Allergan CEO Brent Saunders and chief legal officer Bob Bailey explained in a recent interview, that they are being forced to have to protect their patents against what the company considers to be “double jeopardy” in patent disputes.

Should pharmaceutical companies be subjected to double jeopardy? The Fifth Amendment of the United States Constitution provides that “No person shall … be subject for the same offense to be twice put in jeopardy of life or limb.” Are corporations considered to be a person by the court? The Supreme Court seems to have supported this theory in Citizens United v. Federal Election Commission and doubled down in ATM v. Bullock. In the United States Code, 1 U.S.C§1, it is stated that “[when] determining the meaning of any Act of Congress, unless the context indicates otherwise—the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.”

So why are pharmaceuticals not protected by this law?

Allergan pharmaceuticals, the manufacturer of Botox and Restasis, is currently defending its therapeutic Restasis in a Texas Federal court against the generic giants Teva Pharmaceuticals USA, Inc., Apotex, Inc., Akorn, Inc. and Mylan Pharmaceuticals, Inc. Interestingly, Allergan is also defending Restasis against Teva Pharmaceuticals USA, Inc., Akorn, Inc. and Mylan Pharmaceuticals, Inc. through the U.S. Patent and Trade Office’s inter partes review (IPR) process. How is it that a pharmaceutical company, which is considered a person, is having to fight the same companies in both federal court and patent court to protect its patents?

Earlier this year Allergan reached a settlement with another generic pharmaceutical, extending the protection of its patent until 2024. In an attempt to protect its patents from litigation on multiple fronts for the next 7 years by another round of generic pharmaceutical companies, Allergan has decided to assign its patent rights to the Saint Regis Mohawk Tribe of Upstate New York. The Saint Regis Mohawk Tribe will in return license the patent back to Allergan for about 15 million dollars annually. The legal counsel for the tribe said that the new funding source will help bring much needed resources to the tribe.

Tribal Sovereign Immunity is a doctrine that states that Indian tribes are immune from judicial proceedings without their consent or Congressional waiver. In a recent Supreme Court Case, Michigan v. Bay Mills Indian Community, the Court reaffirmed the doctrine tribal sovereign immunity. The decision upholds Indian sovereign immunity against lawsuits brought by state governments, reaffirming that the Congress, not the court, can decide when Tribes can be brought to court.

Tribal Sovereignty has been instrumental in the establishment in many of deals that have lead many tribes to establish gaming enterprises. It has been reported that the gaming industry has helped Indian tribes decrease unemployment from 70% to 13%. The gaming industry and now pharmaceutical licensing could potentially help tribes “[break] debilitating economic dependence on federal spending programs and replenishing the social and cultural fabric that can support vibrant and healthy
communities and families.”

Pharmaceutical companies could potentially benefit, depending on the regulatory response from the tribe’s sovereign immunity by allowing them to avoid unfair and unnecessary disputes at the Patent Trial and Appeal Board (PTAB) and elsewhere in the federal courts. The current system allows for competitors to challenge patent validity before a panel at the PTAB and before a judge in federal circuit court. The chief executive, Brent Saunders, at Allergan calls the process double jeopardy for having to fight the same issue in two different venues. I would be inclined to agree if these were criminal suits, since both are civil suits, I believe that this violation is protected by Res judicata. Res judicata protects a defendant from having the same matter raised again, either in the same court or in a different court once the matter has been determined. Once the Texas federal court has handed down its decision, if there isn’t an appeal, Allergan should raise the issue of Res judicata in relation to the pending case at the PTAB. The supreme court has granted certiorari in Oil States vs. Greene’s Energy Group, et al, to determine whether the PTAB is unconstitutional by not allowing defendants trial by jury.

Ironically, the spokeswoman for Teva Pharmaceuticals, Denise Bradley, argues that the licensing patents from tribes will delay access to high-quality and affordable generic alternatives. I believe that allowing for lawsuits in multiple venues over the same issue will drive cost more than anything. These lawsuits are not cheap for a pharmaceutical company, who is already trying to see a return on its investment. Pharmaceutical companies, like Allergan, spend millions in research and development of new therapeutics to help improve global health. Generic pharmaceutical companies are not required to conduct these intensive studies to bypass regulatory approval. Generic pharmaceuticals make their profits off of the investment of other pharmaceutical companies’ research and development of therapeutics. If the Supreme Court wants to continue to support globe health, it should prevent pharmaceutical companies from being hailed into federal court and the PTAB for the same issue. If pharmaceutical companies and medical device companies are forced to fight on multiple fronts for the same issue, we will see an increase in drug prices or a decrease in innovation in the health industry.

Leave a Reply

Your email address will not be published.