How are generic
drugs approved?
Drug companies must
submit an abbreviated new drug application (ANDA) for approval to market a
generic product. The Drug Price Competition and Patent Term Restoration Act of
1984, more commonly known as the Hatch-Waxman Act, made ANDAs possible by
creating a compromise in the drug industry. Generic drug companies gained
greater access to the market for prescription drugs, and innovator companies
gained restoration of patent life of their products lost during FDA's approval
process.
New drugs, like
other new products, are developed under patent protection. The patent protects
the investment in the drug's development by giving the company the sole right
to sell the drug while the patent is in effect. When patents or other periods
of exclusivity expire, manufacturers can apply to the FDA to sell generic
versions.
The ANDA process
does not require the drug sponsor to repeat costly animal and clinical research
on ingredients or dosage forms already approved for safety and effectiveness.
This applies to drugs first marketed after 1962.
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