Legal, Policy

Ten big lobbying groups turn their guns on Allergan’s controversial patent gambit

Brent Saunders, CEO Allergan

Ten of the biggest healthcare lobbying groups in Washington, DC have joined the growing forces lined up against Allergan’s patent gambit involving Restasis.

In a letter to Congress, the alliance — which includes the American Hospital Association and America’s Health Insurance Plans — blasted Allergan $AGN for putting profits ahead of patients and put their CEO in the same camp with notorious biopharma bad boy Martin Shkreli, the price-gouging exec at Turing who’s now chilling in a federal prison awaiting sentencing on three felony convictions.

The actions taken by Allergan and the St. Regis tribe to ensure that patients and payors do not benefit from timely generic competition to Restasis is an alarming new example of the steps that brand name drug companies will take to put profits above the public interest. Over the last two years there has been a great deal of congressional, media and public focus and scrutiny paid to branded products like Daraprim (by Shkreli) and EpiPen (Mylan). Given the ongoing concern about drug costs, it warrants mention that Restasis generates more in annual revenue than both of those products combined.

That follows criticism from a growing lineup of Democrats and Republicans who believe that Allergan is up to no good.

Just weeks ago Allergan found itself in a bright public spotlight after handing over patent rights on Restasis to the Saint Regis Mohawk Tribe, which runs its own casino, in exchange for some hefty payments. Right after, the tribe went to court to claim that its sovereign immunity status trumped an inter partes review of the patent, which threatened the company’s $1.5 billion drug franchise.

The 10 groups noted:

For less than 0.01 percent of the drug’s annual sales, Allergan’s deal could delay competition (by protecting its new patents from review) for at least six additional years.

Allergan CEO Brent Saunders has dug in deep, refusing to budge and vowing to protect a move that he feels is completely justified. Taking to the op-ed pages of the Wall Street Journal, Saunders once again tried to turn the discussion to what he believes is an unfair IPR process.

He wrote:

IPR’s flaws have been exploited by generic manufacturers and a new breed of “reverse trolls.” There have been many cases of hedge funds that demanded cash from branded biopharma companies as a payoff for not filing IPR challenges. Allergan has been the target of one of these extortion-like attacks. Hedge funds have also taken short positions in companies and then filed IPR challenges to drive down their stock value.

The question now is whether lawmakers can quickly ramp up new legislation to throttle the move by Allergan, or if the courts take over for a lengthy review of the legal issues.


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