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Generic Drug Regulation in the US Under the Hatch-Waxman Act

A Balance Between Competition and Innovation or Confusion and Intrigue?

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Pharmaceutical Development and Regulation

Abstract

Generic drugs are bioequivalent copies of original drugs patented by brand-name companies. The regulation of generic drugs in the US has paralleled that of brand-name drugs. They were first allowed under US regulations in 1938 upon the initiation of the ‘modern era’ of drug regulation with the enactment of the Federal Food, Drug and Cosmetic Act (FDCA). As with brand-name drugs, regulation of generics underwent significant change in the wake of the 1962 amendments to the FDCA, particularly with the passage of the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act.

This act required the US FDA to establish an abbreviated new drug approval procedure for generic drugs, including a means of evaluating the bioequivalence of generic drugs to that of pioneer drugs, as well as a mechanism for identifying approved pioneer drugs and challenging their patents. The administrative tool developed to assist this process was a listing of approved drugs, patents, and equivalence ratings, commonly called the ‘Orange Book.’ In the aftermath of the Hatch-Waxman Act, the generic drug industry experienced considerable ‘growing pains’: a bribery scandal, disenfranchisement by FDA regulatory reform, persistence of barriers to generic entry, continuing problems with establishing equivalence to pioneer drugs, and lack of congressional support. Recently, as a result of increasing public pressure to address the rising costs of healthcare, the problems of generic drug makers, such as patent listing abuses and the lack of a regulatory review process for biogenerics, have received attention from both the legislative and executive branches of the US government. The FDA issued a proposed rule to close some of the loopholes in the Hatch-Waxman Act in late 2002, while the congressional tussle over various legislative proposals to promote generics has begun anew with the initiation of the 108th Congress. While these activities will determine some near-term outcomes for the generic drug industry, the industries’ long-term prospects will depend on whether it continues to benefit the healthcare system by providing low-cost competition to brand-name products without decimating the brand-name industry’s economic incentive to provide innovative new medicines.

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  1. Tufts Center for the Study of Drug Development, Tufts University, 192 South Street, Suite 550, Boston, Massachusetts, 02111, USA

    Christopher-Paul Milne & Catherine Cairns

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  1. Christopher-Paul Milne
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  2. Catherine Cairns
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Correspondence to Christopher-Paul Milne.

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Milne, CP., Cairns, C. Generic Drug Regulation in the US Under the Hatch-Waxman Act. Pharm Dev Regul 1, 11–27 (2003). https://doi.org/10.1007/BF03257362

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