Turning 40 is a big milestone for most of us. When I turned 40 – I won't tell you how long ago that was – I was knee-deep in Paragraph IV patent litigation and in legal challenges to FDA's exclusivity and approval decisions under the Hatch-Waxman Act. In fact, I once had a client describe Hatch-Waxman as the “full employment for lawyers act”! Although I can't say that he was wrong given that I've spent the bulk of my career focused on issues arising from or related to Hatch-Waxman, it's interesting to look back on Hatch-Waxman's successes and future challenges now that it is turning 40 this year.

The Association of Accessible Medicines ("AAM") recently celebrated Hatch-Waxman's 40th by issuing a white paper and asking: “Is it over the hill? (Or is the Hill over Hatch-Waxman . . .).” The report notes that Hatch-Waxman has been wildly successful in establishing the generic drug approval pathway, resulting in significant cost savings to the U.S. healthcare system of nearly $3 trillion in the last 10 years alone. The Act accomplished this goal through a delicate balancing of the interests of innovator companies to continue to provide incentives for significant investment in R&D while at the same time providing an abbreviated pathway for generic entry.

But the AAM white paper also highlights some challenges and risks to the generic drug industry, including what it describes as “unchecked price deflation” brought about by a hyper-competitive generic drug market in the U.S. In one sense, one can argue that Hatch-Waxman has been too successful in lowering drug prices. And, as the white paper notes, unsustainably low prices for certain generic products have been the cause of some recent drug shortages, which every policymaker wants to avoid.

As Hatch-Waxman turns 40, we should certainly celebrate all of the benefits that it has brought about. But will it stand the test of time and hold up to the challenges of the future?

“As the modern generic and biosimilar drug industry reaches its 40th anniversary, the industry faces unprecedented challenges that call into question the viability of sustainable competition from low-cost medicines.

accessiblemeds.org/...