What is the Hatch-Waxman Act primarily known for?

The Hatch-Waxman Act is primarily known for establishing a pathway for generic drug approval. Enacted in 1984, this landmark legislation was designed to balance the interests of brand-name pharmaceutical companies and generic manufacturers. It introduced the Abbreviated New Drug Application (ANDA) process, allowing generic drug manufacturers to obtain approval for their products without having to repeat costly and time-consuming clinical trials. Instead of requiring proof of safety and efficacy through new trials, the Act permits generics to demonstrate bioequivalence to the brand-name drug, significantly expediting the process for bringing lower-cost alternatives to the market.

This framework has stimulated competition in the pharmaceutical sector, ultimately benefiting consumers by reducing drug costs. The Hatch-Waxman Act also included provisions for incentives to encourage the development of new drugs while safeguarding brand name companies from immediate competition, thereby fostering innovation in the industry. This dual focus on generics and innovation is a key aspect of the Act's enduring significance in the U.S. healthcare system.