Why are generic drugs less expensive than brand name drugs?
Generic drugs often cost 30% to 50% less than brand name drugs.
The main reason generic drug companies can market their drugs at lower prices is that they don?t face the same development costs as brand-name companies. The process of research, development, marketing and promotion of the drug can cost hundreds of millions of dollars! Without the startup costs for development of the drug, generic manufacturers can afford to make and sell it more cheaply.
Under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, generic drug companies don?t have to repeat expensive clinical trials.
In addition, many generic drugs are well-established, frequently used medications that do not need to bear the costs of advertising.
Also, there is strong competition in the U.S. among companies that make generic drugs. When multiple companies begin producing and selling a drug, the competition among them can also drive the price down even further.
These days, faced with competition from generics, pharmaceutical companies often manage to come up with variations on brand-name drugs that are going off-patent. After FDA approval, they market the new versions as state-of-the-art. The most notorious of these cases was the introduction of Nexium, a drug for heartburn, that is a slightly altered version of Prilosec, which was about to go off-patent.
So are generics as good as brand name drugs?
This debate has gone on for years. Will there be a definite answer? Unlikely. Why not? Because it would require the generic manufacturers to conduct well controlled double blind studies to prove their medications are as good as the ?brand name? product. That is just not going to happen. Why? The cost to do such a study would in all likelihood dramatically increase the cost of a generic product and there is always the risk to the generic manufacturer that they discover that their generic does not stack up to a brand name drug.
Reasons for choosing the brand-name drugs
There are a few reasons for choosing the brand-name drugs rather than the generics:
??? * For critical dose medications (drugs with a narrow therapeutic range). For those with epilepsy, asthma, diabetes, heart ailments, mental disorders, and thyroid problems very precise control of the dose may be important, and switching drugs may upset a delicate balancing act.
??? * The medicine may be extremely hard to produce. There are very few drugs for which a generic equivalent has not been established. One is levothyroxine (Synthroid) - a thyroid hormone replacement used to treat hypothyroidism and goiter (enlargement of the thyroid gland). That does not mean that the brand is better than the generic, just that the brand and generic do not have an established equivalence. The difficulty in establishing equivalence may be that the original is formulated so uniquely that it?s hard to duplicate, or that the drug is normally absorbed so erratically that equivalence is hard to establish.
Generic drugs often cost 30% to 50% less than brand name drugs.
The main reason generic drug companies can market their drugs at lower prices is that they don?t face the same development costs as brand-name companies. The process of research, development, marketing and promotion of the drug can cost hundreds of millions of dollars! Without the startup costs for development of the drug, generic manufacturers can afford to make and sell it more cheaply.
Under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, generic drug companies don?t have to repeat expensive clinical trials.
In addition, many generic drugs are well-established, frequently used medications that do not need to bear the costs of advertising.
Also, there is strong competition in the U.S. among companies that make generic drugs. When multiple companies begin producing and selling a drug, the competition among them can also drive the price down even further.
These days, faced with competition from generics, pharmaceutical companies often manage to come up with variations on brand-name drugs that are going off-patent. After FDA approval, they market the new versions as state-of-the-art. The most notorious of these cases was the introduction of Nexium, a drug for heartburn, that is a slightly altered version of Prilosec, which was about to go off-patent.
So are generics as good as brand name drugs?
This debate has gone on for years. Will there be a definite answer? Unlikely. Why not? Because it would require the generic manufacturers to conduct well controlled double blind studies to prove their medications are as good as the ?brand name? product. That is just not going to happen. Why? The cost to do such a study would in all likelihood dramatically increase the cost of a generic product and there is always the risk to the generic manufacturer that they discover that their generic does not stack up to a brand name drug.
Reasons for choosing the brand-name drugs
There are a few reasons for choosing the brand-name drugs rather than the generics:
??? * For critical dose medications (drugs with a narrow therapeutic range). For those with epilepsy, asthma, diabetes, heart ailments, mental disorders, and thyroid problems very precise control of the dose may be important, and switching drugs may upset a delicate balancing act.
??? * The medicine may be extremely hard to produce. There are very few drugs for which a generic equivalent has not been established. One is levothyroxine (Synthroid) - a thyroid hormone replacement used to treat hypothyroidism and goiter (enlargement of the thyroid gland). That does not mean that the brand is better than the generic, just that the brand and generic do not have an established equivalence. The difficulty in establishing equivalence may be that the original is formulated so uniquely that it?s hard to duplicate, or that the drug is normally absorbed so erratically that equivalence is hard to establish.
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