Senators blast Allergan's tribal deal, social contract as 'hypocrisy'

Sen. Sherrod Brown was among a group of lawmakers who wrote to Allergan CEO Brent Saunders requesting more info about the company's tribal licensing deal. (U.S. Air Force photo by Master Sgt. Bob Barko Jr.)

Allergan already faces a tidal wave of backlash into its Restasis patent transfer to the Saint Regis Mohawk Tribe, but now five more Democratic senators are piling on. In a letter to Allergan CEO Brent Saunders, the lawmakers blasted the arrangement and requested more info.

Writing to Saunders, the lawmakers said the company's "unprecedented" patent transfer to the tribe—inked in order to protect Restasis from an inter partes review at the U.S. Patent and Trademark Office—highlights the drugmaker’s “commitment, or lack thereof, to its 'social contract,'" in which it pledged to hold down price increases on its products. 

Sens. Sherrod Brown, Patty Murray, Amy Klobuchar, Al Franken and Maggie Hassan wrote that they appreciate the sovereign immunity concept that the deal sought to employ. However, they believe it's tough to picture the company’s arrangement as “anything other than a sham to subvert the existing intellectual property system.”

RELATED: With new bill, Sen. McCaskill looks to end 'brazen' tribal licensing strategy Allergan started

"The hypocrisy of promising to increase access and to not substantially raise drug prices while creating and exploiting loopholes to thwart competition renders meaningless the entire 'social contract,'" they wrote.

Allergan inked its controversial tribal licensing deal back in September, agreeing to transfer Restasis patents and license them back for $13.75 million up front and up to $15 million per year. Critics have blasted the setup for months, and some in Congress have already started a probe. Sen. Claire McCaskill introduced legislation to stop the “brazen” strategy before it spreads.

Now, the new group of senators would like to know more about the setup. They’re asking whether the company plans to use the strategy again and for details about how the move fits into the company’s “social contract.” Specifically, they asked Saunders to provide the company’s plans for reinvesting revenues into research and helping patients.

RELATED: Allergan CEO Saunders defends Restasis deal by calling for review of patent challenge process 

Allergan’s spokesperson told FiercePharma via email that while the company understands the senators’ “desire for information,” they should instead focus on the “IPR process, which negatively impacts life science innovation by unjustifiably upsetting the balance struck by Hatch-Waxman.”

"Regarding the Social Contract, as the Senators clearly state in their letter one of the main tenets of the Social Contract is a focus on innovation and research to help patients," he wrote. “Allergan is not attempting to artificially extend these patents; we’re seeking to protect our intellectual property from being stripped away unlawfully by an unfair IPR process that exposes our products to double jeopardy."

The company would be happy to sit down with the lawmakers and their staffs to discuss the issues, Allergan's representative added.

RELATED: Allergan executives named in investor suit over alleged generics price fixing

Recent months have been somewhat rough for Allergan since the controversial deal. Even before the IPR decision on its blockbuster eye med—which brought in $1.5 billion last year—the company lost a patent trial in Texas, invalidating key Restasis protections. The company has appealed.

Separately, the drugmaker faces a new lawsuit from shareholders who allege a breach of fiduciary duties relating to an industrywide probe of generic drug price fixing. Allergan offloaded its generics outfit to Teva last year, but the lawsuit includes conduct dating back to 2013.