The bipartisan PACED Act would stop Allergan’s patent abuse
Brand pharmaceutical companies are finding new, innovative ways to avoid competition from generic and biosimilar medicines, extend their government-provided monopolies and keep patients paying high drug prices. Look no further than Allergan.
In a first-of-its-kind maneuver, Allergan sold its patents on Restasis – an eye medication with $1.5 billion in annual revenue – to the St. Regis Mohawk Tribe for a one-time payment of nearly $14 million and annual royalties of $15 million. In exchange, the St. Regis Mohawk Tribe immediately filed a motion to dismiss, based on a claim of tribal sovereign immunity that would negate the U.S. Patent Office’s pending review of the Restasis patents.
Concerned about the likelihood of the U.S. Patent Office determining that the Restasis patents were invalid, Allergan engaged in a blatant attempt – and in what a federal judge later called a “sham transaction” – to circumvent a sensible law passed by Congress on a bipartisan basis only a few years ago. Patient groups, health care providers and even other pharmaceutical CEOs openly criticized Allergan’s patent “shenanigans.” And one independent estimate pegged the cost to patients at $10.7 billion as a result of this deal.
Now Senators Tom Cotton (R-AR) and Claire McCaskill (D-MO) are stepping in to stop this kind of abuse of the patent system, disregard of congressional intent and profiteering from patients. The Preserving Access to Cost Effective Drugs (PACED) Act (S. 2514) adheres to a simply premise: those who choose to participate in the patent system must play by its rules.
Congress did not intend for the patent system to be abused in this manner. The PACED Act would prohibit the rental of a tribe’s sovereign immunity by Allergan or any other company. This problem isn’t limited to just one blockbuster drug. If Congress doesn’t respond and Allergan’s business deal is upheld in the courts, these types of transactions could easily be replicated across the brand pharmaceutical industry, resulting in higher drug prices for everyone.
Allergan’s patent “gamesmanship” has already thwarted patient access to generics since the initial Restasis patents expired in 2014. With these recent legal maneuvers, Allergan has successfully delayed generic competition until 2020 even if the courts ultimately void this transaction. Unfortunately, while Allergan uses every legal tool in its arsenal to extend its monopoly protections, the company simultaneously increases the price of Restasis for millions of patients.
The PACED Act is a straightforward, common-sense solution to ensure patient access to more affordable, FDA-approved generics and biosimilars.
By Erik Komendant, Vice President of Federal Affairs at the Association for Accessible Medicines.