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Generic and Brand drugs

Understanding Generic and brand drugs

 Generic drugs are copies of brand drugs

Generic drugs are copies of brand-name drugs that have exactly the same dosage, intended use, effects, side effects, route of administration, risks, safety, and strength as the brand drug. In other words, their pharmacological effects are exactly the same as those of their brand-name counterparts.

When a pharmaceutical manufacturer develops a new drug, it obtains a patent for that drug. The patent protects the developer’s investment in developing the drug, and no one else can legally sell the exact same drug for a period of time. It will be protected for up to 17 years. This new drug is called brand drug.

Once that patent-protected time has passed, any other company can manufacture and sell a drug with the same ingredients as the branded one. This copied drug is called generic drug. The US Food and Drug Administration (FDA) considers a generic drug to be “identical, or bioequivalent, to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use.”

An example of a generic drug, one used for diabetes, is metformin. A brand name for metformin is Glucophage. A generic drug, one used for hypertension, is metoprolol, whereas a brand name for the same drug is Lopressor.

 The Differences Between Generic and Branded Drugs

Many people become concerned because generic drugs are often substantially cheaper than the brand-name versions. They wonder if the quality and effectiveness have been compromised to make the less expensive products. The FDA requires that generic drugs be as safe and effective as brand-name drugs and work as fast as the original brand-name products.

That patent-protected drug (brand drug) is the innovator drug. When we purchase it, we are also paying for the research costs. Those costs can make drugs very expensive for us to purchase. The developer considers much of the price a way to recoup its development costs.

Actually, generic drugs are only cheaper because the manufacturers have not had the expenses of developing and marketing a new drug. When a company brings a new drug onto the market, the firm has already spent substantial money on research, development, marketing and promotion of the drug. A patent is granted that gives the company that developed the drug an exclusive right to sell the drug as long as the patent is in effect.

Also, “bio”equivalent means only that the active ingredients need to be the same. U.S. Trademark laws require the drugs to look different. Sometimes, generic versions of a drug have different colors, flavors, or combinations of inactive ingredients than the original medications.

There have been problems reported by people who changed from the branded drug to its generic, and vice versa. In most cases the problems seem to stem from the variation in the inactive ingredients. Others seem to emanate from the amount of active ingredient included in the different version. Adverse reports are rare.

If you have an insurance plan that covers prescription drugs, you may be surprised to know that some branded drugs will actually cost you less from your pocket than generics do. Health insurance companies negotiate pricing with drug manufacturers and drug sellers, occasionally resulting in more favorable pricing for their insured customers for branded drugs. Your insurance company maintains a list of preferred drugs, called a formulary that helps you understand pricing. If the choice is not clear, check with your insurance company to determine whether the branded or generic will cost you less.

 Big brand drug makers are pursuing the growing generic markets

Some big drug makers are pursuing a growing consumer in emerging markets like Eastern Europe, Asia andLatin Americawhere many people pay out of pocket for their medicines but often cannot afford expensive brand-name drugs.

And, in some emerging markets, where the fear of counterfeit drugs or low-quality medicines runs high, consumers who can afford it are willing to pay a premium for generics from well-known makers, industry analysts said. These products are known as company-branded generics, or branded generics. They carry the name of a trusted local or foreign drug maker stamped on the package, seen as a sign of authenticity and quality control.

While drug sales in developed markets like North America have low single-digit annual growth, emerging markets, includingIndia,China,RussiaandBrazil, have growth in the midteens. As a result, some drug makers are pursuing a two-tiered strategy in developing markets: selling their own lines of more expensive name-brand products to the more affluent, as well as offering midpriced branded generic lines that include prescription and over-the-counter medicines for the broader market.

Branded generics can give prominent drug makers a way to capitalize on those markets without having to compete with no-name generic producers whose selling point is lower pricing. Company-branded generics can charge more for the promise of quality.


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April 2019
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