History of Generic Drugs in the United States: How They Became 90% of Prescriptions

Before you pick up a prescription, chances are you’re holding a generic drug. Today, more than 9 out of 10 prescriptions filled in the U.S. are for generics. But this wasn’t always the case. For most of the 20th century, brand-name drugs dominated the market - and prices were high because there was little competition. The rise of generic drugs didn’t happen by accident. It was the result of decades of legal battles, public health crises, and smart policy changes that put patient access and affordability at the center of drug regulation.

The Roots of Drug Standards: 1820-1906

The story of generic drugs in America starts long before anyone talked about "bioequivalence" or "ANDAs." In 1820, eleven doctors met in Washington, D.C., and created the first U.S. Pharmacopeia. Their goal? To stop pharmacies from selling fake or weak medicines. Back then, drugs were mixed by hand, and ingredients varied wildly. One bottle of quinine might have the right dose; the next could be barely active - or even poisonous.

In 1848, Congress passed the Drug Importation Act, giving U.S. Customs the power to seize substandard drugs coming in from overseas. It was the first time the federal government stepped in to control drug quality. Then, in 1888, the American Pharmaceutical Association published the National Formulary, a standardized list of approved drug ingredients and formulas. These weren’t laws yet, but they laid the groundwork for consistency.

The real turning point came in 1906, when President Theodore Roosevelt signed the Federal Food and Drugs Act. This law forced manufacturers to list ingredients on labels. No more hiding arsenic or alcohol in "tonics." It also banned false claims - like a medicine curing tuberculosis when it was just sugar water. This was the birth of the modern FDA, though it didn’t have the power to pull dangerous drugs off shelves yet.

The Elixir Sulfanilamide Tragedy and the 1938 Law

In 1937, a pharmaceutical company released a new version of the antibiotic sulfanilamide - but instead of using a safe solvent, they used diethylene glycol, a toxic chemical found in antifreeze. The product, called Elixir Sulfanilamide, was sold over the counter. More than 100 people died, mostly children. The public outcry was immediate.

That disaster led to the Federal Food, Drug, and Cosmetic Act (FDCA) of 1938. For the first time, drug companies had to prove their products were safe before selling them. The FDA gained real authority. But here’s the catch: the law didn’t require proof that drugs actually worked. It only required proof they wouldn’t kill you. So for decades, many drugs were on the market with no solid evidence they helped patients - brand-name or otherwise.

The Kefauver-Harris Amendments: Proving Efficacy

By the early 1960s, another crisis hit. Thalidomide, a drug used for morning sickness in Europe, caused severe birth defects. In the U.S., it was mostly kept off the market thanks to an FDA reviewer named Frances Kelsey, who refused to approve it without better safety data. Her stand made headlines.

In response, Congress passed the Kefauver-Harris Drug Amendments of 1962. This law changed everything. For the first time, drugmakers had to prove their products were not just safe, but effective. They had to run clinical trials. And here’s the key detail: all drugs approved between 1938 and 1962 had to go back through the review process. Thousands of drugs were pulled or reformulated.

This was the moment when the idea of "equivalent" drugs began to take shape. If a brand-name drug had to prove it worked, then a copy should, too - right? But there was no easy way to make that happen. Copying a drug meant repeating expensive clinical trials. Most companies didn’t bother.

Medicare, Medicaid, and the Push for Cheaper Drugs

In 1965, Congress created Medicare and Medicaid. Suddenly, the government was paying for millions of prescriptions. And it was spending a lot of money - mostly on brand-name drugs.

Health officials realized: if they could switch even a small percentage of prescriptions to cheaper versions, they’d save billions. But generics weren’t widely available. Why? Because the approval process was slow, unclear, and expensive. In 1967, Congress passed laws encouraging federal programs to use generic drugs whenever possible. But without a legal pathway, most pharmacists and doctors stuck with brands - out of habit, fear of liability, or lack of trust.

The Hatch-Waxman Act: The Game Changer

The real revolution came in 1984 with the Drug Price Competition and Patent Term Restoration Act - better known as the Hatch-Waxman Act. Named after its sponsors, Senator Orrin Hatch and Representative Henry Waxman, this law created the modern system for generic drugs.

