About half of all prescription drugs in the United States are generic. Most of us are asked if we want to switch. we say yes. The price reduction is attractive. It is assumed that generic drugs should also be valid.
Yeah? Why is it so cheap?
Let’s start with the basics. Generic drugs are bioequivalents of branded drugs. This is not just a marketing story. FDA requires strict inspection. The chemical formulas must be similar. It should affect the body with the same intensity. The absorption rates should be approximately the same.
Safety, quality and performance must also match each other. The route of administration remains unchanged. If the brand name is a pill and it’s a liquid, it only stays in a liquid state.
So, if the effects on the body are actually the same, what’s the win?
price.
The Congressional Budget Office estimates that consumers can save nearly $10 billion a year by choosing generic drugs. Consider Prozac. You might pay $40 per month out-of-pocket for the brand. If you switch to fluoxetine hydrochloride (generic), your cost price drops to $10. Save $360 per year.
Why is the price difference so big?
Overhead.
It takes years to develop new medicines. It costs millions, even billions. Companies conduct expensive clinical trials. They have demonstrated safety and efficacy. When the FDA approved the branded drug, the original company had already invested a large amount of money. They also invest heavily in marketing. They market to pharmacies, insurance companies and doctors. The total cost of drug delivery is astronomical.
When branded companies have exclusive rights, they charge a premium to cover these costs.
Generic drug manufacturers do not have this burden. They aren’t paying for the initial discovery. They do not start from scratch with large-scale phase I–III clinical trials. We are mainly responsible for production costs. This allows us to set lower prices.
The first general version on the market dropped the price significantly. But it was another generic newcomer that caused the biggest drop.
So how does this timeline work? When can other companies jump in? How do they get around patent walls?
Why Stick with the Brand Name?
If generics are cheaper and just as effective, why do people still choose brand names?
Marketing plays a big role. If companies convince patients that generics are a “cheaper” option and deserve the best option, many will pay a premium. There are also psychological barriers.
Even if patients eventually find a drug that works, there are risks associated with switching drugs. The fear of losing effectiveness keeps them loyal.
Next come the inactive ingredients. Generic drugs may use different binders, fillers, or dyes. These do not change the way the medicine works. It does not affect safety. However, the tablets may look different. Taste may vary.
This visual shift makes people wonder. Is there something missing from the cheaper version?
This is a matter of perception. The active ingredients are the same. The result is the same. But the packaging and taste can create doubt.
Generic Drug Production
How to get generic drugs approved after patent expiration
Generic drugs cannot exist in a vacuum. First, bioequivalent brands must be created, approved and widely distributed.
When a pharmaceutical company develops a new branded drug, the patent gives it the exclusive right to develop, manufacture and sell that compound. The terms of these patents are not uniform. In most cases, patents cannot be renewed after they expire. The average length of a drug patent in the United States is 17 years.
When time runs out, the monopoly breaks. Other companies can then legally make generic versions of the drug.
ANDA process and bioequivalence standards
To begin this process, pharmaceutical companies must submit an Abbreviated New Drug Application (ANDA) to the FDA.
Before the FDA approves an ANDA, a generic drug must meet the same strict standards that the original brand name drug met when it was first approved. The Drug Price Competition and Patent Term Restoration Act of 1984 (commonly known as the Hatch-Waxman Act) makes bioequivalence the primary basis for the approval of generic drugs.
Bioequivalence means that generic drugs must contain the same active ingredients. They must also be of the same strength and form. The route of administration must be similar as in the branded version. In addition, generic drugs must be indicated for the same ailments.
“Bioequivalence is the main basis for the approval of generic drugs.”
FDA Inspection and Orange Book
The FDA doesn’t just rely on documents. The agency can conduct physical inspections of factories to ensure that the company is manufacturing generic drugs safely.
A labeling review follows. This step ensures that the information provided with the general correspondence information contains all the information the consumer needs. This prevents confusion between branded and generic versions.
If the company meets all of these criteria, the ANDA is approved. The FDA then adds the generic drug to its list of approved drugs. This list is called the “Orange Book”.
Finding Your Generic Equivalent
For more information about generic drugs, see the links on the next page.
Is there a generic version of your favorite brand-name drug?
Your doctor or pharmacist will know if a generic version of the drug you need is available. But if you want to see for yourself, check out the e-Orange Book.
Lots More Information
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More Great Links
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FDA: Does Your Brand-name Drug have a Generic Equivalent?
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FDA: What You Should Known about generic drugs
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FDA: Generic Drug Approvals
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Medicine Net: Generic Drugs vs. Brand-Name Drugs
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ADA: Know Your Rx Options
Sources
FDA: Office of Generic Drugs. http://www.fda.gov/cder/ogd/
FDA: Save money on prescription drugs. http://www.fda.gov/fdac/features/2005/505_save.html
FDA: Generic Drug Review Process (ANDA). http://www.fda.gov/cder/handbook/anda.htm
