The Hatch-Waxman Act explained

The Drug Price Competition and Patent Term Restoration Act was approved on Sept. 24, 1984, as Public Law 98-417, according to the text printed in the Statutes at Large¹. FDA's records show 207 original generic drug approvals in calendar 1984, and by 1987 the yearly figure had reached 389, by GxRadar's count of Drugs@FDA data published through openFDA². The same database now holds 19,593 original ANDA approvals through Oct. 27, 2026.

Almost everyone calls the law Hatch-Waxman, after its lead sponsors, Senator Orrin Hatch and Representative Henry Waxman. It is usually described as a bargain. Generic manufacturers got a faster, cheaper route to market. Brand manufacturers got back some of the patent life used up by clinical testing and FDA review, plus new periods of marketing exclusivity.

Four decades on, that trade still decides when a generic can launch, which is why patent fights and exclusivity dates show up in so many drug pricing stories.

The two problems the law addressed

Before 1984 there was no streamlined approval route for generic copies of most drugs approved after 1962. A would-be generic maker generally had to support its own application with safety and effectiveness evidence, which made many copies uneconomic to develop.

A federal appeals court ruling earlier in 1984 added a second obstacle. It held that testing a patented drug before the patent expired, even only to prepare a generic application, counted as infringement. Generic work therefore could not start until the patent ran out, which pushed generic entry well past expiration.

Brand manufacturers had their own complaint. Much of a drug's patent term was spent in development and FDA review, before the product could be sold at all.

Congress answered the testing problem with a safe harbor, now at 35 U.S.C. 271(e)(1)³, which says it "shall not be an act of infringement" to use a patented invention solely for uses reasonably related to developing and submitting information to FDA. It answered the brand complaint with patent term restoration.

What each side got

How the generic pathway and patent challenges work

Title I of the act created the modern ANDA, now codified in section 505(j) of the Food, Drug, and Cosmetic Act⁴. An applicant shows that its product has the same active ingredient, strength, dosage form and route as the reference drug and is bioequivalent to it. It does not repeat the original clinical trials. The step-by-step review is covered in how a generic drug gets approved.

Each ANDA must also address every patent the brand has listed in the Orange Book. A generic that says a listed patent is invalid or will not be infringed files what is called a Paragraph IV certification and must notify the patent owner. If the owner sues within 45 days, approval cannot take effect for 30 months unless a court rules sooner. FDA's regulation on approval timing during patent litigation⁵ spells out how the stay starts and ends. The first applicant to file such a challenge can earn 180 days of exclusivity against later challengers.

How patent term restoration is calculated

Title II lets a brand manufacturer ask to extend one patent on a newly approved product. The statute is 35 U.S.C. 156⁶, and FDA summarizes the mechanics in its patent term restoration FAQ⁷.

• The extension equals half the testing phase plus all of the FDA approval phase, minus any time FDA finds the applicant did not act with due diligence.
• It cannot exceed five years.
• Total remaining patent life after approval cannot exceed 14 years, so a product with 14 or more years left at approval gets nothing.
• The application must be filed within 60 days of FDA approval.
• The US Patent and Trademark Office grants the extension. FDA determines the length of the regulatory review period and handles due diligence questions.

A hypothetical shows how the caps bite. If testing took six years and FDA review took one, the raw extension is three plus one, or four years. If the patent would otherwise run 12 years past approval, adding four would give 16, so the extension is cut to two years to stay inside the 14-year cap.

The exclusivity periods

Exclusivity is separate from patents. FDA grants it at approval, and it blocks certain competing applications whether or not any patent exists, as FDA's explainer on patents and exclusivity⁸ puts it. Hatch-Waxman created three types; later laws added more.

FDA's rules on the five-year and three-year periods are in 21 CFR 314.108⁹. One wrinkle ties NCE exclusivity to patent litigation. When a generic files in year four with a Paragraph IV certification and the brand sues within the 45-day window, the stay on generic approval runs until seven and a half years after the brand's approval, rather than the usual 30 months.

What followed, and how Congress has changed the deal

Generic use climbed fast. Generics filled 19 percent of US prescriptions in 1984 and 89 percent in 2016, according to a 2019 review in Clinical Pharmacology & Therapeutics¹⁴. FDA's consumer page on generics¹⁰ now says 9 out of 10 prescriptions filled in the US are for generic drugs.

Those counts come from GxRadar's tally of original ANDA approvals in openFDA's Drugs@FDA records; the full series is on our approvals page.

Congress has reworked parts of the 1984 deal several times. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003¹¹ limited the 30-month stay to patents listed before the ANDA was submitted, added rules for forfeiting the 180-day period, and required brand and generic companies to file patent settlements with antitrust regulators. The FDA Reauthorization Act of 2017¹² added competitive generic therapy exclusivity. The Orange Book Transparency Act of 2020¹³ tightened the rules on which patents brands may list, and requires a brand to ask FDA within 14 days to amend or withdraw a listing once a court or the Patent Trial and Appeal Board has found the patent's claims invalid.