Branded drugs face generic entry by rival drugs that typically take 80% of sales away from the branded drug within three years. This loss occurs because generic drugs are much cheaper than branded drugs, and most insurance companies won’t pay for a branded drug if a generic is available. But in one instance, the branded-drug maker sued the generic entrant for violating its patent. In the settlement negotiations that ensued, the branded-drug maker offered to pay the generic entrant $10 million to settle the patent dispute by staying out of the industry. Why would the branded drug offer to pay the generic drug to stay out of the industry?