Reverse payments and generic entry competition

作者：Jiangyun Wan · 发表于：RePEc: Research Papers in Economics · 年份：2016 · 研究领域：Pharmaceutical Economics and Policy、Corporate Finance and Governance、Intellectual Property and Patents

In the United States, brand-name drug manufacturers often pay generic companies to delay marketing of their generic products. In this paper we develop an analytical framework to examine the implications of banning reverse payment settlements. We first find that reverse payment settlements occur when generic firms face relatively high entry cost but do not when entry costs are sufficiently low. We next show cases in which reverse payment settlements are harmful to brands. We also consider the counterfactual case when 180-day marketing exclusivity rights are removed from Hatch-Waxman and find that the absence of marketing exclusivity rights encourages brands to proceed with reverse payment settlements.