On Friday, May 12, 2023, Chief District Judge Richard Seeborg of the United States District Court for the Northern District of California certified two classes of Plaintiffs and preliminarily approved a class settlement with two of the Defendant corporations in the case of In re: Xyrem (Sodium Oxybate) Antitrust Litigation, case no. 3:20-md-02966-RS.
In the order, Judge Seeborg found that two plaintiff classes, including a damages class of insurers and third-party payors that paid and/or provided reimbursement for Xyrem in 31 states and a nationwide injunctive relief class of consumers and entities that paid and/or provided reimbursement for Xyrem, meet the requirements of Federal Rule of Civil Procedure 23(b)(2) and (b)(3) and will be certified.
In granting certification, Judge Seeborg rejected Defendants’ primary argument that Xyrem was a “meaningful different drug” that would not have experienced the same loss of market share widely seen across the pharmaceutical industry following generic entry. As Judge Seeborg explained:
“Perhaps the biggest flaw with Defendants’ argument is that it assumes a brand-loyal consumer would always have ordered brand Xyrem. This defies basic logic. Even if a given consumer would have had some particular reason to prefer brand Xyrem when ordering in a given instance, this does not mean they would have chosen brand Xyrem in every other purchase. Rather, that consumer could have switched from a brand to a generic at any time, for many different reasons, or even tried the generic once before switching back to the brand for every other purchase. Again, as long as that consumer would have tried the generic once, the TPP would been injured.”
Under the terms of the settlement agreement, a $3.4 million settlement fund will be established to support continued litigation against the remaining Defendants. Defendant corporation Amneal Pharmaceuticals will contribute $1.9 million, with Lupin Pharmaceuticals contributing the remaining $1.5 million.
In addition to certifying the classes and granting preliminary settlement approval, Judge Seeborg denied Defendants’ motion to exclude portions of Plaintiffs’ expert testimony, including her use of a yardstick to model the impact of generic entry on Xyrem in the absence Defendants’ anticompetitive conduct. Judge Seeborg found that the motion raises issues with the weight of Plaintiffs’ expert testimony rather than its admissibility:
“Dr. Conti’s report provides not only adequate but ample reasons for selecting Provigil. . . While it is true that Provigil followed an aggressive generic erosion curve, Dr. Conti notes that its numerous similarities with Xyrem (including, most importantly, its total sales volume) support using it as a yardstick. On the flip side, she explains why several other drugs would be less useful analogues. That there are differences between Provigil and Xyrem does not fatally undermine her choice. To the extent Defendants believe her analysis was conducted incorrectly and a different drug (or several different drugs) would be more appropriate yardsticks, this can be explored in cross-examination or by proffering an alternative analysis.”
WBE and co-counsel filed this antitrust case against Defendant Jazz Pharmaceuticals, maker of the blockbuster narcolepsy drug Xyrem. Plaintiffs allege that Jazz priced its drugs at anticompetitive prices and engaged in an anticompetitive scheme to delay generic entry of Xyrem to the market, ensuring its monopoly on the drug.
To read Judge Seeborg’s order, click here.