Glossary

Hatch-Waxman Act

In 1984, Congress enacted the Hatch-Waxman Act to spur the development of lower-cost generic drugs. The act provided manufacturers of innovative prescription drugs with patent protection and a period of marketing exclusivity, created a generic drug approval process to help companies bring products to the market more quickly once the patent for an original brand-name drug expired, and established procedures for resolving patent disputes arising from applications to market generic drugs. Only 19 percent of prescriptions were filled with generics when Hatch-Waxman was enacted. The generic market share rose to 86 percent in 2013 and accounted for 28 percent of U.S. drug spending.