STAT April 25, 2024
The Hatch-Waxman Act of 1984, which gave rise to the modern generic drug market, was one of the most significant cost-reducing policy innovations of the last 40 years. In 2021 alone, the use of generic and biosimilar drugs saved $373 billion in health expenditures. More than 90% of prescriptions filled that year were for generics or biosimilars, up from just over 18% the year that Hatch-Waxman was passed.
Today, however, generic drugs seem to be a victim of their success. Important categories of drugs — from antibiotics to chemotherapies to saline solution — experience persistent shortages and inadequate quality. Why? Prices have dropped so low that manufacturers don’t have the resources to produce adequate quantities of drugs or ensure compliance...
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