Drug company Allergan has taken a unique route to avoid a patent challenge. The New York Times reports that the company has transferred the patent for its dry-eye drug Restasis to the Saint Regis Mohawk Tribe. Allergan will pay the tribe $13.75 million as long as they use sovereign immunity to keep away a patent challenge by the U.S. Patent and Trademark Office.
According to The New York Times, the Mohawk tribe will then lease the patent back to Allergan and receive $15 million in royalties every year. The Mohawk live in a rural area of Upstate New York, close to Canada, and said in a statement that this could be a lucrative opportunity for their nation, bringing them beyond the revenue they gain from their Casino.
“The tribe has many unmet needs,” Dale White, the tribe’s general counsel, said in a statement to The New York Times. “We want to be self-reliant.”
Most consumers likely know Allergan for their product Botox, a non-invasive cosmetic procedure. While U.S. consumers spent $13.3 billion on cosmetic procedures in 2015 alone, and 82% of Botox patients reported seeing improvements a week after their treatment (though results only last between three and six months), not everyone is on board with the Allergan decision. In fact, Fortune reports that patient advocacy groups, generic drug companies, and biotech investors showed disagreement around the decision, stating that it will only make the battle on drug pricing worse.
And it was largely seen as an unusual way to go about avoiding the typical patent review process. The New York Times reports that the current patent-review process was created in 2011. In this process, a patent challenge is decided by the Patent Trial and Appeal Board. The process received pushback because patents are challenged in the federal courts as it stands.
In a statement to The New York Times, Denise Bradley, a spokeswoman for Teva Pharmaceuticals, said that Allergan’s move was “a new and unusual way for a company to try to delay access to high-quality and affordable generic alternatives,” and that her company “will be interested to see what comments are made about this tactic by regulatory agencies.”
But some scholars and industry professionals do see merit in the system. In a statement to The New York Times, Rutgers Law School professor Michael Carrier said that he was concerned about the Mohawk deal, partially because the tribe has nothing to do with Restasis.
“Challenges at the patent office play a crucial role in overturning invalid patents, and that role could be undermined by agreements like this,” he said.
No Comment