 

following state antitrust laws: 

a) Arizona Rev. Stat. §§ 44-1403, et seq., with respect to purchases in Arizona 

by members of the class. 

b) Cal. Bus. & Prof. Code §§ 16700, et seq., with respect to purchases in 

California by members of the class. 

c) C.G.S.A. §§ 35-26 and 28, et seq., with respect to purchases in Connecticut by 

members of the class. 

d) D.C. Code §§ 28-4502, et seq., with respect to purchases in the District of 

Columbia by members of the class. 

e) Haw. Rev. Stat. §§ 480-2, 480-4, et seq., with respect to purchases in Hawaii 

by members of the class. 

f) 740 Ill. Comp. Stat. 10/1, et seq., with respect to purchases in Illinois by 

members of the class. 

g) Iowa Code § 553.4, et seq., with respect to purchases in Iowa by members of 

the class. 

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h) Kan. Stat. Ann. § 50-101, et seq., with respect to purchases in Kansas by 

members of the class. 

i) Me. Rev. Stat. Ann. 10, §§ 1101, et seq., with respect to purchases in Maine 

by consumer members of the class. 

j) MD Code Ann., Com. Law, §§ 11-204, et seq., with respect to purchases in 

Maryland by members of the class. 

k) Mich. Comp. Laws Ann. §§ 445.771, et seq., with respect to purchases in 

Michigan by members of the class. 

l) Minn. Stat. §§ 325D.51, et seq., and Minn. Stat. §§ 8.31, et seq., with respect 

to purchases in Minnesota by members of the class. 

m) Miss. Code Ann. §§ 75-21-3, et seq., with respect to purchases in Mississippi 

by members of the class. 

n) Neb. Rev. Stat. Ann. §§ 59-801, et seq., with respect to purchases in Nebraska 

by members of the class. 

o) Nev. Rev. Stat. Ann. §§ 598A.060, et seq., with respect to purchases in 

Nevada by members of the class. 

p) N.H. Rev. Stat. Ann. §§ 356:1, et seq., with respect to purchases in New 

Hampshire by members of the class. 

q) N.M. Stat. Ann. §§ 57-1-1, et seq., with respect to purchases in New Mexico 

by members of the class. 

r) N.Y. Gen. Bus. Law § 340, et seq., with respect to purchases in New York by 

members of the class, and to the extent New York law so requires, the plaintiff 

hereby forgoes any penalty or minimum recovery in order to preserve the right 

of New York class members to recover by way of a class action. 

s) N.C. Gen. Stat. §§ 75-1, et seq., with respect to purchases in North Carolina 

by members of the class. 

t) N.D. Cent. Code §§ 51-08.1-01, et seq., with respect to purchases in North 

Dakota by members of the class. 

u) Or. Rev. Stat. §§ 646.705, et seq., with respect to purchases in Oregon by 

members of the class. 

v) R.I. Gen. Laws §§ 6-36-4 et seq., with respect to purchases in Rhode Island by 

members of the class. 

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w) S.D. Codified Laws §§ 37-1-3.1, et seq., with respect to purchases in South 

Dakota by members of the class. 

x) Tenn. Code Ann §§ 47-25-101, et seq., with respect to purchases in Tennessee 

by members of the class. 

y) Utah Code Ann. §§ 76-10-3101, et seq., with respect to purchases in Utah by 

members of the class, including citizens or residents of Utah. 

z) W.Va. Code §§ 47-18-1, et seq., with respect to purchases in West Virginia by 

members of the class. 

aa) Wis. Stat. §§ 133.03, et seq., with respect to purchases in Wisconsin by 

members of the class. 

431. Defendants intentionally and wrongfully engaged in a contract, combination, or 

conspiracy in restraint of trade in violation of the following state consumer protection laws: 

a) Alaska Stat. Ann. § 45.50.471, et seq., with respect to purchases in Alaska by 

members of the class. Defendants engaged in unfair methods of competition 

and unfair practices in the conduct of trade and commerce. 

b) Cal. Bus. & Prof. Code §§ 17200, et seq., with respect to purchases in 

California by members of the class. Defendants engaged in business practices 

that are unfair in that they are immoral, unethical, oppressive, unscrupulous, 

and substantially injurious to class members. There are no countervailing 

benefits to class members and any utility of defendants’ conduct is 

outweighed by the consequences to class members. Defendants’ conduct also 

constitutes an unlawful business practice in that it violates the Sherman Act as 

set forth above. 