Before Hatch-Waxman, only about 19% of prescriptions were for generics. After? That number jumped. Here’s how it worked:

• Generic companies no longer had to repeat full clinical trials. Instead, they had to prove their drug was bioequivalent - meaning it released the same amount of active ingredient into the bloodstream at the same rate as the brand.
• They used the Abbreviated New Drug Application (ANDA), a faster, cheaper process.
• Brand-name companies got up to five extra years of patent protection to make up for time lost during FDA review.
• Generic manufacturers were given 180 days of market exclusivity if they were the first to challenge a patent.

This was a win-win. Brand-name companies got more time to profit. Generic companies got a clear path to market. Patients got cheaper drugs. Within a decade, generic use doubled. By 2000, it was over 50%.

The Rise of the Generic Market: 2000-2020

By the early 2000s, the FDA was overwhelmed. Thousands of ANDA applications were sitting in queues. Approval times stretched to 30 months. In 2007, the agency launched the Generic Initiative for Value and Efficiency (GIVE) to fix the backlog.

Then came the Generic Drug User Fee Amendments (GDUFA) in 2012. For the first time, generic manufacturers paid fees to the FDA to fund faster reviews. The results? Review times dropped from 30 months to under 10 months. Approval rates jumped from 45% to 95%. The system started humming.

Meanwhile, the market exploded. In 2022, generics made up 90.5% of all prescriptions filled in the U.S. - but only 23.4% of total drug spending. That’s the power of competition. A brand-name drug might cost $300 a month. The generic? $10. The Association for Accessible Medicines estimates generics saved the U.S. healthcare system $373 billion in 2021 alone. Over the past decade, that’s over $3.7 trillion in savings.

Problems in the System: Price Gouging and Shortages

Despite all the progress, the generic drug industry has serious flaws. One big issue: price spikes.

Between 2013 and 2017, the price of 15% of generic drugs jumped more than 100%. Why? Because some markets became too concentrated. If only two companies make a certain generic - and one quits - the other can raise prices. That’s what happened with drugs like doxycycline and penicillin. Some generics went from $20 a bottle to $1,800.

Another problem: drug shortages. Between 2018 and 2022, the FDA recorded 1,234 shortages. Sixty-five percent involved generic drugs. Why? Because most active ingredients come from factories in China and India. When a natural disaster, political issue, or quality failure hits one plant, supply chains break. The FDA says 80% of API (active pharmaceutical ingredient) facilities are overseas.

And then there’s the loophole: patent abuse. Brand-name companies sometimes sue generic makers just to trigger a 30-month delay. Even if the patent is weak, the lawsuit stops the generic from entering the market. The FDA has taken action under the CREATES Act - 27 enforcement actions as of 2022 - but it’s still happening.

What’s Next? Biosimilars and Global Supply Chains

The next frontier isn’t small-molecule generics anymore. It’s biosimilars - cheaper versions of complex biologic drugs like Humira or Enbrel. These aren’t simple copies. They’re made from living cells, so they’re harder to replicate. But they’re also way more expensive - often $10,000 a year. Biosimilars could cut those costs by 70% or more.

The FDA approved its first biosimilar in 2015. Since then, more have followed. But adoption is slow. Doctors and patients still hesitate. Insurance companies don’t always push them. The system isn’t fully ready.

As for supply chains, the U.S. government is finally paying attention. The pandemic exposed how dangerous it is to rely on just a few foreign factories. New policies aim to bring some API production back to the U.S. or to allied countries. But it’s expensive and slow.

Why It Matters

The history of generic drugs in the U.S. is a story of public health triumph - but also of missed opportunities and corporate loopholes. Without the Hatch-Waxman Act, millions of Americans couldn’t afford their medicines. Without the FDA’s reforms, the system would still be clogged with paperwork.

Today, generics are the invisible backbone of American healthcare. They’re not "inferior." They’re not "cheap substitutes." They’re identical in every way that matters: active ingredient, dose, safety, and effect. The only difference? Price.

And that’s the point. The system works best when competition is allowed. When companies can make the same drug without paying for someone else’s research. When patients aren’t forced to pay for a brand name they don’t need.

The challenge now is to fix the cracks - stop price gouging, secure supply chains, and make sure biosimilars get the same fair shot as generics did in the 1980s. Because if we do, the next 40 years could be even better than the last.

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