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Revised 26 January 2004.

Abstract

The Hatch–Waxman Act produced the unintended consequence of allowing brand name and generic drug companies to agree, in exchange for substantial payments, for the generic drug companies to drop their patent challenges and not to bring their generic versions to market. This paper summarises three recent court decisions. In each case, the plaintiffs were the purchasers of the generic drugs — both consumers and insurance companies. They challenged the drug companies' agreements not to compete, claiming antitrust violations. The drug companies defended the agreements as legal uses of their patent monopolies. Each court analysed the agreement differently, demonstrating the novel and complex issues that these cases raise.