How to Protect a Drug Patent? Sell it to a Native American Tribe

“The tribe has many unmet needs,” Dale White, the tribe’s general counsel, said in an interview. “We want to be self-reliant.”

Mr. White said the tribe was approached in April by a Dallas law firm, Shore Chan DePumpo, which proposed the idea. The tribe has already taken ownership of patents owned by a technology company that Mr. White declined to name, but said the Allergan arrangement is the tribe’s first pharmaceutical deal.


Tubes of Restasis, a prescription treatment for acute dry eyes, which had $336 million in sales in the second quarter of this year.

Martin Shields/Alamy

The payments from Allergan — not to mention potential deals with other companies, he said — will give a much-needed boost to the tribe’s approximately $50 million annual budget.

Denise Bradley, a spokeswoman for Teva Pharmceuticals, one of the generic companies that is challenging the Restasis patents, described the deal as “a new and unusual way for a company to try to delay access to high-quality and affordable generic alternatives.” She added that Teva “will be interested to see what comments are made about this tactic by regulatory agencies.”

The announcement Friday is perhaps the most novel attempt to avoid a patent-review process that the brand-name drug industry has railed against in recent years. The process was created in 2011 as a way to streamline patent challenges by allowing them to be decided by an administrative panel, the Patent Trial and Appeal Board. But many patent holders have argued that the process is unfair and unnecessary because patents are already challenged in the federal courts. The Supreme Court will take up the issue next year in the case Oil States vs. Greene’s Energy Group.

In the case of Restasis, the validity of the drug’s six patents — which the company says expire in 2024 — are being heard by the review panel, even as a similar battle is also moving through the federal courts. A trial over the issue recently concluded in U.S. District Court in Texas and a decision in that case has not yet been reached. The deal announced with the Mohawk tribe will not have any bearing on the federal court case. If the company loses that case, its patents would be invalidated regardless of the deal with the tribe.

Brent Saunders, the chief executive of Allergan, said in an interview Friday that the company made the…

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