Allergan's Restasis Deal Continues to Encounter Criticism

October 24, 2017

 

In the past, we wrote about the drug company Allergan's attempt to evade competition and prolong its monopoly by transferring the patents for its eye drug Restasis to the Saint Regis Mohawk Tribe. Yesterday a coalition of consumer and health groups sent a letter to the Federal Trade Commission (FTC) urging the FTC to investigate Allergan's deal with the tribe and determine whether it violated the antitrust laws. Consumer groups are not happy with this proposed arrangement, and neither are other observers.

 

The letter was sent on behalf of Consumer Action, Consumer Federation of America, Consumers Union, Families USA, Patients for Affordable Drugs, Public Citizen, US PIRG, and the Law Offices of David Balto. The organizations note that Restasis is an immensely profitable drug, having generated $1.4 billion for Allergan in 2016, and that Allergan increased its price by 9.9% in that year. Steady, consistent price hikes can be very harmful to consumers, especially since this price increase is far above the rate of inflation.

 

In September 2017 Allergan transferred its patent claims for Restasis to the Saint Regis Mohawk Tribe, which then granted the company back an exclusive license for the drug in exchange for a $13.75 million payment plus the opportunity to get millions in annual revenues. The Tribe then filed a motion to dismiss review of the patents on the grounds of sovereign immunity, claiming that as a government the Patent and Trademark Office has no authority over them. Until this deal will struck, the Tribe was involved with Restasis at all. It did not help fund the research that led to the drug, it did not help manufacture it, and it did not market it.

 

The organizations write that they "are deeply concerned that this apparent anti-competitive ploy to shield Allergan's patents from appropriate review will artificially prolong its monopoly profits and unjustifiable price hikes in what patients must pay to obtain this important drug." They also express concern that if this deal is allowed to stand, other companies will adopt similar strategies.

 

The letter includes two personal stories of people harmed by Restasis's high costs and concludes by urging the FTC to take a tough look at the deal, and if it violates the law, to take appropriate action.

 

Criticism of Allergan's attempt to block competition keeps coming. Last week, a judge invalidated Allergan's patents and attacked the deal, Senator Maggie Hassan of New Hampshire lambasted the deal during the recent Senate hearing on drug prices, and other Senators have criticized the bargain too. Allergan is digging in its heels, but critics aren't giving up.

 

We urge the FTC to investigate this blatant attempt to manipulate the patent system and take appropriate action to ensure Allergan can't block generic drug competition.

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