We have seen the future, and it sucks.

Allergan Pulls a Fast One

11th September 2017

Read it.

One of Allergan’s products is Restasis, used for dry eyes, which is an opthalmic formulation of cyclosporine. It’s a valuable part of their portfolio (net revenues of more than a billion dollars per year), but it’s under threat from a patent challenge. Mylan and Teva are both trying to force the drug off patent before its appointed time (which is about 2024). Last December, the US Patent Office granted an inter partes review of the relevant patents, a decision that did not go down well with Allergan or its investors. That form of patent review has been around since 2011 and the America Invents Act, and its purpose is specifically for prior art objections to a granted patent. I’m going to pass on offering an opinion on whether Mylan’s challenge is justified or its chances for success, noting only that getting to the IPR stage does mean that it’s a serious one.

There things stood, as of Friday. Generic challenges to lucrative patented drugs are a regular feature of life in the business, but what happened next wasn’t (or not yet). Allergan announced that they had transferred the patent rights for Restasis to the St. Regis Mohawk Indian Nation, for an up-front payment and continuing annual payments to the tribe. Why would one do such a thing? Well, it turns out that whatever patented IP owned by the tribe is protected from inter partes review challenges by their sovereign immunity. The Mohawks are, then, immediately moving to dismiss the PTO’s actions. Let me tell you, on Friday afternoon the sound of people all over the biopharma world slapping their foreheads was echoing through the boardrooms, office suites, and hallways.

Once the government starts granting monopolies and calling non-property ‘property’, then the whole process is subject to political maneuvering like this.

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