Generic Drugs

What are Generic Drugs?

Generic drug or generics is a drug created to be the same as the existing and approved brand-name drug. A generic drug has the same dosage form, route of administration, quality, strength and performance characteristics as the approved brand-name. Generics are distributed without patent protection. It may have a patent on the formulation but not on the active ingredients.

The generic drugs work the same as their brand name version. It also provides the same chemical benefits. Generic drug uses the same active ingredients as to the patented counterparts. It has the same quality, effectiveness, strength, dosage and route of administration.

Why are generic drugs much cheaper than their original brand names?

Patented medicines are more expensive because: 

  • Generics drugs makers don’t face the same costs as manufacturers of brand name drugs. Brand-name makers often invented the drug which cost them hundreds of millions of dollars during the process. It also takes brand-name maker years to invent the drug.  
  • The investments also include advertising on the TV commercials and billboards that are quite expensive.  

The brand name maker has to compensate their expense that is why the brand-name drugs are so expensive. The generic drug maker, on the other hand, does not invest that much. Their only requirement is to demonstrate to the regulators that its version is as good and effective in human as the original. When the generic drug becomes available in the market, the competition often leads to lower prices for both.  

The drug patent in the US gives 20 years of protection but they are applied for before chemical trials begin. So the effective life of a drug patent tends to be between 7-12 years. It has been estimated that the average cost of testing and discovering new innovative drug of brand-name companies may be as much as $800 million but the true cost is closer to $100-$200 million.  

Manufacturers of brand-name drug use different strategies to extend the period of the market on their drugs and to prevent generic competition. One strategy is the aggressive litigation to preserve or extend the patent protection on their drug.  

Generic drugs are cheaper because: 

  • The generic drug doesn’t require additional advertising because they are bio-equivalents of the brand-name drugs. In fact, they receive the benefits of the marketing efforts of the brand-name drugs like media advertising, distribution of free sample and presentation of drug-representative.  
  • The production of a generic drug doesn’t need a new formula or production technology to make a generic drug. 
  • The manufacturer of the generic drug doesn’t need to bear the burden of proving the efficacy and safety of the drug through clinical trials because there were existing proven already by the brand-name company.