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Allergan Pulls A Fast One

Friday brought news of a drug-company maneuver that I had never heard of, and didn’t even realize was possible. First, a bit of background; the stage needs to be set properly.

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.

Is this going to hold up? I Am Not A Patent Lawyer, in this question even more than usual, but the opinions I’ve seen so far are that yes, it very likely is. There are apparently several relevant legal precedents, and clearly both Allergan and the St. Regis Mohawk Nation have received expensive legal counsel that it’s a worthwhile effort. I’m going to assume, for the sake of argument, that they’re going to get away with this one as the law stands. So the next question is, should they? Is this a good thing or a bad one?

Awful, as far as I’m concerned. Awful on several levels. For one, this is not how the patent system (for all its flaws) is supposed to work. “The validity of your patents is subject to review, unless you pay off some Indian tribe” does not seem like a good way to run an intellectual property system. This has changed the balance of the system towards whoever has the cash to cut such a deal. At the very least, the whole Hatch-Waxman framework has probably taken a hit. Second, this absolutely cannot help but look like a slimy legal trick, an association the drug industry absolutely does not need any more of. You don’t have to go into the nuances of prior art or the inter partes review system for people to think this deal smells. That fragrance, needless to say, will not stick just to Allergan; the whole industry gets to wear it, as far as the public’s concerned. And third, God help us, this sets a precedent. When CNBC asked the tribe’s lawyer if they were open to doing more deals like this, he asked them to be sure to print his phone number. And this will no doubt engage the attention of other tribes and other lawyers, compounding the damage done in reference to those first two points.

Is there anything that can be done about this? From what I understand, the answer is “Yes, but it’s a matter for Congress”. The law can be changed, and Congress has every right to do so. But think about what Allergan has done for us: now the drug industry is in a situation where it looks bad, once again, and only thing that can be done about it is to bring Congress’ attention to drug patent law and pricing. Probably just in time for the 2018 midterm election. What a clever idea! Thanks so much.

Update: I should note that Allergan is also in Federal court in Texas, arguing that generic companies are infringing its Restasis patents. Casting the Sovereign Immunity Spell doesn’t (as I understand it) affect this, but I await clarification.

85 comments on “Allergan Pulls A Fast One”

  1. Isidore says:

    The ethics and PR of this aside, you have to hand it to Allergan’s legal department, they employ some very clever lawyers who are able to think outside the box.

    1. Kazoo Chemist says:

      The article states that it was the tribe’s lawyers that approached Allergan with the idea.

      1. Argon says:

        On the plus side, it’s good to see the donations I’ve made to support education and college access for Native Americans is showing a return. Turnabout is fair play.

    2. Paul R. Jones says:

      Sadly, Allergan’s lawyers need to brush up on our U.S. Constitution…once the Indian Citizenship Act of 1924 was passed, there are no more “Indians” within the original meaning of the Constitution…only U.S./State citizens with “Indian ancestry/race” entitled to no more and no less than every other non-Indian U.S./State citizen. There is no such thing under the Constitution as a ‘sovereign Indian tribe’ and any of Allergan’s opponents in their patent dispute can debunk Allergan’s strategy with the faux Indian tribe by demanding an answer to this question…a question so simple, it is hard:
      “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

      1. Vader says:

        “There is no such thing under the Constitution as a ‘sovereign Indian tribe’ ”

        I am not a lawyer. But that’s not my understanding of the current state of the law.

        I’d love to have an actual lawyer chime in, one who is experienced with tribal sovereignty cases.

        1. Ian Malone says:

          You know what, never mind, have just looked at this poster’s history of posts on this article, vs their posts on any other In the Pipeline article…

      2. DWagner says:

        Then who has the unique right to run casinos, subject to an entity within the Interior Dept. called the BIA, which stands for Bureau of Indian Affairs?

    3. Dr. Ronald James D.O. says:

      It is a shame that Allergan has to do a maneuver like this. They have the patent until 2024. Mylan and Teva are trying to infringe on that early so Allergan needs to protect what is legally theirs.

