Allergan Decries ‘Unfair’ Patent Challenge Process as US House Launches Probe of Tribe Deal

October 6, 2017: By Joan McKenna

legal issuesAllergan CEO Brent Saunders is asking the US Senate Judiciary Committee to review the inter partes review patent challenge process, which he says is unfair.

The move is in response to mounting criticism of Allergan for its deal with the St. Regis Mohawk Tribe to protect Restasis patents using the tribe’s immunity to patent challenges.

Saunders’s request came on the same day that the US House Oversight and Government Committee began its own probe into the deal, saying the Allergan arrangement could “impair competition across the pharmaceutical industry.”

The committee has asked Allergan to turn over by Oct. 17 all communications between Allergan officials and the tribe referring to the Restasis patents, as well as information related to other deals under consideration, and the amount of money received by Allergan from sales of Restasis through federal health care programs, including state programs that receive federal funding.

In Saunders letter, dated Oct. 3, he told the Senate Judiciary Committee that the inter partes review system “creates an unnecessary and unfair burden on innovators of branded medicines by opening up patents to parallel and often inconsistently adjudicated challenges before both federal courts and the (US) Patent Trial and Appeal Board (PTAB).”

The inter partes review process was instituted in September 2012. Such procedures challenge the validity of a US patent through the PTAB.

Patents also can be challenged through the US courts system.

On Sept. 27, four US Senators asked the same committee to investigate Allergan’s tribe agreement, calling it a “blatantly anti-competitive attempt” to shield the patents from review and “keep drug prices high.”

In their letter, Democratic Sens. Maggie Hassan of New Hampshire, Bob Casey of Pennsylvania, Sherrod Brown of Ohio, and Richard Blumenthal of Connecticut said they were “alarmed by Allergan’s efforts to circumvent the congressionally established IPR process.”

They also expressed concern that other brand pharmaceutical companies would make similar arrangements.

The US Supreme Court will consider the constitutionality of the inter partes review process in its current session in a case brought by Oil States Energy Services. Oral arguments have yet to be scheduled.

Allergan announced Sept. 8 that it had transferred Restasis’ patents to the tribe, then licensed them for $13.75 million, plus $15 million in annual royalties.

On Sept. 22, the tribe filed a motion to dismiss inter partes review (IPR) proceedings by petitioners Mylan, Teva, and Akorn, drugmakers that are developing generic versions of Restasis, based on its immunity.

Restasis was US FDA approved in 2003. Its original patent expired in 2014, but Allergan was granted six additional patents that run through Aug. 27, 2024.

Dublin-based Allergan’s Restasis sales in 2016 totaled nearly $1.5 billion of the company’s total revenues of $14.57 billion.

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