Allergan's controversial deal with the Saint Regis Mohawk tribe giving the group the patent rights to one of its key drugs was widely misunderstood, Allergan CEO Brent Saunders told CNBC.
"I think there's a lot of misunderstanding on why we did it," Saunders told "Mad Money" host Jim Cramer in a Wednesday interview. "It wasn't desperation, it was tenacity."
In exchange for the patents for Allergan's eye drug, Restasis, and $13.75 million (plus potentially $15 million in annual royalties), the tribe granted Allergan an exclusive license to sell the drug.
The deal involving the billion-dollar drug drew widespread criticism, raising concerns that Allergan could now raise the price of Restasis while keeping it under patent protection.
A group of hospitals, health insurers and other drugmakers flagged the deal to Congress, asking lawmakers to review it. But Saunders said that it was simply how the pharmaceutical industry works.
"I believe that the biopharmaceutical industry is grounded in one thing, and that's intellectual property protection. That's why we invest billions of dollars coming up with cures and treatments because we get a very short period that's protected by patents to sell those drugs," the CEO said.
On the other hand, Saunders acknowledged big pharma's duty to patients and consumers.
"The flip side of that is I have a social contract that says when we are successful, we'll price it responsibly and we'll make them accessible to those people who can't afford them," he told Cramer. "And I think people got confused that said because I believe in strong intellectual property, I don't believe in making medicines affordable and accessible, and one has nothing to do with the other."
While Wall Street has turned sour on Allergan lately, Saunders said that leading the company past patent cliffs like this one is just part of the job.
"Look, we are tenacious. We believe in protecting our shareholders. We believe in protecting our employees and we believe in protecting our medicines, which means our patients," the CEO said.
Watch Brent Saunders' full interview here:
Disclosure: Cramer's charitable trust owns shares of Allergan.