“Patently Odd,” by Adam Davidson. The New Yorker, 11/20/2017.
I had written a posting on the woman ophthalmologist in the Restasis commercials, so this article on Restasis caught my eye.
Who holds the patents on Restasis? Answer: The St. Regis Mohawk Reservation in upstate New York (I bet you didn’t see that coming), even though no tribal member had anything to do with the drug’s discovery or development. The drug company that did all of the work, Allergan, gave them the patents and now pays them $15 million per year to lease them back. They did not do this out of charity. They did it to save money in this topsy-tervy world.
In 2012, Congress passed the America Invents Act which streamlined the adjudication of patent challenges. All well and good. Everyone is in favor of streamlining government bureaucracy, except the act was written to exclude sovereign entities, such as foreign countries, states, and Native American nations (which are sovereign and currently hard up for cash because business at their gamboling casinos is down).
A streamlined system would increase patent challenges, which is not what a corporate patent owner wants. They, of course, want any challenge to their patents to drag on as long as possible while they continue to make, and sell, and make money, from the product. With that simple law, a patent held by a sovereign nation (whose patents remain adjudicated under the old, slow process) became four to ten times more valuable than one held by an American corporation.
That’s why it was cost-effective for Allergan to give away the patents and lease them back, even for $15 million a year. (Are you following this shell game? Don’t pay any attention to that man behind the curtain.)
Allergan was facing challenges on Restasis from several generic drug manufacturers, and they wanted to delay these challenges as long as they could.
That was the idea. Last month, a crack appeared in the scheme. A federal judge ruled some of Allergen’s Restasis patents were invalid, and he mentioned that “sovereign immunity should not be treated as a monetizable commodity,” meaning sovereign immunity built into specific laws should not be manipulated to make money.
It remains to be seen if this is a major setback for Allergen or just a bump in the road. There are many other patents that would benefit by sovereign ownership, and all sorts of companies could move their patent portfolios to state universities, who are also sovereign.
To straighten it out would require another act of Congress. Wait and see if that will ever happen. Will corporate contributors to political campaigns get their money’s worth? They always do, I kid you not.