NEW YORK (Reuters) - Allergan Plc (AGN.N) Chief Executive Brent Saunders on Tuesday defended his company’s decision to transfer drug patents to a Native American tribe as a proper way to shield them from a flawed patent review process, in a response to congressional criticism.
Saunders sent a letter to Republican Senator Charles Grassley and Democratic Senator Dianne Feinstein, the chairman and ranking member of the Senate Judiciary Committee, after four Democratic U.S. senators asked them to launch a committee investigation into the deal.
Allergan said last month that it was transferring patents on its dry eye medication Restasis to New York’s Saint Regis Mohawk Tribe, which agreed to exclusively license them back to the company in exchange for ongoing payments.
The legal maneuver is aimed at removing administrative patent challenges through inter partes review (IPR) by the U.S. Patent Trial and Appeal Board. Generic drug companies often seek to challenge brand-name drug patents through these proceedings, which are cheaper and faster than federal court litigation.
Saunders said the drugmaker was not trying to shield the patents from review through the deal because it still plans to defend the patents in federal court.
He argued, however, that the patents should not be subject to the “flawed and broken” IPR process, because of the tribe’s sovereign immunity.
Last week, Democratic Senators Maggie Hassan, Sherrod Brown, Bob Casey and Richard Blumenthal called Allergan’s transaction with upstate New York’s Saint Regis Mohawk Tribe “a blatantly anti-competitive attempt to shield its patents from review and keep drug prices high.”
Allergan competitor Mylan NV MYL.N, which is challenging the patents through the IPR process, has called Allergan’s deal with the tribe a “sham transaction” and said the tribe should not be allowed to invoke immunity. Some patent lawyers have noted that the patent board has recognise the immunity of state entities like public universities, and tribal immunity is considered to be an even stronger shield.
Reporting by Michael Erman; Editing by Steve Orlofsky