Hatch Waxman Act

The Hatch-Waxman Act, more formally known as the Drug Price Competition and Patent Term Restoration Act, encourages the manufacture of generic drugs in the United States. It established the modern system of generic drug regulation in the US, and made it easier for generic drug companies to make Abbreviated New Drug Applications (ANDAs).

The Hatch Waxman Act’s period of FDA regulatory inclusivity allows a drug research company the exclusive right to produce and market a new drug for a specific period of time (usually five years). During this time, no generics are allowed to come to market.

Patent exclusivity is typically five years for a new drug marketed in the United States. Drug makers can potentially access a patent extension term of another five years, potentially extending the term of their patent to a total of 10 years. Of course, during that time, no generic drugs could be brought to market and the patent holder could potentially make billions of dollars on a profitable drug.