How a Monopoly Is Turning the Date Rape Drug into a Blockbuster Moneymaker

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Expensive medicinePatent protection means you get to charge whatever the market will bear. In this case, it bears a 935% increase in the price tag.

Xyrem is the brand name for sodium oxybate. Sodium oxybate is the sodium salt of γ-hydroxybutyric acid, or GHB—the “date rape drug.” It’s an old drug—even older than aspirin—and it’s FDA-approved for the treatment of excessive daytime sleepiness caused by narcolepsy.

Basically, the very qualities that make it ideal for drugging young women in bars also allows narcoleptic patients to get a deep night’s sleep in order to encourage daytime wakefulness. If its approval can be extended to other patients who have trouble sleeping, the sky will be the limit on how successful this drug can be for its manufacturer, Jazz Pharmaceuticals.

According to “Narcolepsy Blues,” a recent article from Grant’s Interest Rate Observer, Xyrem generated a second-quarter sales growth this year of 43%, despite the fact that between 2006 and 2013, Jazz raised the price of Xyrem by 935%. A year’s worth of the medicine now costs $65,146; its gross profit margins are close to 100%—far better than 60% of the other drugs made by Jazz.

In 2002, Xyrem was granted seven years’ market exclusivity under the FDA orphan drug program: there were no similar drugs to treat cases of excessive daytime sleepiness and cataplexy caused by narcolepsy. Even though GHB is classified as a Schedule 1 drug, which “has no currently accepted medical use in treatment in the United States” and may not be marketed or prescribed, Xyrem (the sodium salt of GHB) is listed as a Schedule 3 drug, which has a currently accepted medical use and may be prescribed. There is no reason for this distinction except as a means to give Jazz greater sales.

How can they do this? Patents are granted by the patent and trademark office. They can be granted anywhere along the development lifeline of a drug and can encompass a wide range of claims. Patents can last up to up to twenty years. On the other hand, market exclusivity is granted by the FDA upon its approval of a drug. These are exclusive marketing rights, and can run from 180 days to seven years. Drugs can have patent exclusivity, market exclusivity, both, or none. It all depends on what criteria they fit.

Now, five years after its Orphan Drug Act market exclusivity expired, Xyrem still faces no competition. Even though other companies have filed applications for generic versions of the drug—not to mention different formulations of the drug—Jazz has also managed to get a patent on how they distribute the drug, since it is a controlled substance. This is facing legal challenges, but until it is resolved, Jazz maintains its monopoly, selling the drug at ludicrously high prices—and reaping a financial bonanza.

Another example is Sovaldi, a drug developed by Gilead Sciences to treat hepatitis C; which can cost up to $84,000 for a single course of treatment. Not all high prices are because of greed alone: the invention of a new drug—which includes the R&D costs of all the molecules that fail the process, not to mention the drug approval process itself—costs, according some estimates, between an average of $1.2 billion to as much as $5 billion.

The monopoly on certain drugs, and high R&D costs that the FDA’s approval process virtually ensures, may be keeping many beneficial treatments off the market. The great pity of it all is that FDA approval doesn’t guarantee, or even promise, drug safety. Each year there are, on average, 526,527 adverse events for FDA-approved drugs—275,421 of which have “serious outcomes,” including death.

So much for the FDA being “the consumer watchdog for safe and effective drugs”!

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  • Carolyn

    Second Verse:
    Replace the FDA & CDC.
    They may have been watchdogs at inception, but times have changed.
    They are paid by the drugs companies.
    How can this be impartial?

  • Profit margin compared to butyrolactone (dehydrated GHB):
    $65K retail for 1 year of Xyrem at 99+% purity.
    $20 (wholesale) for 1 year (1 gallon) of butyrolactone at 99.97% purity.
    That’s a gross margin of 99.6%.
    If we assume that it takes $100 to convert it to the sodium salt,
    $100 to package it and label it,
    $100 to ship it,
    $100 to pay out dividends, and
    $100 to maintain lobbying with Congress to keep their monopoly,
    that’s only a 99% margin.

    It’s a miracle they can stay in business.

    • Tricia Rees

      Agreed. Sadly, they stay in business because of people like me. I have narcolepsy with severe insomnia and without $15,000 worth of Xyrem monthly, I don’t sleep. I have no choice but to keep Jazz Pharmaceuticals, who I equate with “date rapists”, in business. 🙁
      THANK YOU for sharing this!

  • Yet another example of what is wrong with current US drug laws & regulations (Sched 1 vs Sched 3). Probably due to the fact that regulatory agencies have been infiltrated by former execs of the very companies they’re supposed to oversee. Also, a testament to greed.

  • Is it going to take a Class Action Suit against the FDA for contributing to Sexual Assault Nation wide?

