Drug Policy

What are the Generic Drugs?

Generic Drug is that kind of drug, that has been manufactured and given without any patent protection (drug policy). Though this kind of medicine could have a patent on its formula, the copyright would not exist on the active ingredient in it. For the medication to be a generic one, it needs to include the same active ingredients as are present in the original formulation.

Why Are Generic Drugs Cheaper Than Their Brand Name Counterparts?

Brand-name drugs are much more costly than generic medications for the following reasons:

  • To come out with a brand name drug that is new, it needs a great deal of time (about 10 to 15 years or more) and money (could be anywhere in the range of millions of dollars, to even billions of dollars).
  • Promoting and marketing brand name drugs costs a lot for marketing and advertising.

All these expensive costs have to be compensated by the manufacturer of these brand-name drugs. And this is precisely why patented drugs are so costly.

But It Is Not the Case with Generic Drugs

When any generic drug hits the market, because of the competition in the market, both the generic drug, as well as its brand name counterpart becomes available at a lesser price.

But, the time at which a generic drug becomes available in the market, varies. For instance, in the USA, protection for as much as 20 years is given to drug patents. But, the truth is that these patents are applied for, much before clinical trials even start. As such, the effective life of these patents is only between around 7 – 12 years.

According to estimates that have been made by various sources, the average cost involved for a brand-name drug company, to discover and test a new drug, one that contains a new chemical entity, could be as high as US $800 million. But in a book by Merrill Goosier, titled ‘The 800 Million Dollar Pill’, the actual costs involved for the production of a brand new drug are estimated to be around US $100 – $200 million.

Strategies Adopted By Brand Name Companies

To prevent competition from generic drugs and to extend their exclusivity in the market, over the years, big brands have used and are continuing to use many strategies. These include the likes of:

Aggressive litigation, to extend or preserve their patent protection for their drugs. Critics call this process ‘ evergreening.’

Novel pharmacological compounds have patents issued very early on in the development process of the drug. And because of this, by the time the drug is released into the market, the patent for the drug has almost expired. So, these big brand drug companies, at some time later on in the process of the life of the drug, seek new patents and these are sought for the manufacture of very specific forms of the drugs. Such as the likes of single enantiomers of drugs, which can exist in both ‘right-handed’ as well as ‘left-handed’ forms, a definitive hydrate form of the salt of the drug or various inactive constituents of the salt of the drug. If these patents are granted, the patent clock is reset on these drugs. It is these kinds of patents that later on target the invalidation of the generic drug.

Generic Drugs Are Also Cheaper Because:

  • To produce generic drugs, there is no need for any new kind of production technology. Existing technology is made use of, by using reverse engineering of the known components of the drug.
  • No new formula is required to be used in the production of generic drugs.
  • Generic drugs do not need any advertising to be done, as these are equivalent to branded medicines. The fact is, generic drugs get the benefit done by the big name brands, by way of advertising and marketing, including the likes of free sample distribution, presentations done by medical representatives, and all sorts of media advertising.
  • Generic drug manufacturers also do not have to go to the extent of proving the efficacy and the safety of these drugs of theirs, by way of conducting clinical trials, as this has already been taken care of by the big brand name drug manufacturers.

This is the reason why generic pills are far cheaper and extremely popular than their counterparts manufactured by big-name drug companies. The truth is that generic drugs save millions of patients, as well as insurance companies, a great deal of money.