Regulating Reverse Payment Agreements in Pharmaceutical Market: A Comprehensive Framework for Antitrust Review

Abstract

Reverse payment settlement agreement is a type of arrangement between original and generic drug manufacturers that could potentially violate Antitrust Laws by limiting competition, typically appear in the pharmaceutical market. This paper addresses the impact of these agreements on public interests, and the challenges in conducting antitrust review on these agreements. This paper then proposes a comprehensive framework for regulating reverse payment agreements in the context of China’s extensive and complex pharmaceutical market by drawing on the experiences of the United States and the European Union. The framework introduces a two-step antitrust review system for regulating patent settlement agreements, which is suggested by the author to be applied in both patent litigation and daily detection. This paper also advocates establishing an agreement filing system and utilizing the antitrust public interest litigation system in antitrust regulation. This proposed framework provides specific guidance on initiation of antitrust review with respect to multiple backgrounds, in order to protect consumer interests in affordable healthcare, deter anti-competitive behavior, and contribute to the theoretical basis for future legislation.