The Hatch-Waxman Act encourages competition between brand-name and generic drug companies by creating a faster approval process for generic drugs. It also extends patent protection for branded drugs. The act has been successful in bringing more affordable generic drugs to market.
The Hatch-Waxman Act, formally called the Drug Price Competition and Patent Term Restoration Act of 1984, was enacted to encourage competition between brand-name and generic drug companies. It achieved this by creating a faster approval process for generic drugs, called the Abbreviated New Drug Application (ANDA). At the same time, it has made efforts to protect branded pharmaceutical products by extending their patent protection. Overall, the act has been successful in bringing more generic drugs to market.
A generic drug is quite similar to, if not exactly the same as, a brand name drug. It should be equivalent in dosage, intended use, form of administration, quality and performance. Generic drugs can be produced by anyone after the patent on the brand name drug expires. They are often sought after because they are more affordable.
One way the Hatch-Waxman Act affects the process of bringing generic drugs to market is through the ANDA process. The app provides the FDA with all the information it needs to review and approve a generic drug. It must prove that the generic is the bioequivalent of the brand-name drug, which means that it works the same way as the brand-name drug and has the same active ingredients.
The application is said to be shortened because, unlike non-generic drugs, the generic does not have to be tested on animals or humans. That test has already been completed for the branded version. The application has significantly shortened the lead time for manufacturing generics. Before the law became law, it typically took two to three years for a generic to hit the market after a drug’s patent expired. After the deed, this time was reduced to several months.
Another component of the Hatch-Waxman Act was extending the term of patent protection for brand name drugs. As the legislation encouraged the production and consumption of generics, there was a possibility that manufacturers of branded drugs would be threatened by competition from generics. As a protective measure for branded drug companies, procedures have been set up for companies to extend a patent on a drug for another five years. Before the law, most drug patents lasted about nine years, while now they last on average 11-12 years.
Since the passage of the Hatch-Waxman Act in 1984, the number of generic drugs on the market has increased significantly. Before the law, only 35% of drugs that were no longer protected by patents had generic equivalents, and even when they were available, generic drugs were often not purchased. Today most of the major drugs that are no longer protected by patents have generic equivalents and are widely consumed.
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