A novel attempt by a drugmaker to protect market exclusivity on its drug by transferring the patents to a Native American tribe has officially failed.

On Monday, the Supreme Court denied a petition by Dublin-headquartered Allergan to appeal their case, which the company and the Saint Regis Mohawk Tribe of New York filed in December after the US Court of Appeals for the Federal Circuit ruled against them. In September 2017, Allergan transferred the patents covering the dry-eye drug Restasis (cyclosorine) to the Mohawk and then licensed them back from the tribe in exchange for an upfront payment and royalties. The thinking was that tribal sovereignty would allow the Mohawk to invoke sovereign immunity to petition the Patent Trial and Review Board to dismiss an Inter Partes Review challenging the patents that was filed by generic drugmakers Mylan and Akorn.

However, the PTAB denied the tribe’s motion to dismiss the IPR, and the Federal Circuit court upheld the decision. The court agreed with the generic drugmakers’ view that a federally recognized Native American Tribe that owned a patent could not assert sovereign immunity because the proceeding bore more similarity to an agency enforcement action than a civil suit by a private party.

With an upfront payment of $13.75 million and royalties of up to $15 million, the deal was seen at the time as a potentially valuable source of revenue for the tribe. Indeed, in September 2017, BioPharm Insight reported that if the deal were to succeed, it could also lead other Native American tribes to pursue similar arrangements as a source of revenue.

“We realize that we cannot depend solely on casino revenues and, in order for us to be self-reliant, we must enter into diverse business sectors to address the chronically unmet needs of the Akwesasne community, such as housing, employment, education, healthcare, cultural and language preservation,” read a statement from the tribe at the time of the deal. Akwesasne is a traditional name for the territory of the Saint Regis Mohawk Tribe and is coterminous with the reservation and a corresponding reserve in Canada.

Photo: Allergan