Events

The Hatch-Waxman Act established the modern regime for competition between brand name and generic drugs. We examine a feature of the Act that has caused significant controversy, but has received little systematic attention. Paragraph IV challenges are a mechanism for generic drug makers to challenge the patents of brand-name drug makers, with a view to securing early market entry. On the one hand, these challenges are viewed as the only way to challenge patents of questionable validity, which, according to critics of the pharmaceutical industry, are increasingly asserted by brand-name drug makers. On the other hand, other commentators suggest these challenges reduce effective patent life and thereby blunt incentives for drug innovation. There is also widespread concern that certain settlements from litigation that results from these challenges, in which brand-name firms pay generic challengers to stay off the market, may be anticompetitive, and harmful to consumers. Our project aims to improve understanding of the determinants of Paragraph Four challenges, their impact, and the outcome of litigation that results from these challenges. The insights from this study will provide a fresh perspective on whether the current regime needs amendment, whether it should be extended to other arenas, and whether the U.S. regime should be emulated in other nations. This study also helps illuminate how the complex interaction of a range of policies and institutions shapes patterns of innovation and competition in the U.S. pharmaceutical industry. (In the seminar, we will present and overview of the project plan and goals, and preliminary results.)