Publication Date

2023

Abstract

In 1984, with the passing of the Hatch-Waxman Act, Congress orchestrated a compromise that permanently changed how drug markets operate. This piece of legislation created an expedited pathway for generics to enter the market, and, in exchange, brand drugs could extend their patents to account for time lost during their market approval process. Although this well-configured trade was supposed to help generics enter the scene quicker, the current drug market landscape makes one question whether this legislation has succeeded in its aims. The following study explores the lifecycle of top-selling brand drugs in comparison to the vision put forth by the Hatch- Waxman Act. Using the legislation as a framework, the article examines the data of 236 top-selling drugs, quantifying the average length of patent terms and their extensions, as well as any additional market monopoly time secured thereafter. This study finds that 91% of drugs that obtain patent term extensions continue their monopolies well past the expiration of those extensions, most often by relying on secondary patents. The Hatch-Waxman Act allows drug companies to request a single extension to their patent, limited to a particular length. Nevertheless, drug companies continue to extend their protections well past what is contemplated in the legislation, costing the system a conservatively estimated $53.6 billion. The study ends with policy recommendations to impose limits on the time that can be added to the monopoly period of any drug that has already received a patent term extension. This includes a limit to the accrual of both secondary patents and exclusivities.

Document Type

Article

Publication Title

Yale Law and Policy Review

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