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Abbreviated New Drug Application (ANDA)

The FDA application pathway for generic drugs, which requires proving bioequivalence to the brand-name drug rather than repeating full clinical trials.

How It Works

The ANDA pathway was established by the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman), codified at 21 U.S.C. 355(j). It allows generic manufacturers to rely on the innovator's safety and efficacy data, submitting only bioequivalence (BE) data comparing the generic to the Reference Listed Drug (RLD). A typical BE study uses 24-36 healthy volunteers in a crossover design, with FDA requiring 90% confidence intervals on Cmax and AUC to fall within 80-125% of the RLD. ANDA filings cost roughly $5-15 million to develop, compared to $1-2 billion for full NDA development of a new drug, and this cost differential is why generic list prices typically drop 80-95% within a few years of patent expiration. The ANDA process includes paragraph certifications regarding patents listed in the Orange Book: Paragraph I (no patent listed), Paragraph II (patent expired), Paragraph III (will wait for expiration), and Paragraph IV (patent is invalid or not infringed). Paragraph IV certifications trigger patent litigation and a 30-month stay, with the first successful Paragraph IV challenger earning 180-day exclusivity (first-to-file exclusivity). FDA approves 600-900 ANDAs per year; median approval time is roughly 30 months including multiple review cycles. The Lipitor (atorvastatin) Hatch-Waxman story is emblematic: Ranbaxy filed a Paragraph IV challenge in 2002, won first-to-file exclusivity, launched November 2011 after 180-day exclusivity period, generic prices fell roughly 95% within two years, saving the U.S. healthcare system an estimated $30 billion over the next decade.

Related Terms

  • FDA Approval, The process by which the U.S. Food and Drug Administration evaluates a drug's safety and efficacy through clinical trial data before allowing it to be marketed.
  • Generic Drug, A medication that contains the same active ingredient, dosage, and form as a brand-name drug, approved after the original's patent expires, typically costing 80-95% less.
  • Bioequivalence, A regulatory standard proving that a generic drug delivers the same amount of active ingredient to the bloodstream at the same rate as the brand-name drug.
  • Orange Book Listing, The FDA's publication of approved drug products with therapeutic equivalence ratings and associated patent and exclusivity information, used to determine generic substitution.
  • Pay-for-Delay Settlement, A patent-litigation settlement in which a brand-name drug manufacturer pays a generic challenger to delay launching its generic version, preserving brand monopoly profits.

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About This Definition

This definition is part of the DrugPrice Drug Pricing Glossary, 49 terms explaining how prescription drug pricing works in the United States. All definitions are written in plain language for patients, caregivers, journalists, and healthcare professionals.

this entity is one of the U.S. Medicare prescription-drug pricing concepts that recurs across this site. The definition above is the technical answer; the paragraphs below add the practical context for how the concept connects to the CMS Medicare Part D Drug Spending data data behind every per-entity page on the site.

In the CMS Medicare Part D Drug Spending data data, this concept shapes one or more of the fields that drive the per-entity grades and rankings on this site. The methodology page describes which fields feed into which output; this glossary entry documents the underlying term.

Source: CMS Medicare Part D Spending, 2026.