During the past two or three years pharmaceutical-related litigation has increased dramatically. It also has shifted its focus to Medicaid and Medicare drug reimbursement rates, the introduction of generic drugs when branded drug patents expire, and marketing practices directed at health care organizations.

Much of this litigation began as actions by individual state and local governments or the federal government, most notably an $800 million settlement of a federal action involving a single product. This success has spurred numerous consumer class action suits, coordinated efforts by state attorneys general, litigation by health care organizations, and vigorous litigation support from AARP.

What does the new litigation environment--and its costs--mean for taxpayers and consumers? Is the pharmaceutical industry facing an onslaught similar to the one launched against the tobacco industry in the 1990s? Discussing these issues are AEI resident scholar John E. Calfee and Michael S. Greve, the John G. Searle Scholar and director of the Federalism Project at AEI.