Indian tribe used to protect restasis patent challenge

Under the deal, the upstate New York-based Saint Regis Mohawk Tribe will claim what’s known as sovereign immunity as grounds to dismiss a patent challenge through a unit of the United States Patent and Tradark Office. In exchange the tribe will receive US$13.75 million (AU$17.6 m) up front and a further US$15 million (AU$19.2 m) in annual royalties.While that may se like a lot of money, the dry eye drug is Allergan’s top-selling product after its wrinkle injection Botox, and generated almost US$1.5 billion (AU$1.92 b) in sales last year – accounting for approximately 10% of overall revenues. Therefore, the early arrival of a generic version of Restasis before its patents expire in 2024 would be far more costly, especially given the drug accounts for roughly 15% of its profits.{{quote-A:R-W:450-Q:The company announced a US$2 billion (AU$2.56 b) buyback program, calling its shares “substantially undervalued.}}The basis of the bold legal move is found in federal Indian law, which stipulates tribes possess inherent sovereignty – the authority to govern thselves within the borders of the US. It is this same sovereign immunity that allows casinos to operate on tribal land in states where gambling is illegal, so long as its proceeds serve to further the aims of tribal self-governance.Should the move prove successful, it is expected many other drug companies will follow a similar path due to growing frustration within the brand-name pharmaceutical industry over the patent review process. The process was created in 2012 as a way to streamline patent challenges by allowing th to be decided by an administrative panel, but many patent holders have labelled the process unfair – especially as rival companies are also able to make challenges through federal courts.CEO of Allergan Mr Brent Saunders said the company had made the move in an effort to avoid what he called “double jeopardy”, referring to having the same issue heard in two venues. This is because even if Allergan are successful, transferring the patent will only protect the company from challenges that occur through the tribunal – not the federal court.However, while Allergan’s move is being watched and likely quietly applauded by other large pharmaceutical companies, critics have pointed out the average wholesale price of a 30-dose pack of Restasis has more than doubled since 2008.Ms Denise Bradley, a spokeswoman for Teva Pharmceuticals, one of the generic companies challenging the Restasis patents, told The New York Times the deal was “a new and unusual way for a company to try to delay access to high-quality and affordable generic alternatives,” adding that Teva “will be interested to see what comments are made about this tactic by regulatory agencies.”Allergan fell more than 10% in the two weeks since it announced the deal with the tribe, a slide that some analysts attributed in part to fears over the agreent backfiring. In response, the company announced a US$2 billion (AU$2.56 b) buyback program, calling its shares “substantially undervalued.”