  • Although police and the FDA like to state that GHB is THE date-rape drug, and routinely attribute all the amnestic effects of Rhohypnol to GHB, this is a gross exaggeration. Contrary to this myth, GHB does not induce amnesia. Any more than sleep does. With Rohypnol, drugged individuals can lose a half-hour of memory. With GHB, drugged individuals remember everything normally until they fall asleep. So they are perfectly capable of testifying to the circumstances that led up to any assault that took place while asleep. This is not what date-rapist predators want.

    The real crime here is against the elderly. GHB is the only FDA-approved sleep drug that actually enhances sleep architecture instead of further damaging it. GHB deepens stage-3 and stage-4 phases of sleep, which is not only the part of sleep most compromised in older ages, but also the phase of sleep when growth hormone is released and healing is most efficient. For growth hormone enhancement, periodic use is best. Once-weekly doses of butyrolactone (dehydrated GHB, which rapidly converts to GHB in the blood stream) would cost seniors $50/year allowing for a fifteen-fold markup for distributors. The health savings would be phenomenal, to them, and to the health-care (disease-management) system. This hidden cost is a crime against humanity.

  • the FDA and USDA need to be eliminated from the USA, period. They are a danger to our population of the USA.

  • Geraldina Howell

    I think the FDA must have filled their prescription for the stupidity virus drug!

  • BK

    There are those who prefer a Rx for what ails them + those who know Nature has a solution for everything – melatonin, valerian and so much more in this case…

    • Kat

      Melatonin does absolutely nothing for my daughter, who has narcolepsy. See John’s second comment.

  • Frostianne Sewell

    GREEDY, greedy, GREEDY!!!!

  • ricbee

    That seems fair to me,that’s why they spend so much on R&D.

    • Kua

      A friend was mail-ordering G H B precursors 15 years ago. It was easy to prepare, inexpensive and wonderful for me, relieving chronic severe head and neck pain for a few hours.

    • Kat

      Jazz did not pay for the R & D, according to John.

  • Carolyn Villanova

    So not fair for those who use it for what it is intended for. Please do the
    right thing.

  • John

    I’ve recently been very affected by this topic. My sleep has been so bad for well over the past decade that I was recently experiencing diarrhea and extreme loss of appetite after being awoken too soon. I am only able to sleep with earplugs in and I also need to use earmuff headphones. When my ears started hurting from the earplugs and earmuffs, I basically couldn’t sleep at all. I was genuinely ready to die and went several days without eating or having the desire to eat. My body was literally shutting down due to lack of sleep. I gradually was able to start sleeping again but since my sleep has only gotten worse over time it seems quite likely to me that this will lead to my death.

    Since Xyrem is so insanely expensive and hard to get prescribed, I was even going to try to make GHB myself but due to how easy and inexpensive it is to make the pre-cursors have also been banned. Those heartless monsters at Jazz should be ashamed of themselves.

    • John Reiche

      Binaural beats or isochronic tones are available and will absolutely bolw your mind when it comes to relieving pain and getting and staying asleep. I have personaly gotten the best sleep of my life using them. You can get them off you tube or buy a audio rife machine program for your computer from some one like bztronics.com or

  • It is unfortunate that so many people are subject to unscrupulous drugging in their unattended drinks. Young women as especially prone to the malicious dating game that some young men have invented by drugging unsuspecting victims. All too often I have seen the reports of sexual assault victims who do not even know what happened or who did this heinous act to them while they were unconscious typically on college campuses. These kinds of insidious drugs are easily available and too-often distributed unlawfully among people who think it’s “fun” to take advantage of innocent young girls and women.

  • That’s why I do not take prescription drugs unless there is a clear reason for them. Unfortunately, most people are not aware of the problems with drugs. They believe the FDA has their interests at heart. If it’s FDA approved, it must be safe. So goes the sentiment. It’s up to those of us who are paying attention to do what we can to reign in a number of federal agencies, including the FDA. Presently, there are stronger ties between the corporate world and government than between the people and government. Hopefully, we can get back to a government of, by, and for the people. There’s much work to be done.

    • MARIAN

      HAVE YOU EVER READ THE SIDE EFFECTS ON MOST OF THE PRESCRIPTION DRUGS. THEY INCLUDE THE WORDS ” MAY CAUSE DEATH.”

      • susansusansusan

        My car may cause death. My bike. My bathtub. Taking a walk. Sometimes you have to make decisions.

  • Antoinette W

    My daughter takes this medicine for her Narcolepsy. It is so very sad that there is only one place to get this medication and the cost is astronomical! Because it is an orphan drug they can charge whatever they want to. How unfair and it isn’t due to new technology.

    • Austine Wallace

      Sadly many people who take these dangerous prescription drugs do not try safer alternative means such as herbal remedies. I have found that taking two cups of camomile tea during the day and a cup of camomile tea before bed with 25 drops of lemon balm liquid extract and 10 drops of valerian liquid extract, and taking a 500mg. tablet of kava kava usually puts me to sleep. It is much safer and less expensive, and it is a known fact that doctors get a lot of money for pushing prescription drugs. Even the leaves picked from garden violets are very sedative and should be used with care if you want to try making an infusion from them. I think worrying about the excessive costs to pay for prescription drugs alone is enough trouble.

