The Drug Price Competition and Patent Term Restoration Act, more commonly known as the Hatch-Waxman Act, profoundly changed the prescription drug landscape. Congress enacted the law in 1984 to create a path to bring generic medicines more easily to market while continuing to incentivize biopharmaceutical innovation.
Forty years later, We Work For Health organized an event on Capitol Hill to recognize the landmark bipartisan achievement. Leading policymakers and policy influencers gathered for a panel discussion to learn more about the law from distinguished speakers; acknowledge the enduring impact of the late Sen. Orrin Hatch and former Rep. Henry Waxman; and to advocate for present day measures to promote and protect patents, innovation and the generic timeline as the Hatch-Waxman Act intended.
Below are key points and takeaways from each of the event speakers.
Fred Upton, Retired House Energy and Commerce Committee Chairman, recalled his work as a young White House aide when Hatch-Waxman became law. He highlighted the passage as a crowning lesson of bipartisanship, showcasing a Republican administration and Senate working with a Democratic House to pass critical legislation. Former Rep. Upton also noted his former congressional district in Michigan had both brand name and generic pharmaceutical manufacturing facilities, a sign that Hatch-Waxman “helped provide jobs for tens of thousands of workers and helped millions of patients get more affordable care.”
Congressman Scott Peters (D-CA) observed the remarkable legislative feat of creating a multi-faceted structure of economic incentives for pharmaceutical development. Then, “after investors have recouped their investment, we can turn to generics to bring costs down and then focus on the next new innovation.” Thanks to Hatch-Waxman, Rep. Peters said, the evolution of the biopharmaceutical industry in his home city of San Diego has expanded to more than 1,000 life science companies that employ more than 80,000 people.
Congressman Buddy Carter (R-GA) told the audience about his experience as a pharmacist who has had to watch seniors decide whether to pay for groceries or medicine. That perspective has enhanced his understanding of how transformative the Hatch-Waxman Act has been for the American public. Aligned with the collective mission for improving patient affordability and access to cutting-edge treatments, Rep. Carter is focused now on correcting flaws in the Inflation Reduction Act’s drug pricing provisions and on reforming the practices of pharmacy benefit managers.
Matt Sandgren, Sen. Hatch’s former Chief of Staff, shared “legendary” stories of the contentious and complex negotiations that brand-name drug manufacturers and generic drugmakers endured during the creation of the Hatch-Waxman Act. During the final stages, he recalled, Sen. Hatch badly needed a root canal, but was afraid talks would unravel if he left. His uncomfortable circumstances convinced both sides to agree on the law’s collective benefits, which have spurred trillions of dollars in consumer savings since its inception.
Sharon Reiche, Assistant General Counsel, Corporate Affairs & Policy for Pfizer, praised the greater degree of certainty under Hatch-Waxman. Effective, timely resolutions to patent disputes before a generic enters the market are advantageous to both brand-name and generic drugmakers. “When you have a type of system where you have more clarity, more certainty, more predictability, you’re going to see more investment,” Reiche said. “More investments and innovation is what’s going to move the knowledge base and economic development.”
Stephen Ezell, Vice President for Global Innovation Policy at the Information Technology and Innovation Foundation (ITIF), contextualized Hatch-Waxman in history. In the 1970s, European-headquartered drug companies developed more than twice as many new drugs as U.S. firms. He said Hatch-Waxman and the Bayh-Dole Act, which gave universities the ability to license intellectual property to entrepreneurs, empowered the U.S. to evolve and become the current global leader in medical innovation. Ezell also shared concerns about looming policies and threats to march-in on intellectual property rights that could damage the framework and the next generations of breakthrough treatments.
Dan Leonard, We Work for Health Executive Director, concluded by lauding the ingenuity of the Hatch-Waxman Act and bipartisan progress. Balancing innovation with generic affordability might’ve been conflicting goals at the time, he said, but members of Congress “figured out the balance where we can keep innovation, make sure that America remains the leader in the world in developing new life science treatments, [and] still make sure they are affordable for patients.”
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