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ARLINGTON, Va. — The National Association of Chain Drug Stores spotlighted the impact of generic drugs on the pharmacy industry and health care sector overall as the landmark Hatch-Waxman Act marks its 30th anniversary.
NACDS said Wednesday that the historic legislation, which expedited and streamlined approvals of generic drugs and patent litigation involving generics, began an evolution in providing patients with access to affordable medications.
"We laud the efforts of lawmakers such as Sen. Orrin Hatch (R., Utah) and Rep. Henry Waxman (D., Calif.) for their forward-thinking leadership in opening the door to make generic drugs more affordable and accessible for patients," NACDS president and chief executive officer Steve Anderson said in a statement. "As the landscape of the health care system has transformed in the last 30 years, generic drugs have long surpassed the expected impact of how they would be utilized by patients."
Formally known as the Drug Price Competition and Patent Term Restoration Act of 1984, the Hatch-Waxman Act is widely seen as laying the foundation for today’s generic drug industry. Before its adoption, there was no streamlined Food and Drug Administration approval process for generics. Like their brand-name drug counterparts, generics makers had to conduct costly, time-consuming clinical trials to gain FDA approval for their medications. What’s more, the unlicensed investigation and testing of a patented drug by to gain approval for a generic version subjected generics manufacturers to patent infringement liability.
The Hatch-Waxman Act, however, established that makers of generic drugs no longer needed to prove the safety and efficacy of their products. Instead, they need only to submit an Abbreviated New Drug Application (ANDA) to prove their product’s bioequivalence to the original branded drug — less costly process. The act also granted a 180-day period of exclusivity to the first drug to file an ANDA, or the first group of drugs. In addition, the law established that ANDAs can only be filed when a branded drug’s patent has expired, and generics can’t enter the market until the branded patent has lapsed.
Since Hatch-Waxman’s inception, generics have grown to dominate the market. In 2013, 86% of drugs dispensed were generics, compared with 18% before the legislation.
This has enabled Americans to realize substantial savings on prescription drugs, NACDS noted. The association said that when Hatch-Waxman was enacted, it was projected that the legislation could save Americans $1 billion. Yet over the past 10 years, generics have saved the U.S. health care system almost $1.5 trillion, including $239 billion in 2013 alone, which represented a 14% gain in savings from 2012, according to the 2014 Generic Drug Savings in the U.S. report by the IMS Institute for Healthcare Informatics.
"Chain pharmacy is committed to helping patients obtain cost-effective health care. Looking ahead to the next 30 years, we need to continue to find ways to make prescription drugs more affordable for patients," Anderson stated.
NACDS noted that it has promoted policies to ease patient access to cost-effective medications, more recently in the area of biologic drugs. The association said that patients need greater access to the generic versions of expensive biologic drugs, and pharmacists in all states must be able to substitute approved, interchangeable biosimilar medications.
Under legislation enacted in 2010, a drug approval process was created so the FDA could approve generic versions of biologic drugs, known as biosimilars, to provide patients with more affordable options for these medications. NACDS said it continues to work with FDA on the adoption of policies that will facilitate greater access to biosimilar medications.
State generic substitution laws were enacted decades ago, well before the approval pathway for biosimilars was conceived, and the language in these laws doesn’t recognize or accommodate the substitution of interchangeable biosimilars, NACDS added. The association stressed that this must be remedied so pharmacists can substitute interchangeable biosimilars consistent with existing substitution practices for other generic drugs, in turn continuing help patients and payers rein in prescription drug costs and save on overall health care spending.
"We look forward to working with our industry partners like the Generic Pharmaceutical Association (GPhA) and others, as well as the lawmakers and policy makers, to continue building on the success of the Hatch-Waxman Act in providing affordable access to generic medications for patients," Anderson added.
