The Generics Pathway in the USA: The American Experience, a Model for the World?

Abstract

The paper describes the legal and regulatory mechanism in the United States pursuant to which generic versions of patented medicines may be approved for marketing by the Food and Drug Administration (FDA). The paper makes two basic points: (1) the system works reasonably well for the United States, but it involves a complex regulatory framework the reasonably smooth functioning of which depends on characteristics of the US legal system operating in a commercial market environment where there are potentially significant financial rewards for generic producers achieving market entry, and; (2) the legal and regulatory systems of many low and middle income countries are not as robust as the US system, and markets may not offer the same level of financial reward so as to justify for generic producers comparably high expenditures on market entry. The United States through its trade negotiating apparatus is attempting to embed an approach similar to its own in its trading partners, such as in the TransPacific Partnership agreement, from which has presently withdrawn its signature. Countries in negotiation with the United States should carefully assess whether the US model is likely to be appropriate for their national healthcare frameworks, and what alternatives or adjustments may be preferable. The paper offers a few suggestions in that regard.

Keywords: Pharmaceuticals, Medicines, Patent, Generic, Hatch-Watchman, Regulatory Approval

JEL Classification: I18, K32, K33, O19, O34