40 Years of Hatch-Waxman: How Can We Secure its Legacy?

Today, the Drug Price Competition and Patent Restoration Act—better known as the Hatch-Waxman Act—celebrates its 40th anniversary, marking four decades of success in fueling biopharmaceutical innovation while growing the U.S. generic market into the powerhouse it is today. So far, we’ve explored the bill’s origins, key provisions and its positive impact for patients. However, to celebrate the day of its signing, we must turn our attention to how its legacy can be secured.

In 2010, lawmakers took the first step in cementing Hatch-Waxman’s legacy of helping patients by expanding the success of the framework for generic drugs to biologics and biosimilars.

Taking key elements of Hatch-Waxman’s blueprint, the Biologics Price Competition and Innovation Act helped generate biopharmaceutical innovation and additional competition in the market for biologics. Together, Hatch-Waxman and the Biologics Price Competition and Innovation Act have helped save American patients $2.9 trillion in just a ten-year span.

Unfortunately, while these policies have succeeded in growing the number of generics and biosimilars, far too often patients don’t benefit from these lower-cost options. That’s because middlemen like pharmacy benefit mangers (PBMs) and insurers deny coverage of generics and biosimilars that could save patients money in favor of drugs with a higher list price. This tactic generates more profits for middlemen at the expense of patients.

PBMs and insurers get paid rebates and fees based on the list price of a medicine—meaning they can make more money by steering patients to medicines with higher list prices. Analyses show these misaligned incentives drive PBMs and their affiliated pharmacies to slow the adoption of low-cost generics and biosimilars. As a result, there’s growing bipartisan support for reforming the PBM industry to put an end to these abusive practices.

Hatch-Waxman has been a resounding success for growing the U.S. generics market and patient access. Now, as we commemorate the 40th anniversary of Hatch-Waxman, there has never been a better time for Congress to act to support the continued success of this framework. This can be accomplished both by ensuring patients can save money at the pharmacy and access low-cost generic as well as biosimilars and by continuing to support and uphold America’s IP system, which delivers innovative medicines for patients. To honor the legacy of Hatch-Waxman, Congress must maintain the balanced IP system that the legislation has supported for decades.