The Gaming of Pharmaceutical Patents

Paragraph IV of the Hatch-Waxman Act provides a mechanism for the litigation of pharmaceutical patent infringement disputes. Many of these cases have been settled with reverse payments by the brand to the generic in return for delayed generic product entry. The Federal Trade Commission (FTC) has contested several of these settlements with good but not complete success. This paper discusses the merits of treating settlements that include side payments or deals that are beneficial to the generic as illegal per se. The paper also describes several additional strategies in addition to side payments, some of which raise serious antitrust problems, that brands have used to keep generics out of the market.