The Anticompetitive Impact of Settlements in the Pharmaceutical Industry: The Need for Revisions to the Drug Price Competition and Patent Restoration Act of 1984

Abstract

This paper will begin by briefly examining the theories behind antitrust law and intellectual property law. Then it will look at the provisions of the Hatch-Waxman Act and at how Congress tried to balance the incentives underlying both of these regimes within those provisions. The paper will continue by looking at the costs and benefits of settlements, particularly patent settlements in the pharmaceutical industry. The paper will then examine three cases filed by the Federal Trade Commission (FTC) challenging patent settlements between pioneer drug companies and generic drug companies. Because of the impact that these types of settlements may have on consumers, numerous proposals for reform of the Hatch-Waxman Act have been made. The paper will conclude by addressing those proposals and offering an analysis as to which proposals are most likely to benefit consumers in the long run.