Antitrust scholars and agencies have recognized the anticompetitive impact of reverse payment settlements—in which branded and generic drug companies settle patent disputes, typically by delaying the entry of generics into the market. Despite clear competition concerns, these settlements are typically subject to a rule of reason analysis that puts the burden on enforcers and plaintiffs to prove their anticompetitive harms. Recent California legislation—AB 824—shifts the burden to the settling drug companies to prove their arrangement is not anticompetitive. AB 824 presents an opportunity for advocates of lower drug costs but still faces hurdles and shortfalls. This Note examines the efficacy of the legislation, the likelihood of it surviving pending constitutional challenges, and how it fits into broader efforts at lowering drug costs for consumers.
Kevin Wallentine, Shifting the Burden On Pay-For-Delay Challenges: Analyzing AB 824’s Effects On Reverse Payment Settlements and Drug Costs, 54 Loy. L.A. L. Rev. 367 (2020).