c) Fla. Stat. §§ 501.201, et seq., with respect to purchases in Florida by members 

of the class. 

d) Mo. Rev. Stat. §§ 407.020 et seq., with respect to purchase in Missouri by 

consumer members of the class. 

e) Mont. Code Ann. §§ 30-14-101, et seq., with respect to purchases in Montana 

by consumer members of the class. Defendants engaged in unfair and 

deceptive acts and practices. 

f) S.C. Code Ann. §§ 39-5-20, et seq., with respect to purchases in South 

Carolina by class members. Defendants engaged in unfair methods of 

competition and unfair practices in the conduct of trade and commerce. 

Defendants’ conduct is offensive to public policy and immoral, unethical, and 

oppressive. 

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g) Vt. Stat. Ann. 9, §§ 2453, et seq., with respect to purchases in Vermont by 

consumer members of the class. Defendants engaged in unfair methods of 

competition, unfair practices, and deceptive practices in the conduct of trade 

and commerce. 

432. The plaintiff and members of the class have been injured in their business or 

property by reason of the defendants’ violations of the laws set forth above, in that the plaintiff 

and class members were, and continue to be: (i) denied the opportunity to purchase lower-priced 

generic Xyrem; and (ii) paid higher prices for Xyrem than they would have paid but for the 

defendants’ unlawful conduct. These injuries are of the type that the above laws were designed to 

prevent and flow from that which makes the defendants’ conduct unlawful. 

433. The plaintiff and class members accordingly seek damages and multiple damages 

as permitted by law. 

COUNT 13 – UNJUST ENRICHMENT 

(AGAINST ALL DEFENDANTS) 

434. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

435. To the extent required, this claim is pleaded in the alternative to the other claims 

in this complaint. 

436. The defendants have reaped and retained substantially higher profits due to their 

unlawful scheme. 

437. The plaintiff and class members have conferred and continue to confer an 

economic benefit upon the defendants in the form of profits resulting from the unlawful 

overcharges from Xyrem sales described herein, to the economic detriment of the plaintiff and 

members of the class. 

438. The defendants’ financial gain from their unlawful conduct is traceable to 

overpayments for Xyrem by the plaintiff and class members. 

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439. The plaintiff and members of the class have no adequate remedy at law. 

440. It would be futile for the plaintiff and members of the class to seek to exhaust any 

remedy against the immediate intermediary in the chain of distribution from which they 

indirectly purchased Xyrem, as those intermediaries are not liable and would not compensate the 

plaintiff and class members for the defendants’ unlawful conduct. 

441. The defendants have benefited from their unlawful acts and it would be 

inequitable for defendants to be permitted to retain any of the ill-gotten gains resulting from the 

overpayments made by the plaintiff and the members of the Class for Xyrem sold by Jazz during 

the Class Period. 

442. The financial benefits the defendants derived from overcharging the plaintiff and 

class members for Xyrem is a direct and proximate result of the defendants’ unlawful practices 

described herein. 

443. The financial benefits the defendants derived are ill-gotten gains that rightfully 

belong to the plaintiff and members of the class, who paid and continue to pay artificially 

inflated prices that inured to the defendants’ benefit. 

444. It would be wrong and inequitable, under unjust enrichment principles under the 

laws of each state in the United States as well as the District of Columbia—except for Delaware, 

Georgia, Indiana, Kentucky, Louisiana, New Jersey, Ohio, Oklahoma, Pennsylvania, Texas, 

Virginia, Washington, and Wyoming—for defendants to be permitted to retain any of the 

overcharges that the plaintiff and members of the class paid for Xyrem that were derived from 

the defendants’ unlawful practices described herein. 

445. The defendants are aware of and appreciate the benefits that the plaintiff and 

members of the class have bestowed upon them. 

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446. The defendants should be compelled to disgorge all unlawful or inequitable 

proceeds they received in a common fund for the benefit of the plaintiff and class members. 

447. The plaintiff and members of the class are entitled to the amount of the 

defendants’ ill-gotten gains resulting from their unlawful, unjust, and inequitable conduct, and to 

the establishment of a constructive trust consisting of such amount, from which the plaintiff and 

members of the class may make claims on a pro rata basis. 