  2. Doug says:

    (IANAL but it’s fun to speculate)
    Let’s see. Companies with IP rush to move it to native tribes where it’s protected from assault. The native tribes wind up with a large chunk of IP, make lots of $$ then change their laws so the IP belongs to them and they rent it back out to the original owners.
    On a side note, this shows how very difficult it is to write laws and create regulations that meet their intended use. There are a lot of very smart people who know how to find the chinks in laws/rules and use them to their advantage. I have no doubt Congress will find a way out of this mess…oh wait…

  3. Andy II says:

    Well, it is extremely sad and upset to see these actions are regarded as “smart” and “cleaver.”

    1. dearieme says:

      Quite right. “Richly comic” would be nearer the mark.

    2. Pennpenn says:

      Well, “cleaver” in the sense of rough butchering might be appropriate…

    3. PeterS says:

      Considering how this country has treated the aboriginal peoples, I’d say turnabout is fair play.

  4. SirWired says:

    The “middle finger” approach to legal maneuvering often works in the short term, but in the long term, it can be catastrophic.

    When somebody intentionally pi$$es off The Powers That Be like this, maybe the govt. can’t get you for whatever sociopathic scheme that’s been cooked up, but you might as well be painting a target on your back for other government action. The poster boy for this would, of course, be Shkreli, which did something entirely legal/evil with his Pharma company, and then had the Feds come down on him like a truck of hammers for some shady behavior in his hedge fund that ordinarily would have received nothing worse than a minor SEC enforcement action. (Normally prosecutors don’t bother pursing a fraud case where nobody actually lost any money in the end.)

    Allergan may suddenly find that minor manufacturing deficiencies are receiving a lot more attention, or their NDAs don’t seem to be clearing as quickly as they would expect.

    1. Emjeff says:

      I hear what you’re saying here, and I largely agree, however, I would point out that it is a federal offence for government officials to retaliate against a company.

      The larger question: Why do Indian tribes apparently have more rights than the rest of us?

      1. anon says:

        You asked, “Why do Indian tribes apparently have more rights than the rest of us?”

        It is simply a matter of different jurisdictions, rather than more rights. Search “Tribal sovereignty in the United States” in Wikipedia for details.

        1. Emjeff says:

          No, it’s not, because if I wanted to move to that area, I would not be considered part of the “tribe”. Therefore, the rights granted to Indian tribes are racially-based. How is that acceptable?

          1. Josiah Rowe says:

            It’s not about race. It’s about treaties the US made with sovereign nations, which have as much right to determine the criteria for citizenship as the US does.

          2. Paul R. Jones says:

            Emjeff says: BINGO! As of the Indian Citizenship Act of 1924, there are no more “Indians” within the original meaning of the Constitution…only U.S./State citizens with “Indian ancestry/race” entitled to no more and no less than every other non-Indian U.S./State citizens. Politicians-state and federal-are lying to We, the People, on Title 25-INDIANS…it is a Constitutional absurdity to contemplate.

          3. Paul R. Jones says:

            Josiah Rowe says:

            The United States Constitution makes for no provisions for:
            1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
            2. Treaties with its own constituency
            3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
            4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
            A simple question for politicians and MSM to answer…a question so simple, it is hard:
            “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

          4. NewYorkCitizen says:

            It’s not racially based in Mohawk country…yet. And many other traditional places. They go by Nationality by your fathers side. They have plenty of Indian looking Indians, but you’d be surprised at the ones that look non-Native. They go by the nationality of your father right up the line. There are Indian people who can’t live there, even though by blood quantum they are Indian…but they don’t fit the criteria to be a citizen by fathers line.

      2. SirWired says:

        “Retaliation” means something very different than what people think. It might be illegal for the government to do something like reject a perfectly valid request for no reason at all. But there is no law that keeps an agency from deciding to scrutinize somebody/something very closely, and taking appropriate (adverse) legal action as a result.

