Allergan, a multibillion-dollar drug corporation, is attempting to perpetrate a fraud on the American people that would make Bernie Madoff blush — even as it casts itself as a victim.
Allergan (AGN) makes several products, including Restasis, a very expensive brand-name drug that people with dry eye and related conditions take to increase tear production. Failure to treat this condition can impair vision and even lead to blindness.
Allergan is using an unprecedented legal ploy to keep a cheaper generic of Restasis from coming to market: transferring its patent rights for Restasis to the Saint Regis Mohawk tribe in upstate New York. By doing so, it aims to sidestep what’s called inter partes review, a type of patent challenge that is easier and faster to file than a lawsuit. As a sovereign tribal government, the Saint Regis Mohawk tribe claims immunity in inter partes review proceedings.
Congress created the inter partes review as part of the bipartisan Leahy-Smith America Invents Act of 2011 to more efficiently address patent challenges using expert panels at the U.S. Patent and Trademark Office. It is an alternative to costly litigation in federal court. Allergan has stated unabashedly that it transferred the patent to defeat an inter partes review.
The company said that it took this approach because the law is unfair. The company has whined about double jeopardy because patents can be challenged two ways — in federal court and under inter partes review.
In a ruling last week, federal judge William Bryson saw through the ruse. He not only invalidated several Restasis patents, but he also rebuked Allergan. “The Court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed,” he wrote in his decision. “The essence of the matter is this: Allergan purports to have sold the patents to the Tribe, but in reality it has paid the Tribe to allow Allergan to purchase — or perhaps more precisely, to rent — the Tribe’s sovereign immunity in order to defeat the pending IPR proceedings. … What Allergan seeks is the right to continue to enjoy the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits through the administrative mechanism for canceling invalid patents.”
As Judge Bryson pointed out, Congress wrote the America Invents Act specifically to create two processes to challenge patents. And unless a challenge to the Supreme Court reverses the act, it is the law of the land. Yet, deeming the law unfair to them, Allergan and its allies claim the right as victims to circumvent it.
Let’s remember who these self-proclaimed “victims” are: Allergan is a highly profitable Irish drug corporation that garners more than $1.5 billion in revenue from Restasis. Its CEO was paid $62 million from 2014 to 2016. It is the same company that participated in an evasive legal maneuver last year in an attempt to avoid paying U.S. taxes. Joining in support of Allergan are the Pharmaceutical Research and Manufacturers of America and the Biotechnology Innovation Organization, trade associations that spent almost $20 million lobbying Congress last year.
This sham would hurt thousands of American patients who tell us they are forgoing other medications and even food to pay for Restasis because there is no cheaper generic. They are the real victims.
It’s people like Joseph Landi of Boca Raton, Fla. “I’m a retired police officer,” he wrote to Patients For Affordable Drugs, an organization I founded. “My doctor prescribed Restasis for chronic dry eye. I expect to spend at least $1,000 this year for Restasis and there is no cheaper generic. I have had to stop taking other drugs I need to pay for Restasis.”
I understand his concerns. As a patient living with an incurable blood cancer who relies on very expensive drugs to stay alive, I want and need the timely introduction of less expensive generics. And I am appalled by the things that pharmaceutical companies will do to prevent generics from entering the market.
Although Allergan says it will appeal Judge Bryson’s ruling, in the meantime the inter partes review will go forward. I hope the judge in that forum will deny the Saint Regis Mohawk tribe’s motion for dismissal under sovereign immunity. What would be better is for Congress to shut the door to this tactic once and for all.
If we allow big pharmaceutical companies to distract the media and policymakers from the real victims here, thousands of people like Joseph Landi who are struggling to pay for this drug will suffer and that will bring shame on all of us.
David Mitchell is the founder and president of Patients For Affordable Drugs, a nonprofit organization that does not accept money from any company or organization that profits from the development and distribution of prescription drugs.