An Antitrust Analysis on Reverse Payment Settlements

• Main Author: 張育菁
• Other Authors: 林廷機
• Format: Others
• Language: en_US
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/34009402337753772525

碩士 === 逢甲大學 === 財經法律研究所 === 102 === Reverse payment settlements in the pharmaceutical industry is an unforeseen consequence under the Hatch Waxman Act enacted in 1984, for the purpose of increasing innovation and accelerating the entry of generic drugs. Despite the underlying intent, the act created wrongful incentives for parties to settle their disputes, with the brand name firms paying off its generic competitors to delay its entry into the market. By sharing its monopoly profits with the generics, the brand name firms retain its monopoly position and effectively delays competition, and thus raise the attention of the FTC concerning its anticompetitive effects. A proper review of reverse payment settlement involves careful balance between patent and antitrust law. The US Circuit Courts were split on determining the legality of reverse payment settlements, and three different analysis were applied, including the scope of patent, the quick look analysis and the per se rule. This thesis analyzes each of the analysis and argues that the Supreme Court’s most recent decision of applying the rule of reason is the optimal approach for reverse payment settlements as it properly balances patent rights with adequate antitrust scrutiny. However, the court’s decision fails to provide a clear structured test for the lower courts to apply, leaving open questions to be determined. Therefore this thesis proposed relevant factors for courts to take into consideration when reviewing such issue. Further, glancing in the situation in EU, this thesis finds the possibility of establishing a coherent approach among the two systems and suggests the possibility of such concerns in Taiwan.