        And on the Indian Tribes; it’s a complex issue, but the Constitution and a succession of treaties over the years gives Indian tribes sovereignty similar to that of states. (And, in this particular case, the tribe is asserting similar authority to what has been used in the past for patents held by state-run universities.) And given that didn’t really give the tribes the option of not joining the USA to begin with, some level of autonomy doesn’t seem too far out of line.

        1. Paul R. Jones says:

          SirWired says: You need to brush up on our United States Constitution’s protection of one’s U.S./State citizenship from political abuse.
          The United States Constitution makes for no provisions for:
          1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
          2. Treaties with its own constituency
          3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
          4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
          A simple question for politicians and MSM to answer…a question so simple, it is hard:
          “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

      3. Paul R. Jones says:

        They don’t!
        Title 25-INDIANS is a political fraud foisted off to dumb down as gullible non-Indian U.S./State citizens into believing that they-politicians-can pass common law that regulates from womb to tomb the capacities, metes and boundaries of a select group of U.S./State citizens since 1924 because of their “Indian ancestry/race!”
        The United States Constitution makes for no provisions for:
        1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
        2. Treaties with its own constituency
        3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
        4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
        A simple question for politicians and MSM to answer…a question so simple, it is hard:
        “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

        1. @PRJ: Strictly speaking, “Title #” is not specified by the Constitution, any more than the intricacies of patent law are. The Constitution is the foundation and basis of Federal law; it does not describe the terms of nor reliably declare the boundaries or reach of Federal law. (As a minor example, we have 50, not 13, states.)

      4. Paul R. Jones says:

        They don’t!

        The United States Constitution makes for no provisions for:
        1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
        2. Treaties with its own constituency
        3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
        4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
        A simple question for politicians and MSM to answer…a question so simple, it is hard:
        “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

        1. Wiseguy says:

          This issue obviously brings out the tin-foil hats

          1. Rhenium says:

            The fourth time he posted it, that’s what finally convinced me…

          2. tangent says:

            Boy, we’ve got a whole passel of tribal sovereignty law experts in here all of a sudden. Or one mostly.

            Needs more peroxynitrites though.

            (With some apologies to Lane Simonian, who seems a fundamentally decent soul and 1) would not spam like this, and 2) is not pushing a theory that’s this dumb (relative to all our theories that ain’t winning). But you do have a certain M.O., Lane.)

        2. I don’t normally comment, but your repeated ignorance is rather stark.

          From the point of view of the Constitution, Indian tribes are sovereign states, like Canada, which is in the purview of the President (with advice and consent of the Senate) to make treaties. The Constitution doesn’t recognize, say, Canada, or the Barbary States as sovereign countries. Yet the United States has made treaties with these entities (hell, the US made treaties with Canada before it was given the right to do so by Britain).

          Dare I point out that the very first treaty signed by George Washington was with an Indian tribe?

      5. PeterS says:

        They were here first?

        🙂

  5. BK says:

    This reminds me of the Trailer Park Boys when Ricky uses kids to steal grills for him.

  6. ugo says:

    A simple and sensible change to the law, by the congress, would be to limit such immunity only to IP generated by people belonging to the tribes.
    Needless to say that Allergan, or any other pharma using it in the future, will be spending ten times over bribing congress(wo)men to keep the law how it is.

    1. tlp says:

      A simple workaround to this would be employing a single native American for a sole purpose of putting his name on every possible patent. Also, hey, diversity!

      1. Kazoo Chemist says:

        Such patents would be invalid unless the listed individual were actually an inventor.

        1. tlp says:

          how easy it is to prove that someone didn’t invent something?

    2. Paul R. Jones says:

      ugo says: You are being duped by politicians-state and federal-since passage of the Indian Citizenship Act of 1924…they are U.S./State citizens…no less and no more.

