Why Generic Drugs?
A generic pharmaceutical product is the bioequivalent of a brand name (innovator) pharmaceutical. This includes dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Although generic drugs are chemically identical to their branded counterparts, they traditionally cost consumers 30 – 75 percent less than the brand drug.
New drugs are developed under patent protection which protects the innovator company’s investment in the drug’s development by giving them the exclusive right to sell the drug while the patent is in effect. When patents or other periods of exclusivity expire, manufacturers can apply to the Food and Drug Administration to sell generic versions of the drug.
Generic drugs are less expensive because generic manufacturers don’t have the investment costs of the developer of a new drug. New drugs are developed under patent protection. The patent protects the investment – including research, development, marketing and promotion – by giving the company the sole right to sell the drug while it is in effect. As patents near expiration, manufacturers can apply to the FDA to sell generic versions. Because those manufacturers don’t have the same development costs, they can sell their products at substantial discounts. Also, once generic drugs are approved, there is greater competition, which keeps the price down. Today, almost half of all prescriptions are filled with generic drugs.
Generic drugs are held to the same rigid standards as the innovator drug, as dictated by the U.S. Food and Drug Administration. Today, more than 50 percent of U.S. prescriptions are filled with generic drugs.