Hatch-Waxman Act is not so Generic

If you're a regular reader (hi, mom and dad!) you probably no doubt know that I love talking tech, but I haven't posted much about law--one of my other favorite topics--until my last post about patents. Today I thought I would briefly explain what is informally known as the "Hatch-Waxman Act." It's proper name is The Drug Price Competition and Patent Term Restoration Act (Public Law 98-417). Ugh, right? LOTS of words...Ok, no fear. Let's break this baby down into easily understood parts.

First, a little background on this law. It was passed in September of 1984 so it's been around for a while. Second, it is named after the two U.S. Congressmen (Hatch and Waxman) that sponsored the Act. President Rondald Reagan officially signed the Act into law on September 24, 1984. So why sign this thing into law? Well, until this Act, legislators noticed that brand-name prescription drugs were really expensive. Take Lipitor for example. Lipitor is among a group of CoA reductase inhibitors, or "statins." Simply put, this means that Lipitor reduces levels of "bad" cholesterol. Lipitor was made by the company Phizer. Phizer applied for and received a patent on Lipitor. A patent does NOT guarantee that Phizer can make, use, or sell Lipitor, though. "Huh?" You say. Yes, I know, it seems kind of weird but stay with me here. You've probably always thought that patents allow you to do something, but in reality, patents are negative rights. This means that Phizer's patent on Lipitor EXCLUDES OTHERS from making, using, selling, importing, etc. this particular drug. So how does this concept this relate to Hatch-Waxman? Well, like I said, brand-name drugs like Lipitor are super pricey. To combat this and bring the price of these drugs down, Congress decided that generic drug makers could apply for certain certifications to manufacture competing drugs and thus drive prices down. The only thing that generic drug makers had to do was prove "bioequivalence" around the time that the brand-name patent was about to expire.

Ok, so what is bioequivalence? Well remember that generics must still pass the strict regulations set forth by the FDA. So essentially, generic drug makers have to prove that their drug works the same way and in the same amount of time as the brand-name drug. Generic drug makers can apply with the FDA before the brand-name drug makers' patents expire in order to receive the green light to make a generic and NOT violate the brand-name patent terms. Remember that a patent lasts for 20 years from the date of filing the initial patent application.

This is just a brief, very basic synopsis of Hatch-Waxman. In no way is this legal advice. If you need legal advice, seek the help of an attorney.