Legal, Politics

Allergan’s tribal treaty in Restasis patent fight triggers a Congressional donnybrook

Pharma stories have to have a certain colorful quality to swell into a full public scandal. Martin Shkreli had his social media tantrums to keep him radioactive. Mylan was accused of ripping off schools by leveraging vulnerable kids. And now Allergan has the casino-owning Saint Regis Mohawk Tribe as an ally to win the spotlight.

And it’s getting hot under those lights.

Today four powerful Democratic US senators signed off on a scathing letter to the powers that be in Congress, offering a scathing denunciation of Allergan CEO Brent Saunders’ decision to transfer the patents it holds on Restasis to the tribe and then leasing them back on their blockbuster med, all after a $13.75 million payday to shift control to a group with sovereign immunity — which they believe will protect them from an unfair IPR challenge.

The move was “a blatantly anti-competitive attempt to shield its patents from review and keep drug prices high,” the senators — Margaret Wood Hassan (D-NH), Sherrod Brown (D-OH), Robert Casey (D-PA) and Richard Blumenthal (D-CT) — wrote.

The letter dismisses one of Allergan’s key defenses, which is that state universities have gained that privilege, by noting that the key case involved patents where the original owners had sovereign immunity. This dodge by Allergan, they said, was using sovereign immunity at the “expense of patients” who would be subjected to those higher prices.

Brent Saunders Endpoints News

Now they want the Senate Judiciary Committee to step in and investigate. With public hearings, presumably, in which Saunders and other execs at Allergan will be asked to take an oath and testify in front of the cameras.

Saunders adamantly told me a couple of weeks ago that he wouldn’t budge, regardless of the backlash. The deal with the tribe, he said, had been necessitated by an unfair system that required Allergan to fight for patent protection on two fronts.

“Everything we have done here,” he added, “is completely consistent with our social contract.”

Part of that social contract called for some restraint on drug pricing, which the senators also attacked in their letter by citing a 9.9% price hike on Restasis.

Allergan quickly fired back at the senators Wednesday, saying they were focused on the wrong things. Allergan and the tribal deal shouldn’t be their concern; it’s the IPR process that’s the scandal.

As the Senators are well aware, experts across the legal, biopharmaceutical and business communities have called on Congress to fix the issues inherent within IPR. Congress has failed to act to protect innovation, and the matter is now before the United States Supreme Court.

As we have with the staffs of Senators Maggie Hassan and Sherrod Brown, we welcome the opportunity to discuss these issues with Senators Richard Blumenthal and Robert Casey.  This is an important discussion that needs to be had to ensure we are protecting innovation in the United States.

Mylan CEO Heather Bresch has been here before. Ironically, Mylan has also already challenged the deal, looking to get its own generic into the market.

Seeing another pharma exec dragged into public hearings to discuss pricing and tribal deals and patent control is probably the last thing the industry lobbyists would like to see now, especially as the earlier pricing scandals had been quieting down.

But these stories have a life of their own, if they are built just so.


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