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Simple English definitions for legal terms
Drug Price Competition and Patent Term Restoration Act of 1984
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A quick definition of Drug Price Competition and Patent Term Restoration Act of 1984:
The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, is a law that was passed to encourage the development of generic drugs and to protect the rights of pharmaceutical companies that develop new drugs. The law allows generic drug manufacturers to use the same active ingredients as brand-name drugs, but they must prove that their product is equivalent to the original drug. The law also provides patent extensions for brand-name drugs to compensate for the time it takes to get FDA approval, and it allows generic drug manufacturers to challenge the validity of these patents. This law has helped to make prescription drugs more affordable for consumers and has increased competition in the pharmaceutical industry.
A more thorough explanation:
The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, is a law that was passed by the United States Congress to encourage the development of generic drugs and to protect the interests of pharmaceutical companies.
Under this law, generic drug manufacturers can apply for approval of their products by demonstrating that they are equivalent to a brand-name drug that is already on the market. This process is known as the Abbreviated New Drug Application (ANDA) process.
The Hatch-Waxman Act also provides a mechanism for pharmaceutical companies to extend the patent life of their drugs. This is done by allowing them to apply for a patent term extension, which can add up to five years to the life of a patent.
For example, if a pharmaceutical company has a patent on a drug that is set to expire in three years, they can apply for a patent term extension that would add an additional two years to the life of the patent. This would give the company a total of five years of exclusive rights to sell the drug.
The Hatch-Waxman Act has been credited with increasing competition in the pharmaceutical industry and making drugs more affordable for consumers. By allowing generic drug manufacturers to enter the market more easily, the Act has helped to drive down the cost of prescription drugs.