ABSTRACT
Biological drugs make up one of the fastest-growing sectors of the pharmaceutical and biotechnology industry in the past decade. For example, in 2005, worldwide spending on drug therapy grew by 7% and topped $600 billion. However, sales of biologics have grown even more rapidly, with an increase of about 17% in 2005 and annual expenditures worldwide of more than $50 billion. By 2010, spending on biologics roared to over $100 billion, with biologics making up nearly half of all newly approved medicines. Due to the high costs involved in the research, development, and production of many medicines, regulatory regimes have been created to balance the intellectual property interests and investments made by originator companies with the need for wider patient access through generic forms of the drugs. In the traditional chemical drug market, such a regime was created by the Hatch-Waxman Act. The Hatch-Waxman Act added Section 505(j) to the Federal Food, Drug, and Cosmetic (FD&C) Act. This section and its accompanying regulations created the Abbreviated New Drug Application (ANDA) process, which was designed to provide independent generic firms with a strong incentive to develop and introduce lower-cost and affordable generic drugs to majority of patient population. By virtually all accounts, the HatchWaxman Act has been extremely successful in bringing cheaper and affordable generic products to the market while maintaining incentives for the development and discovery of new drugs.
