Health Care Services Corp., a Blue Cross Blue Shield affiliate, is suing Jazz Pharmaceuticals over narcolepsy drug Xyrem.
The federal lawsuit, filed Feb. 17 in the Northern District of California, accuses the drugmaker of a "scheme to restrain competition for branded Xyrem" and its generic equivalents. The payer claims Jazz's actions violate antitrust and consumer protection laws.
To control the market, the lawsuit claims the drug abused the FDA's Risk Evaluation and Mitigation Strategies and stifled potentially competitive generic alternatives. It then used its market control to enact "gobsmacking" price hikes.
Xyrem, a closely-regulated drug due to its addiction potential, has been approved by the FDA since 2002, but has been the subject of controversy.
Jazz subsidiary Orphan Medical, the company that developed Xyrem, has had to pay out $20 million in fines over the drug. More than 27,000 serious adverse events and 753 deaths have been reported in patients using Xyrem or Xyrav, another narcolepsy drug developed by Jazz.