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Market Watch: Rep. Peter Welch on Allergan's 'Bold, Brazen, Bizarre' Patent Deal with an American Indian Tribe

October 10, 2017
In The News

Rep. Peter Welch (D-Vt.) is not mincing words when it comes to Allergan Inc.’s deal with an American Indian tribe geared toward protecting one of the company’s top products.

“I was astonished at the creativity in craft manipulation to extend the patent,” Welch told MarketWatch on Thursday, adding, “they would only do that if they felt a kind of arrogant confidence that they can continue to get away with murder.”

Allergan’s AGN, +1.09%  agreement with the New York state-based St. Regis Mohawk Tribe, under which Allergan sold the patents on dry eye medication Restasis to the tribe in order to dismiss challenges made through the U.S. Patent and Trade Office’s inter partes review process, was announced in September.

Since then, the deal has been widely criticized and invited lawmaker scrutiny. A bipartisan House Oversight committee letter was sent this week—Welch was one of the four signatories—requesting more information about the deal. And Sen. Claire McCaskill (D-Mo.), who has said the move “should be illegal,” said on Thursday that she has drafted a bill in response.

Drug prices are a key issue for Welch, who met with President Donald Trump and colleague Rep. Elijah Cummings (D-Md.) in March to discuss drug prices and, again with Cummings, sent a letter about prices to manufacturers of multiple sclerosis drugs this summer.

Even before Hurricanes Harvey, Irma and Maria and the deadliest mass shooting in modern U.S. history in Las Vegas on Sunday, drug prices seemed to have fallen off the White House’s agenda.

But Welch is still hopeful, he said on Thursday, describing prescription drug costs as one of the larger problems facing the U.S., given the spiraling cost of health care.

Welch described Allergan’s patent deal as alternately “bold,” “brazen” and “bizarre.”

“Congress has a policy by law that extends market protection for a period of time for a new drug, and I’m supportive of that. It allows drug company to recoup their investment costs and make a profit,” he said. “But when companies that have been given this legal protection try to extend it for pretty flimsy reasons, it really comes at the expense of consumers and taxpayers.”

“If legislation is necessary to stop this, I would support legislation,” Welch said. Welch is looking at McCaskill’s legislation closely and his office expects he will introduce it in the House next week, according to a spokeswoman.

Allergan said in a Friday statement that the company disagrees with Welch, adding that the deal does not fully shield Restasis from patent litigation.

Lawmakers should instead focus on the inter partes review (IPR) process, the company said, referring to another channel by which patents can be challenged and one that many drugmakers have criticized.

Allergan has “repeatedly” said it is concerned about the IPR process, the company said, since the process undermines the “delicate balance” of the Hatch-Waxman generic law, is implemented through the “not-impartial” Patent and Trademark Office and “creates an unnecessary and unfair burden on innovators of branded medicines by opening up patents to parallel and often inconsistently adjudicated challenges before both federal courts and the Patent Trial and Appeal Board.”

But Welch said the request was “just changing the topic,” adding, “that has nothing to do with scheming to extend the life of the patent.”

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