For the many Americans who struggle to afford the cost or co-pay of brand name drugs, the introduction of generic drugs into the pharmaceutical industry helped immensely. While it’s true that these Americans are grateful for these generics, the question remains: what is the reasoning behind such a sizable price disparity between branded drugs and their generic counterparts?
In order to answer that question, one must first understand the drug patent process. This process is often drawn out to great lengths as it’s both expensive and complex in nature. The companies developing these drugs spend billions in research and sometimes won’t even be able to get their product into pharmacies. Without protection from any patent, these drug manufacturers wouldn’t be able to charge the ridiculous prices they charge today. Inability to charge that ridiculous amount means that these manufactures will fail to ever recoup their research and development investment. Unfortunately, with less funded research, the world is worse off from a medical perspective.
In 1984 though, the United States government stepped in with the Hatch-Waxman Act. This act allowed for generic drugs to compete against their name brand counterparts in a much easier manner as a result of regulatory approval. Some described this approval as a ‘free ride’ as the generic manufacturers no longer had to conduct preclinical and clinical trials to determine their drugs’ effectiveness. These drugs still needed to be proved as bioequivalent to the branded drugs, but this was much simpler to accomplish allowing for generics to flood the market at a much more accelerated rate with even lower prices.
There have been instances of these generics failing to be bioequivalents, though. Some patients have switched from one drug to another and have claimed to observe different side effects. There are also countless manufacturing issues with both generics and branded drugs as well. One of the most important things to note when it comes to generic drugs are their classes. The first are authorized generics, or generics manufactured by the brand name drug’s manufacturer. The second are pure generics, which are developed as a result of expired branded patents and the Hatch-Waxman Act.
These authorized generics often stump the pure generics in clinical outcomes, quality control and even more consistent availability. For patients with chronic use drugs, this can be a game changer. Unfortunately for these patients, generics often can take months or years to develop and bring to market. With patents being awarded for 20 years and drug companies doing everything in their power to extend them, it can be a long battle. Luckily, United States’ law allows for these patents to be challenged by competitors. When successfully challenged, generics can enter the market much faster and even receive their own exclusivity period as a generic.
For more information regarding the differences between branded drugs and generic drugs, be sure to check out the infographic featured alongside this post. Courtesy of Rubin Anders.