COUNT 14 – FOR INJUNCTIVE RELIEF FOR VIOLATIONS OF 15 U.S.C. §§ 1, 2 

(AGAINST ALL DEFENDANTS) 

448. The plaintiff hereby repeats and incorporates by reference each preceding and 

succeeding paragraph as though fully set forth herein. 

449. As set forth in Count 1, 2, 3, 4, 5 and 11, Defendants have violated Sections 1 and 

2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. 

450. The plaintiff requests that the Court granted injunctive relief pursuant to Section 

16 of the Clayton Act, 15 U.S.C. § 26 as may be necessary and appropriate to restore 

competition in the market for Xyrem. 

XII. DEMAND FOR JUDGMENT 

451. WHEREFORE, the plaintiff, on behalf of itself and the proposed class, 

respectfully demand that this Court: 

a) Determine that this action may be maintained as a class action pursuant to 

Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure, and direct that 

reasonable notice of this action, as provided by Rule 23(c)(2), be given to the 

class, and appoint the plaintiff as the named representative of the class; 

b) Award the plaintiff and the class damages (i.e., three times overcharges) in an 

amount to be determined at trial, plus interest in accordance with law; 

c) Enter joint and several judgments against the defendants and in favor of the 

plaintiff and the class; 

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d) Permanently enjoin defendants both from continuing the unlawful conduct 

alleged here, and from engaging in similar or related conduct in the future; 

e) Grant the plaintiff and the class equitable relief in the nature of disgorgement, 

restitution, and the creation of a construction trust to remedy the defendants’ 

unjust enrichment; 

f) Award the plaintiff and the class their costs of suit, including reasonable 

attorneys’ fees, as provided by law; and 

g) Award such further and additional relief as the case may require and the Court 

may deem just and proper under the circumstances. 

XIII. JURY DEMAND 

452. Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the plaintiff, on 

behalf of itself and the proposed class, demand a trial by jury on all issues so triable. 

Dated: June 17, 2020 Respectfully submitted, 

 /s/ Daniel J. Kurowski 

Daniel J. Kurowski 

Whitney K. Siehl 

HAGENS BERMAN SOBOL SHAPIRO LLP

455 N Cityfront Plaza Drive, Suite 2410 

Chicago, IL 60611 

Tel: (708) 628-4949 

Fax: (708) 628-4950 

dank@hbsslaw.com 

whitneys@hbsslaw.com 

Liaison Counsel for Plaintiff Blue Cross and Blue Shield 

Association and the Proposed Class 

Thomas M. Sobol (pro hac vice forthcoming) 

Lauren G. Barnes (pro hac vice forthcoming) 

Bradley J. Vettraino (pro hac vice forthcoming) 

HAGENS BERMAN SOBOL SHAPIRO LLP

55 Cambridge Parkway, Suite 301 

Cambridge, MA 02142 

Tel: (617) 482-3700 

Fax: (617) 482-3003 

tom@hbsslaw.com 

lauren@hbsslaw.com 

bradleyv@hbsslaw.com 

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128 

Brendan G. Stuhan 

BLUE CROSS AND BLUE SHIELD ASSOCIATION

1310 G Street, N.W., 10th Floor 

Washington, D.C. 20005 

(202) 942-1069 

(202) 942-1143 (fax) 

brendan.stuhan@bcbsa.com 

Mark Fischer (pro hac vice forthcoming) 

Jeffrey Swann (pro hac vice forthcoming) 

Robert C. Griffith (pro hac vice forthcoming) 

RAWLINGS & ASSOCIATES, PLLC 

1 Eden Parkway 

La Grange, KY 40031 

Telephone: (502) 814-2139 

mdf@rawlingsandassociates.com 

js5@rawlingsandassociates.com 

rg1@rawlingsandassociates.com 

Counsel for Plaintiff Blue Cross and Blue Shield 

Association and the Proposed Class 

 

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129 

CERTIFICATE OF SERVICE 

The undersigned, an attorney, hereby certifies that on June 17, 2020, a true and correct 

copy of the foregoing was filed electronically via CM/ECF and is available for viewing and/or 

downloading from the CM/ECF system and/or Pacer. 

 /s/ Daniel J. Kurowski 

 Daniel J. Kurowski 

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