A highly unusual deal in which Allergan (AGN) is selling patent rights to a Native American tribe is raising troubling questions about the future availability of lower-cost generics — just as prices for prescription medicines are hurting pocketbooks across the country more than ever before.
In a move that took onlookers by surprise, Allergan last Friday announced it will transfer patents for its big-selling Restasis eye drug to the St. Regis Mohawk tribe, which has sovereignty in the U.S. This means the tribe is immune from certain legal claims that generic drug makers typically use to challenge patents held by their brand-name rivals. Such a deal has never been undertaken previously by a drug maker.
In explaining their rationale, Allergan executives specifically pointed to their desire to avoid a type of patent challenge called inter partes reviews. These challenges — which are heard by a special patent appeals board, not a court — have frustrated drug makers since coming on the scene five years ago, because they’re easier and faster to file than more conventional lawsuits.
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