      The United States Constitution makes for no provisions for:
      1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
      2. Treaties with its own constituency
      3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
      4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
      A simple question for politicians and MSM to answer…a question so simple, it is hard:
      “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

  7. RM says:

    Wait … States also have sovereign immunity, don’t they? So wouldn’t state universities, in so much as they’re branches of the state government, also be immune to inter partes review of any patents they hold, under similar logic?

    1. Derek Lowe says:

      That’s exactly right, and those are the precedents that back up this current move.

      1. mallam says:

        I’d have to disagree on this point. States are subject to US laws, including patent law and rulings (unless you are still part of the Confederacy of course). Native American tribes are not subject to US law.

        1. anon42 says:

          mallam: If AGN would have in-licensed these patents from a state university, there would have not been any IPRs. It is the law today that IP owned by state universities is not subject to IPRs.

          There is no effect on the Hatch-Waxman litigation, as it is the patent owner who is filing the suit and therefore waives sovereign immunity.

          I think the importance of this maneuver that returned the landscape to pre-2011 AIA is a bit overblown.

        2. SirWired says:

          The interactions between tribal governments and the federal government is fiendishly complicated; but I can say that a blanket statement that “Native American tribes are not subject to US law” is profoundly incorrect. (If this were not the case, there would be no need for the extensive body of law and jurisprudence detailing how the two interact.)

          1. Paul R. Jones says:

            SirWired says: You are on the right track.
            1. There is no such thing under the Constitution as an “Indian government!’
            2. As of the Indian Citizenship Act of 1924, they are U.S./State citizens with “Indian ancestry/race” entitled to no more and no less than every other non-Indian U.S./State citizen

        3. Paul R. Jones says:

          mallam says: Wrong! Everyone in the United States is subject to the United States Constitution! There is no such thing under the Constitution as a ‘sovereign Indian tribe’ post The Indian Citizenship Act of 1924!

  8. Isidore says:

    With the standard disclaimer “I am not a lawyer but…”, it had been my understanding that tribal lands have generally the same rights as states with regard to US laws. Which does not jive with their apparent ability to disregard US patent law, which states cannot. On the other hand, tribes just like states cannot conduct independent foreign policy (recent efforts by CA and NY notwithstanding), or declare war, or print their won currency. Aren’t there any lawyers reading this who might enlighten us?

    1. Paul R. Jones says:

      Isidore says: You are on the right track. As of the Indian Citizenship Act of 1924, there are no more “Indians” within the original meaning of the Constitution…only U.S./State citizens with “Indian ancestry/race” entitled to no more and no less than every other non-Indian U.S./State citizen.
      The United States Constitution makes for no provisions for:
      1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
      2. Treaties with its own constituency
      3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
      4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
      A simple question for politicians and MSM to answer…a question so simple, it is hard:
      “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

  9. MP says:

    I don’t see how this is materially different than companies transferring their IP to related businesses overseas in order to gain tax and other legal advantages. Does it seem more shocking because Native Tribes are physically located within the boundaries of the US? This looks like a three-way win between the Tribes (new revenue stream), the pharmaceutical industry (patent protection), and the US government (increased tax revenue from brand-name sales). The losers are the generic manufacturers, along with patients who have to pay for brand-name drugs over longer periods.

  10. MTK says:

    Would it matter to any one if the challenges to the patents by Mylan and Teva were essentially without merit but that Allergan decided to mitigate the risk using this move?

    I ask because we’re all assuming that its Allergan reacting in a somewhat dubious fashion, but what if Allergan is doing this in reaction to dubious moves by Mylan and Teva. It wouldn’t be the first time that a generics company used the threat of a patent challenge in order to negotiate some sort of deal despite the fact that the challenge itself was questionable. And it certainly wouldn’t surprise anyone if Mylan, for example, didn’t give a rat’s behind about ethics.

    (I don’t know a thing about the details here. Just saying…)

    1. skeptical says:

      A dubious move by Mylan? Inconceivable!

      No, I don’t know any details of the patent case either.

  11. myma says:

    When I read about this in the paper the other day, I did the usual check of the date to see if someone was fooling with us and I somehow forgot it was the day for it. Nope.

