Allergan said it will transfer the rights to dry-eye drug Restasis to the Saint Regis Mohawk Tribe, in a move designed to quash challenges filed at the U.S. patent office by rival drugmakers.
Allergan has found an unusual way to shield one of its blockbuster drugs from generic competition.
The drug giant, which is defending its intellectual property on multiple fronts, said it will transfer the rights to Restasis to the Saint Regis Mohawk Tribe, in a move designed to quash challenges filed at the U.S. patent office by rival drugmakers. The medication, a treatment for chronic dry eye, brought in $1.49 billion in sales last year.
The pact, which will entitle the upstate New York tribe to a one-time $13.75 million payment and $15 million a year in royalties, could open up a new way for drugmakers to head off challenges to patents backing billions of dollars a year in sales.
Several top drugmakers have recently reported slowing sales and shrinking profits due to the loss of exclusivity for top-selling medications. At the same time, attacks on drug patents have been made easier under the patent office’s recently created fast-track legal review process.
Most Read Business Stories
- Home prices booming outside King and Pierce counties; one popular explanation has to do with gophers
- Redhook will be fully absorbed by the brewing industry giant it originally defied
- No. 1 milk company declares bankruptcy amid drop in demand VIEW
- Circle the carts, grocery stores. Amazon to take aim at lower-cost groceries with a new store.
- Convoy, the ‘Uber for Trucking’ app, scores $400 million in new round of funding
By moving key patents to a sovereign Native American group, Allergan says it may be able to protect itself. The company said it had been approached by the tribe with what it called a “sophisticated opportunity to strengthen the defense” of Restasis’ patents, which have been challenged under a process called inter partes review, or IPR.
“We realize that we cannot depend solely on casino revenues, ”the Saint Regis Mohawk Tribal Council said in a statement
State and foreign governments can’t be sued or subjected to federal government action except in certain circumstances.
Some legal experts were skeptical that the accord would withstand scrutiny.
“It seems highly suspicious. They’ll have to tread a very careful line with that one,” said Brad Wright, a patent lawyer with Banner & Witcoff in Washington, D.C., who specializes in cases before the agency.
“If they can do it, other drugmakers can do it, and not just other drugmakers but other companies,” he said. “It’s a massive loophole and you could drive a Mack truck through that.”