The Federal Trade Commission has become increasingly concerned that pharmaceutical companies owning patents that cover popular and expensive drugs are entering anticompetitive agreements with generic manufacturers who seek to produce generic versions of these drugs.  In settlement agreements between branded- and generic-pharmaceutical firms, the branded-pharmaceutical company may agree to pay the generic manufacturer a sum of money in order to avoid litigation and delay or prevent the marketing of the generic product—agreements known as reverse-payment settlements.

Because the availability of generic substitutes for popular and expensive drugs decreases the cost of health care, the Senate Judiciary Committee has responded to the reverse-payment trend by considering the Preserve Access to Affordable Generics Act.  While reverse-payment settlement agreements have the potential to be anticompetitive and harmful to consumers, this Note aims to demonstrate why the absolute ban on reverse payments introduced in the Senate Judiciary Committee is not the appropriate response.  Namely, this Note addresses the reasons why an absolute ban on reverse payments is inappropriate in the context of pharmaceutical patents and may not improve consumer access to generic products.