    If I am reading it right, its not about expiration after a natural duration of the patent, but the inter partes review and suing for validity of a patent.

    Frankly, I always thought the whole Hatch-Waxman game was a bizarre high stakes kabuki legal dance anyway.

  12. Anon says:

    I nominate AGN for the first annual Martin Shkreli Award!

  13. Diver Dude says:

    There is another way to read this. It may be another of the stirrings of the Tribes starting to use the law creatively to see how much of their previously held sovereignty and rights they can recover. There are certainly a lot of “treaties” that have not been observed which would be fertile ground for legal exploration. I imagine it will eventually all end up being tested in the Supreme Court but small steps…

    1. Paul R. Jones says:

      Diver Dude says: The United States Constitution makes for no provisions for:
      1. Indian sovereign nations. None of the asserted tribes possess any of the attributes of being a ‘sovereign nation:’ a. No U.S. Constitution recognition b. No international recognition c. No fixed borders d. No military e. No currency f. No postal system g. No passports h. et al
      2. Treaties with its own constituency
      3. Indian reservations whereby a select group of U.S./State citizens with “Indian ancestry/race” reside exclusively and to the exclusion of all others, on land-with rare exception-that is owned by the People of the United States according to federal documents readily available on-line that notes rights of renters as ‘occupancy and use’ by these distinguished U.S./State citizens with “Indian ancestry/race” only with the land owned by the People of the United States.
      4. Recognition of ‘Indian citizenship’ asserted by various tribes. There is no international/U.S. Constitution recognition of “Indian citizenship” as there is no ‘nation-state’ from which citizenship is derived.
      A simple question for politicians and MSM to answer…a question so simple, it is hard:
      “Where is the proclamation ratified by the voters of the United States that amends the Constitution to make the health, welfare, safety and benefits of a select group of U.S./State citizens distinguishable because of their “Indian ancestry/race?”

    2. Paul R. Jones says:

      Diver Dude says: Faux federally recognized Indian tribes are a fraud upon the Constitution foisted off by politicians-state and federal-to dumb down gullible non-Indian U.S./State citizens into believe that they-politicians-can pass common law that regulates from womb to tomb the capacities, metes and boundaries of a select group of U.S/State citizens because of their “Indian ancestry/race!”

  14. Magrinho says:

    @MTK – certainly the Teva and Mylan do not elicit sympathy. Quite the opposite most of the time. But this maneuver by Allergan is alarming because it creates a template/precedent that could be used to do a lot of damage to patients and to the industry’s reputation as a whole. Was it clever? Sure. Was it creative? Definitely. But put this in the hands of the most unethical amongst us (fill in the blank here) and it would do great damage.

  15. MattF says:

    Allergan has a few tricks up its sleeves. I use Restasis, and it seems to work. But… the retail price for a year’s supply is around $50,000. However, when one’s workplace medication insurance is through Express Scripts, a year’s supply is around $150. So, what’s the -real- price? Who knows

  16. 85 year old postdoc says:

    Great as far as im concerned. Allegan, met with an army of blood sucking patent trolls from rival companies, came up with a legally sound solution to keep a medically useful drug on the market. Good people 1, Evil lawyers 0.

  17. CR says:

    Hmm, I really hope Paul R. Jones can come on and clarify his thoughts. I just haven’t been able to fully understand them. Maybe the 10th post will make it clear.

    But, it cannot be as simple as PRJ is trying to make it otherwise this would not have happened.

    1. MrRogers says:

      Indeed, even a non-lawyer’s reading of Menominee Tribe of Indians v. United States, 391 U.S. 404 (1968), or Bryan v. Itasca County, 426 U.S. 373 (1976) demonstrates that PRJ’s understanding of the law is flawed.

      1. Not a lawyer, just an observer says:

        And the abundance of tribal casinos.

