Jazz Pharma to Fight FDA in Court Over Rival Sleep Drug Approval

A pharmaceutical manufacturer known for its sleep medicines will argue Friday before a federal district court that the FDA violated an orphan drug law when it approved a rival product.

Jazz Pharmaceuticals PLC will take to the US District Court for the District of Columbia to argue its case against the Food and Drug Administration on whether the agency violated the Orphan Drug Act when it approved Avadel CNS Pharmaceuticals LLC’s Lumryz, a rival product of Jazz’s narcolepsy drug Xywav.

At issue before the court is whether the FDA’s interpretation of “same drug” applies to Xywav and Lumryz. Jazz argues the FDA didn’t have statutory authority to use “clinical superiority” to break orphan drug exclusivity when it approved Lumryz, and that the agency acted arbitrarily and capriciously when doing so.

Xywav has orphan drug exclusivity through July 21, 2027, and the Orphan Drug Act precludes the FDA’s consideration of “clinical superiority” in determining that Lumryz is not the “same drug” as Xywav, according to Jazz. But the FDA wrote that Lumryz is not the same because the agency defines “same drug” to exclude a “’clinically superior’ drug, including one that makes a ‘major contribution to patient care.’”

The agency contends patients taking Lumryz need only take a single dose before they go to bed, whereas patients who take Xywav must wake up during the night to take a second dose.

“You’re going to hear a lot of questions around whether or not the term ‘same drug’ is ambiguous or not,” said Allen Baum, a partner at Barnes & Thornburg. “FDA is saying the term the ‘same drug’ is ambiguous and that gives us the flexibility to interpret what same drug means.”

The case is a “classic Chevron case,” Baum said, in regard to how agency deference may come into play in this suit. The Chevron doctrine was born out of Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., a 1984 Supreme Court case that set forth a legal test generally requiring courts to defer to a federal agency’s reasonable interpretation when a statute is determined ambiguous.

“That’s what FDA in the past would have argued—that it’s ambiguous, we went through the rulemaking process, our interpretation is reasonable, and Chevron applies,” he said.

The ‘Same Drug’

The Orphan Drug Act of 1983 allows seven years of market exclusivity to drugs that are designated and approved to treat rare diseases. The FDA during that time “‘may not approve another [new drug application] … for the same drug for the same disease or condition,’ if submitted by a different company, ‘until the expiration of seven years from the date of the approval of the approved application,’” Jazz wrote in its complaint.

Jazz’s challenge against the FDA mainly argues the agency is narrowly confined to two exceptions to break an orphan drug’s patent exclusivity and approve a competing product: if the first drug is in shortage, or the sponsor of the first drug consents in writing to the approval. The company also wrote Xywav and Lumryz are the same drug because of their same active moiety, oxybate, and “Xywav’s exclusivity-protected indication entirely subsumes the only indication for which Lumryz was approved.”

But the FDA wrote the Orphan Drug Act didn’t “explain when two ‘drugs’ are the same or different,” and that it is “within FDA’s authority to define what is the ‘same’ and what is a ‘different’ drug.”

“The term ‘same drug,’ as relevant here, means ‘a drug that contains the same active moiety as a previously approved drug and is intended for the same use as the previously approved drug ... except that if the subsequent drug can be shown to be clinically superior to the first drug, it will not be considered to be the same drug,” the agency wrote in a support brief for cross-motion for summary judgment.

The FDA defined a drug as “clinically superior” if it is “shown to provide a significant therapeutic advantage over and above that provided by an approved drug by showing greater effectiveness, greater safety, or in unusual cases, where neither greater safety nor greater effectiveness has been shown, a demonstration that the drug otherwise makes a major contribution to patient care.

Jazz, though, “has made some interesting arguments as part of their lawsuit,” said Sara W. Koblitz, a director at Hyman, Phelps & McNamara PC.

“One is the breadth of the statutory interpretation argument, which is, FDA lost on statutory interpretation under the Orphan Drug Act consistently in the last 10 years or so,” Koblitz said, highlighting the previous cases where the agency has been brought to court for being inconsistent with the implementation of the Orphan Drug Act.

“It seems like this is another place where FDA has a weakness, but they’re making a very broad argument saying that the same drug means the same drug and that there’s no way to break exclusivity based on clinical superiority,” she said.

“There’s this presumption that clinical superiority can break orphan drug exclusivity—everybody’s operated under that since 1992. It would be really groundbreaking if their interpretation was adopted,” Koblitz said.

If the FDA ends up losing this case, “it’s really going to cut back a lot of what they can do with orphans—the carve outs and mechanisms,” said James Boiani, an attorney and member at Epstein Becker & Green, P.C. “This could knock out the clinical superiority pathway and ultimately strengthen orphan protection.”

A Chevron Case

The Supreme Court this term is weighing two cases, Loper Bright Enters. v. Raimondo and Relentless, Inc. v. Dep’t of Commerce, where the justices will determine whether to continue giving agencies Chevron deference for interpretations of ambiguous terms in their statutes. The high court’s decision is expected to have a major impact on agencies, but the outcome for the FDA could shake up how the agency defines a term.

“At worst,” the FDA wrote in a motion, “‘same drug’ is ambiguous and FDA’s interpretation should be upheld as reasonable.”

“To avoid Chevron, Jazz denies that Congress gave FDA interpretative authority,” the FDA wrote, but “‘a general conferral of rulemaking or adjudicative authority’ is always sufficient ‘to support Chevron deference for an exercise of that authority within the agency’s substantive field.’”

“This case is essentially Chevron step one, step two, by the book. If Chevron is overturned, it’s going to turn the analysis of this case on its head,” Koblitz said.

The case is Jazz Phamaceuticals, Inc v. Becerra, D.D.C., No. 1:23-cv-01819.