While the behemoth health care reform bills have many positive attributes, patent reform will be critical to promote innovation, without which the health care industry will suffer. Some 26 years ago, The Hatch-Waxman Act attempted to reconcile the conflicting policies of increasing access to generic drugs while promoting innovation.
What has been the result of increased access to generic drugs? The Congressional Budget Office has reported that under the current system, increased competition has led to a 12% decrease in revenues for name-brand drugs. Despite this reduction in revenues, pharmaceutical companies have dramatically increased their investment in research and development.