  18. Skyywise says:

    For legal reference, these articles at Patently-O may help clarify where things stand legally.
    1) The case establishing that the IPR proceeding can be stopped by State Sovereign Immunity: https://patentlyo.com/patent/2017/02/sovereign-university-challenge.html

    2) First post on the current Allergan move: https://patentlyo.com/patent/2017/09/allergan-creating-sovereign.html with the following money-quote
    “Of course, a major difference with the university situation is that the university patents are the outcome of original university research. In Allergan’s case one question will be whether the ownership structure creates a sham that can be pierced as if a fraudulent corporate veil.”

    3) Second post on the current Allergan move: https://patentlyo.com/patent/2017/09/tribal-immunity-challenge.html getting more in the actual Sovereign Immunity issue.

  19. Steve says:

    Now that the indian tribes own it, I wonder if another pharma company could approach them with a better offer and stiff Allergan?

    1. The Lunatic says:

      Probably not, for two reasons.

      1) The contract under which Allergan sold it to the tribe will give Allergan exclusive rights as explicit and as air-tight as Allergan’s lawyers can make it.

      2) If the Mohawk tribe stiffs Allergan, it won’t have the opportunity to make this sort of deal again. A potential customer base of “every single company facing inter partes review of their patent” is huge. When Apple, Google, Microsoft, and Amazon (the top 4 companies by market cap in the world) come looking for patent protection, you want a reputation for being easy to deal with, not screwing over your partners.

  20. cato says:

    Didn’t Teva buy Allergan’s generic business two years ago?

    1. Some idiot says:

      Kinda figures… My dealings with Teva have been mercifully limited, but enough to suggest that “business ethics” are not their top priority…

  21. M says:

    Sovereign Immunity Spell! Love it.

    Restasis leviosa!

  22. tangent says:

    “Huh, what is cyclosporine doing for dry eye?” I wondered. So today I learned that chronic dry eye involves inflammation (what doesn’t, really). Corticosteroids for example have effectiveness too, but cyclosporine comes with fewer negative effects.

    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2699789/
    https://www.ncbi.nlm.nih.gov/pubmed/14962426
    (and the role of inflammation was known earlier than that; there doesn’t seem to be a canonical ur-cite)

  23. Anon_EU says:

    I am not a US lawyer and only have a continental law training, but the underlying agreement looks a lot like a sham contract. Can this hold up in the US courts?

    Well, doing the math, it only needs to delay the PTR proceedings some few days, if all the numbers are correct: Restasis creates a billion USD in annual revenues, meaning at least 2,7 million USD a day. The tribe receives 13,75 million USD to buy the patents and up to 15 million USD in royalties.

    The deal seems to pay off within two weeks. Taking into account the confusion it creates and the possibilities to slow down the PTO proceedings, any legal argument serves the purpose. This one is, admittedly, quite beautiful because it plays with some uncharted constitutional law territory in a phase where Congress seems almost obstruct, so well done. But in the long run, it gives so much more incentives to regulate pharmaceutical pricing and maybe even patent law. But if we multiply the number of days to this date with 2,7 million USD…

  24. Passerby says:

    Anon: “Why do Indian tribes apparently have more rights than the rest of us?”

    Yes, a question asked by white people since circa 1787.

    1. Anon says:

      Um, would you like to trade the histories of white people with those of the Indian tribes and how they were treated?

      1. Passerby says:

        I would rather not trade any histories at all.

  25. Buck Jones says:

    I wonder if the challengers (Mylan and Teva) couldn’t make the argument that the contract with the tribe was invalid, on the grounds that the original patent was flawed and thus not Allergan’s to transfer.

    1. Emjeff says:

      No way. They’re wishing they thought of it first…

  26. Jeff says:

    I live in Central New York, where the different Iroquois tribes (of which the St. Regis is one) are constantly after each other, trying to get the biggest share of gambling and cigarette sales. Adherence to principle or the rule of law is variable, depending on who is holding out the most money at any given moment. Allergan apparently thinks it is pulling a fast one here, but they’re partnering with people who are just as likely to yank off Allergan’s knickers as they are to cozy up to Allergan now. This seems like a poorly thought out idea in the longer term.

