Biotech Values

[Biowatch]

Jazz patents safety program to extend_drug_coverage

https://www.nytimes.com/2023/02/28/business/jazz-narcolepsy-avadel-patents.html

Jazz Pharmaceuticals has figured out a way to push the boundaries [of patent protection] even further — a feat that demonstrates the lengths to which drug makers go to eke out extra profits and that two federal courts have now ruled was improper.

Jazz’s most important product is a medication for the sleep disorder narcolepsy. The company patented the drug’s formulation. But Jazz also went further, arming itself with a new weapon to block competition.

Because of the drug’s serious side effects and its history of being abused for date rape, federal regulators required Jazz to come up with a plan to ensure that the drug was safely distributed to patients without falling into unintended hands. Jazz’s program included having a single pharmacy nationwide send the medication directly to patients.

Jazz took the unusual step of patenting that safety program and then listing those patents in a federal registry known as the Orange Book. Under an obscure federal rule, if a rival contested one of the patents in certain circumstances, federal regulators would be barred for more than two years from approving that competitor’s product.

That was precisely the strategy that Jazz deployed when a rival was poised to introduce an improved version of the drug.

Jazz’s narcolepsy drug, which is used by thousands of patients, is enormously lucrative, generating more than $13 billion in revenue since Jazz acquired it in 2005. Medicare now spends hundreds of millions of dollars annually for it. The drug accounted for 58 percent of Jazz’s revenue in 2021.

In other words, for every month that Jazz could delay the arrival of competition, the company and its shareholders stood to benefit financially.