      • John

        Austine, Narcoleptics do not generally have trouble falling asleep, they have trouble getting restful sleep due to spending the majority of time asleep in REM sleep, and can have REM sleep intrude on periods of wakefulness as well.

        While all of the normal recommendations for boosting energy and getting good sleep also apply to people with Narcolepsy, and it is often even more important for us to do things like get regular exercise, have a regular sleep schedule, avoid TV and computers and smartphones before bed, and find whatever diet and herbal remedies can assist us in getting better sleep, for people with Narcolepsy that is not enough. . . . not even close. Suggesting that someone with Narcolepsy does not need to take Xyrem because, heck, Camomile tea and violet leaves help you sleep, is like telling someone with chronic, disfiguring, rheumatoid arthritis not to worry about surgery or drugs because turmeric and ginger tea is a natural anti-inflamitory. Narcolepsy is a debilitating disease, and there are 2 drugs (other than prescription amphetamines which are addictive and can be dangerous) that work really well to treat it. Those drugs are Provigil and Xyrem, and both of those drugs are insanely expensive (Provigil can also be over $10,000 each year) because of artificial monopolies given to the drug companies. Xyrem has its protected status because of the unprecedented security measures that the government requires in order to obtain the drug, even though it has a non-existent abuse rate for the prescription formula (and there is no shortage of the cheap illegal version to use for illegal purposes), and Provigil, modafinil made by Cephalon, has been tied up in court for nearly a decade as Cephalon files suit after suit to keep the patent, which expired in 2006. They colluded with other drug companies, giving payments and royalties to them, to prevent them from making a generic version until 2012, which is being litigated under anti trust laws, and yet still in 2015 you cannot get generic Modafinil. The cost for my prescription is over $1000 each month.

        • Carolyn Quigley

          John – Google Modafinil Cat.
          It’s been a lifesaver for a friend with narcolepsy whose insurance wouldn’t cover her modafinil.

        • susansusansusan

          I bought generic Provigil in Mexico in Walmart (over the counter) for $88 a box. I bought a lot, and they had to order it, but it only took two days.

      • Tricia Rees

        I am a firm believer in herbs, but kava kava and chamomile do not treat narcolepsy and/or cataplexy. There is a reason this specific medication is used. People with narcolepsy do not reach the deep stages of sleep. While your herbs may help you become sedated, they do not make your body enter the deepest stages of sleep and therefore would not be effective against narcolepsy. What is truly sad is that you don’t know that. I’m so tired of hearing how herbs are safer. No one knows. They are not tested. They have been shown to have their own, sometimes deadly, side effects. It is illegal for doctors to get money from prescribing certain drugs. It truly sickens me that you would suggest making an infusion from the leaves of garden violets. I have treated several people in the emergency department who were stupid enough to try that. Expensive as they are, at least prescription drugs are proven to work and are tested.

  • John

    This article misses several points that make the problem even worse than it appears. As mentioned in the article, GHB is older than Aspirin, and MUCH older than Jazz Pharmaceuticals, so why did they get exclusivity? Jazz did not develop this drug and send it through the standard FDA approval by itself, the Government paid for that through its Orphan Drug Program that it funds to provide research and approval for drugs for diseases that do not affect enough people to attract drug company attention. Jazz did not have to pay tens of millions of dollars and dedicate years of its own time that it now has to recoup through high prices. Jazz essentially provides security. The Federal Government treats Xyrem as though it is the most dangerous drug in existence, worse than morphine and codeine and any other addictive pharmaceutical that you could name, even though the abuse rate for Xyrem is essentially 0%. Because of the history of GHB as a date rape drug the Government does not want to responsible for giving people drugs that they are going to use against OTHER people, even if the illegal form of the drug is cheap to produce and better suited for use as a date rape drug, and, generally, people with a paper trail prescription for a “date rape drug” are not likely to use it for such purposes since they would be immediately suspect.

    You cannot get Xyrem from a doctor or a pharmacy, you have to be contacted by Jazz to arrange for signed delivery to the person with the prescription. The patient needs to be contacted every month for a new delivery and to verify the patients residence. Apparently the fear is that people would be knocking over pharmacies to get a drug that can be easily illegally produced for pennies so that they could sell it for less than they could sell other drugs that are harder, if not virtually impossible for a home drug maker, to produce and are also available at a pharmacy, like Oxycontin.

    The high price (of Xyrem) is not considered to be a problem because it ensures that no person will use the legal drug for illegal purposes, if only because they can obtain it ILLEGALLY for literally 1/1600th the cost, and can produce it illegally for less than 1/16000, and it basically involves mixing and boiling completely safe ingredients, not the nightmare danger of something like meth production. The insane stupidity of this is apparent in that the efforts are not to curtail the illegal use of GHB as a date rape drug, but they are to…