Jazz and Lupin Play Hide and Seek...

Gaston Kroub

Generic challenges to Jazz's Xyrem continue apace. In the latest development, Magistrate Judge Dickson of the US District Court for the District of New Jersey, issued a Letter Order on December 6, 2017, compelling Jazz to produce to Lupin copies of the license agreements Jazz had previously reached with other Xyrem generic challengers (namely, Roxane, Wockhardt, and Ranbaxy). (Letter Order of 12/6/17, Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals LLC et al., D. NJ Civ. Act. No. 13-391 (ES)(JAD)). Jazz's attempt to delay production of the documents failed, as the Court rejected Jazz's argument that production should be delayed until it was clear that they would be relevant to a timely issue in the case, such as during future injunction proceedings. While Lupin's argument that the license agreements were relevant to its invalidity arguments was also rejected, the Court found that the agreements were admittedly relevant to Jazz's pursuit of injunctive relief -- and ordered them produced, albeit with interesting restrictions. 

It is those restrictions that make this otherwise routine discovery dispute interesting. For one, Jazz was instructed to designate the documents under the highest level of confidentiality pursuant to the protective order in the case, thereby restricting their access to Lupin's outside counsel only. More importantly, Lupin was instructed by the Court that it could not "use the settlement / license agreements and information derived therefrom...as part of any settlement discussions." (Letter Order at 5). Therefore, any Lupin outside lawyer exposed to the documents should "be screened from any settlement discussions that Jazz and Lupin have in connection with this matter." (Id.) 

What was the Court trying to avoid with the latter, somewhat unusual, restriction? In short, the Court wanted to eliminate any disadvantage that Jazz would face in any settlement discussions with Lupin. More particularly, there would be a potential for conflict if a Lupin lawyer had seen the prior agreements and was counseling the company regarding settlement negotiations with Jazz, knowing all the while whether Jazz's offers to Lupin were consistent with the settlements it had reached with other generics. Rather than put Lupin's own lawyers such a quandary, the Court decided that the better course was to compel production of the agreements, while making sure that the production of those documents did not have an outsized impact on future settlement discussions between Jazz and Lupin. Considering the sensitivity of branded-generic settlements for important drugs, Jazz is likely satisfied that the potential blow from having to produce the prior agreements won't be a knockout blow in future negotiations with Lupin.