Senate bill looks to block tribal patent deals with pharma

Months after Allergan (NYSE:AGN) struck a controversial patent deal with a Native American tribe in New York, lawmakers are angling to make sure that it can’t happen again.

Sens. Tom Cotton (R-Ar), Claire McCaskill (D-Mo) David Perdue (R-Ga), Joni Ernst (R-Ia) and Pat Toomey (R-Pa) introduced a bill this week that would prevent patent owners from claiming sovereign immunity as a means to shield IP from review by the U.S. Patent and Trademark Office.

In September last year, Allergan inked a deal with the St. Regis Mohawk tribe to transfer the patents for its blockbuster eye drug, Restasis, in an attempt to halt any review by the USPTO. The tribe agreed to license the patents exclusively to the company in exchange for payments.

Both parties have argued that the tribe’s sovereign immunity renders the patents outside of the trademark office’s power of review.

The deal struck a nerve around the pharmaceutical industry and with lawmakers. Mylan (NSDQ:MYL) criticized Allergan for gaming the U.S. patent system, while other companies called Allergan CEO Brent Saunders hypocritical in light of the “social contract” he issued over drug pricing in 2016.

Earlier this year, Allergan said it planned to cut more than 5% of its workforce in a cost-cutting effort as it faces competition from up-coming generics to Restasis.

The company anticipates taking a $125 million hit from the job cuts, the majority of which will be noted in the fourth quarter of the 2017 fiscal year.

The cost savings from its restructuring program should be between $300 – $400 million per year, according to Allergan.

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