In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act. The Amendments sought to strike a balance between two conflicting policy objectives: inducing pioneer drug companies to invest in the research, development and approval of new prescription drugs, while simultaneously encouraging generic manufacturers to market cheaper, generic copies of those drugs. Twenty years later, the Hatch-Waxman system is out of balance due to the aggressive manipulation by the health care industry. Both pioneer drug companies and generic manufacturers seek to increase their drug profits through aggressive, legal, and sometimes illegal strategies.

In December 2003, Congress passed the Medicare, Prescription Drug Improvement, and Modernization Act of 2003, which includes provisions to tighten the loopholes of the Hatch-Waxman system and expedite generic market entry. Although it should relieve some of the abuses, the Act does not define the activities protected by the safe-harbor provision, address generic manufacturer’s filing of multiple non-final ANDAs or prohibit the pioneer-generic anti-competitive agreements. Until such legislation is enacted, the consumer is at the mercy of the pharmaceutical industry and will ultimately bear the cost of litigation.