Status of Reverse Payment Cases against Pharmaceutical Companies

Summary of antitrust issues

Reverse payment cases arise in the context of settlement agreements between brand drug pharmaceutical companies and generic-drug manufacturers to resolve patent litigation under the Hatch-Waxman Act (Hatch-Waxman or the Act). Patent litigation under Hatch-Waxman is the product of the Act’s effort to encourage drug innovation by brand-drug pharmaceutical companies and other innovators while expediting the entry of generic drugs into the market.

Under the Act, no prescription drug can be marketed in the United States without approval from the US Food and Drug Administration (FDA). Generic-drug manufacturers looking to enter the market seek FDA approval of their generic drug through an abbreviated new drug application (ANDA), through which the applicant must demonstrate that the generic drug contains the same active ingredients as, and is bioequivalent to, a brand drug listed in the Approved Drug Products with Therapeutic