This article is pending publishing in the Annals of Health Law.
In recent years, the FTC has been closely scrutinizing patent settlements between branded and generic manufacturers involving “reverse payments” from branded manufacturers to generic manufacturers. The FTC has been concerned that such settlements harm consumers by delaying the entry of lower-priced generic drugs. In this paper, Bret Dickey, Jon Orszag and Laura Tyson present an analytical framework for evaluating the competitive effects of patent settlements, including those involving reverse payments, and demonstrate that these settlements can benefit consumers. Thus, the authors conclude that while continued scrutiny of such settlements is important, broad brush treatments are inappropriate and only a more individualized evaluation can correctly evaluate the competitive effects of a particular settlement agreement.