Allergan Seeks to Preserve a Drug Patent

Here's a novel idea for protecting your drug patent: sign it over to a Native American tribe. Allergan is trying to do just that with its blockbuster drug Restasis, according to a news release from the company.

According to the news release, Allergan has transferred its patents for Restasis to a Native American tribe in New York. The deal stipulates that Allergan will pay the tribe royalties of about $15 million a year in exchange for exclusive rights to the patents. For its part, the tribe will argue to the United States Patent Trademark Office that they have sovereign immunity, and hence the patent cannot be challenged by the U.S. government.

The move, if it works, would shake up the drug industry and perhaps give Native American tribes a significant new source of revenue. But make no mistake; it'll be the drug companies that will be the big winners. Restasis had sales of more than $330 million in just the past three months.