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The Hatch-Waxman Act

Changing the playing field for branded and generic drugs.

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In 1984 the pharmaceutical field for generic drugs altered substantially.

This was the year when the bill, now known as the Hatch-Waxman Act, proposed by Senators Orrin Hatch and Henry A. Waxman was approved, making it easier for generic drugs to enter the market.

Since then, the number of generic drugs available to consumers has increased exponentially. Branded drugs typically lose more than 40% of their market share to their generic counterparts.

Before the Hatch-Waxman Act was approved, only about 35% of brand name drugs had to content with a generic competitor; nowadays nearly all drugs are faced with generic copycats.

The Hatch-Waxman bill (known officially as the Drug Price Competition and Patent Term Restoration Act) brought the following changes:

1. Generic drugs no longer needed to prove their safety and efficacy. Under the bill, generic drug manufacturers need only submit an Abbreviated New Drug Application (ANDA) to prove their product’s bioequivalence to the original branded drug. This is a cheaper process for manufacturers.

2. Generic drugs are granted a 180-day period of exclusivity. Either the first drug to file an ANDA, or the first group of drugs, is granted this period.

3. Manufacturers filing ANDAs can only do so for drugs that have not been patented.

4. ANDAs can only be filed when a branded drug’s patent has expired.

5. Generic drugs cannot go on to the market until the branded patent has expired.

6. Branded drug patents must not have been infringed or proven invalid. (If a patent is shown to be invalid, the FDA must wait 30 months until it approves a generic.)

7. Because branded drugs lose so much of their revenue when generic drugs are introduced, the Act provides them with patent extensions options, which now average about three years.

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