Digital Commons Network^™

Pay-To-Delay Settlements: The Circuit-Splitting Headache Plaguing Big Pharma, Shannon U. Han

Vanderbilt Journal of Entertainment & Technology Law

At its passage, the Hatch-Waxman Act was hailed as a much-needed step in making generic drugs more readily available to consumers, easing some of the heavy burdens placed on consumers by the necessary, but flawed, patent system that essentially granted brand-name pharmaceutical manufacturers a de facto economic monopoly over their drugs. One consequence of the Act, unforeseen by legislators and regulators, was the creation of a perverse incentive on behalf of pharmaceutical patent holders to pay alleged patent infringers substantial cash payments to delay entry into the particular drug market. These pay-to-delay settlements--or reverse-payment settlements--have been at the center of …