HATCH-WAXMAN WORKS

DON'T MESS WITH SUCCESS

In 1984, the U.S. Congress fairly balanced all the interests of the pharmaceutical industry by passing the Drug Price Competition and Patent Term Restoration Act of 1984 ("Hatch-Waxman" or "Act"). This law created a framework for patent term extensions and non-patent exclusivity periods for brand name drug products and a system for speeding Food and Drug Administration (FDA) approval of generic drug products. As a result of the Act, brand name drug companies' profits and research and development expenditures have grown exponentially, new life-saving medicines have become available to patients, American consumers and taxpayers have saved billions of dollars, and the generic drug industry has grown, creating new jobs and investment opportunities in every region of the country.

Although brand name drug companies have enjoyed tremendous financial success over the past 15 years, they are now asking Congress for longer patent terms and longer market exclusivity for their products. This is a remarkable request in light of recent Congressional acts which have resulted in further patent extensions and additional exclusivity periods for brand name pharmaceuticals. For example, the Congressional implementation of the General Agreement on Trade and Tariffs (GATT) extended pharmaceutical patents 14 months on average. The recently enacted FDA reform legislation subjects antibiotics for the first time to the Hatch-Waxman exclusivity and related provisions, while granting brand name firms an extra six months of exclusivity for performing pediatric dosing studies. The net result of these Congressional actions has been to delay market entry of safe, effective, and competitive generic drug products. Meanwhile, the mean approval time for new drug applications (NDAs) has been cut almost in half since 1992, resulting in brand name drug companies getting their products to the competition-free market place quicker.

Any further changes to Hatch-Waxman will cost the American consumer as well as federal, state, and local governments billions of dollars every year. Thus, these anti-competitive amendments to prolong monopolies should be rejected.

The National Association of Pharmaceutical Manufacturers (NAPM) is the leading national trade association representing generic drug manufacturers, and the suppliers of bulk active drug substances and related services to this important industry.

For additional information, please contact John Bode, Marshall Matz, David Weeda, or Karen Reis at (202) 789-1212.