Legal

Mylan attacks Allergan over its Mohawk-allied patent strategy — but the CEO is sticking to his guns

Brent Saunders (center, with microphone) speaks at an Endpoints News event at the JP Morgan conference earlier this year Endpoints News


Mylan didn’t wait long before challenging Allergan’s bid to safeguard its patents for its blockbuster eye drug Restasis by flipping the rights to the drug to a Mohawk Indian tribe and then licensing them back.

Last week’s legal gambit, Mylan said in a court filing, is a simple attempt to “misuse Native American sovereignty to shield invalid patents from cancellation.”

But don’t look for Allergan — or its lawyers — to cave in now or anytime. No matter what reaction they get, they plan to fight this one out.

The move by Allergan triggered a number of critical reviews, including one of my own late last week that underscored my thoughts that Allergan had squandered whatever moral advantage it had gained by showing restraint on drug pricing last fall with a bit of legal trickery that would only reignite the public’s scorn for unscrupulous pharma companies and their lawyers.

Allergan CEO Brent Saunders and chief legal officer Bob Bailey took a few minutes on Monday to explain their position. (They can reply to Mylan in court.)

“We can certainly agree to disagree,” Saunders told me, adding adamantly that “everything we have done here is completely consistent with our social contract.”

The CEO and chief legal officer at Allergan say what’s unfair is being forced to square off simultaneously on two separate legal fronts as it fights to keep control of its big franchise therapy. The IRP challenge, adds Saunders, is a flawed process that hedge funds and others have grabbed on to in search of an Achilles heel they can target. Patent challenges should be restricted to the federal court.

Besides, they add, state universities have the same protected patent status as the tribes achieve with sovereign immunity, and no one makes a fuss about that. Paying the Saint Regis Mohawk tribe — looking to diversify beyond its casino operation — $13.75 million for this, they argue, also is an opportunity to help out an impoverished people who can use the money for healthcare and other services.

“We are absolutely going to stick with this,” adds the CEO, as a necessary strategy for balancing the needs of the market and investors against the uncertain world of drug R&D, where the risk of failure runs deep.

To invest in R&D, they add, “we need the full protection of the courts.” If anything, the focus should be on patent reform.

To me, it all just looks like an “anything goes” approach that landed the industry in a tub of boiling hot public disgust on marketing practices — which continues to taint the industry. And there are plenty of ways they can help impoverished people without getting patent attorneys involved.

But I’m not changing anyone’s mind at Allergan either. The controversy over the maneuver, though, will only grow. Reuters reports today that a tech group has also transferred patents to the tribe, and an attorney involved says that you can expect plenty more such cases to follow.

The deals announced so far “are just the tip of the iceberg,” said David Pridham, chief executive of the Dallas-based Dominion Harbor Group. “There are dozens and dozens of tribes talking to law firms about this structure.”


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