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Open Access. Powered by Scholars. Published by Universities.®

2013

Health Law and Policy

Texas A&M University School of Law

R&D

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Full-Text Articles in Law

Reverse Payments, Perverse Incentives, Murat C. Mungan Oct 2013

Reverse Payments, Perverse Incentives, Murat C. Mungan

Faculty Scholarship

Issuing and enforcing prescription drug patents requires courts and legislatures to strike a delicate balance. A patent gives drug manufacturers a legal, if temporary, monopoly on sales of a drug; this encourages manufacturers to engage in costly research and development of new medicines. But not all patents issued by the Patent Office are ultimately deemed valid – generic drug manufacturers can infringe the patent, and, when sued, attack its validity in court on a variety of grounds, including obviousness. In recent years, patent holders have begun to settle these suits (which they initiated) by paying the alleged infringer. Not surprisingly, …