  27. Anonymous says:

    1. Could this turn around to bite the Indian Nations in the ass? I recently read someplace 🙂 (around 6 or 8 times, I think), that all of this derives from the Indian Citizenship Act of 1924. Couldn’t Congress go back and start modifying MORE things? “No more questionable patent deals.” “No more casino permits (where otherwise excluded by the state).” (More states are legalizing casino gambling and can tax it more than tribal casinos so I think the states would like to see that right disappear.) I’ll bet that other special interests can find more special privileges to hack away.

    2. Anything else In the Pipeline that is better than Restasis and could decrease Allergan’s market share anyway? Put another way, Restasis is currently ~$1B per year for Allergan, but is that projected to increase, decrease or remain the same until expiration (~2024)? (E.g., it is sometimes prescribed following LASIK eye surgery. If LASIK methods improve, it could mean less Restasis; if more and more people opt for LASIK, it could mean more Restasis.)

  28. Mark says:

    There were two books written about such strategems. See The Strange Schemes of Randolph Mason by Melville Davisson Post.

  29. Samuel71 says:

    The FiercePharma story claims that Restasis was initially approved in 1983! Could somebody explain how it is that Allergan still has market exclusivity if this is the case?

  30. Biotech bro says:

    Before 2011 there was no America Invents Act, and there was no IPR.

    How can returning the situation to that pre-2011 equation be some kind of egregious moral failure like you’re making it out to be? It’s really not.

    “Mylan and Teva are both trying to force the drug off patent before its appointed time (which is about 2024)”

    If we really want the patent system to work, then they should wait until 2024 rather than force things before their appointed times. It’s not acting in good faith and you pretending otherwise is just a form of self-flagellation and virtue signalling.

  31. Jon says:

    I had an entirely different thought. Once more, IANAL, but if the Mohawk Nation is in fact sovereign, then it’s not a United States patent anymore, and therefore is only valid in the Mohawk Nation.

    Hm?

    J.

    1. NJBiologist says:

      Many US patents are owned by entities outside the US (IIRC, all of Eli Lilly’s patents are owned by a subsidiary in Ireland, making revenue for those patents subject to Irish corporate tax rates).,

    2. Barry says:

      No, just as a U.S. company or individual can simultaneously hold patents on the same innovation in the U.S. and in other jurisdictions, so a foreign entity (e.g. a tribe) can hold a U.S. patent.

  32. Mike Andrews says:

    If you want to experience how sovereign Indian tribes interact with the Feds and with state and local government, try living in Oklahoma, New Mexico, Arizona, etc., where tribes have their own police organizations and jurisdictions. You might get pulled over by the Seminole Nation Lighthorse Police or the Creek Nation Lighthorse Police, as an example, for speeding on a road in their jurisdiction. They have their own courts, and you may end up in one, without regard to your ancestry, if you do the wrong thing where their law governs.

  33. Paul Camp says:

    I have a hard time getting worked up over this. The IP system is just peachy keen until natives get involved? Fuck that noise.

    If we had a legitimate IP system in the first place, this would not be an issue. The issue is not native tribes. It is a broken system that everyone is trying to game for their advantage. The amount of money any tribe makes pales in comparison to the amount Apple has made by patenting obvious things like rectangles and pointing with your fingers.

    Fix that problem and this “problem” won’t exist.

    1. Barry says:

      The three-fold 18th century test that an innovation must be:
      novel
      utile
      non-obvious
      Is still a good threshold for patentability. Before we change that, we need to see that it’s properly applied. Seems clear to me that the Apple patents you cite should have been denied on one or more of these grounds. The basic deal is that an innovator should get a period of market exclusivity in exchange for enabling his/her competitors by revealing the innovation. But Apple’s competitors knew nothing novel or non-obvious after Apple patented e.g. the rectangular display. Perhaps it meets the threshold for a trademark; that’s different.

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