Allergan’s Tribal Warfare to Save Multi-Billion $ Blockbuster Restasis from Death by Generics | Pharmaguy's Insights Into Drug Industry News |

In an unprecedented move, leading global pharmaceutical company Allergan appears to have handed its Orange Book-listed US patents covering its blockbuster dry eye drug Restasis to the Native American St. Regis Mohawk Tribe in Northern New York.  

The Tribe has granted exclusive licenses in the patents back to Allergan.  The deal will provide the Tribe, which has a population of around 13,000, with $13.75 million up-front and annual royalties of up to $15 million, (crucially, in this case) provided the patents remain valid.

Allergan may have made the move in an attempt to evade challenges from competitors at the Patent Trial and Appeal Board (PTAB) – an administrative court created in 2011 that can cancel patents – in a somewhat controversial, post-issuance review process called "inter partes review" (IPR).

IPRs against the Allergan patents were launched on behalf of generics companies Mylan, Teva, and Akorn Pharmaceuticals. They were expected to reach a result this December. 

Although the deal creates what may seem like a significant yearly dent in Allergan’s accounts, annual sales of Restasis stand at approximately $1.5 billion – second only to Allergan’s biggest-selling, wrinkle treatment product, Botox – and are expected to increase.  With the patents covering Restasis not due to expire until 2024, this multi-million dollar outlay in exchange for extra protection could turn out to be a shrewd piece of business by Allergan’s decision makers.

IPRs were authorised by the 2011 America Invents Act and have arguably revolutionised the way and regularity in which patents are challenged in the USA.  While invalidating a patent via litigation in federal court typically costs millions of dollars, invalidating a patent through the IPR process costs the challenger the relative bargain of a few hundred thousand dollars.  This is similar to the European post-grant opposition process.

The Tribe is, in theory, able to file a motion to dismiss the ongoing IPRs against the granted Restasis patents on account of its “sovereign immunity” status. 

IPRs were designed to improve the US patent system, and quickly and efficiently settle patent validity disputes on novelty and obviousness.  Statistics have shown that fewer IPR petitions are brought against biotech and pharma patents, and there is a lower rate of invalidation of these compared to all technical fields combined, but Allergan have seemingly gone on the defensive early doors.