Generic Drugs: What You Need to Know
Q: Why are generic drugs less expensive?
A: 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, other manufacturers can apply to the FDA to sell generic versions. Because those manufacturers don't have the same development costs, they can sell their product 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.
Q: Are brand-name drugs made in more modern facilities than generic drugs?
A: No. Both brand-name and generic drug facilities must meet the same standards of good manufacturing practices. The FDA won't permit drugs to be made in substandard facilities. The FDA conducts 3,500 inspections a year to ensure standards are met. Generic firms have facilities comparable to those of brand-name firms. In fact, brand-name firms are linked to an estimated 50 percent of generic drug production. They frequently make copies of their own or other brand-name drugs but sell them without the brand name.
Q: If brand-name drugs and generics have the same active ingredients, why do they look different?
A: In the United States, trademark laws do not allow a generic drug to look exactly like the brand-name drug. However, a generic drug must duplicate the active ingredient. Colors, flavors, and certain other inactive ingredients may be different.
Q: Does every brand-name drug have a generic counterpart?
A: No. Brand-name drugs are generally given patent protection for 20 years from the date of submission of the patent. This provides protection for the innovator who laid out the initial costs (including research, development, and marketing expenses) to develop the new drug. However, when the patent expires, other drug companies can introduce competitive generic versions, but only after they have been thoroughly tested by the manufacturer and approved by the FDA.
Q: What is the best source of information about generic drugs?
A: Contact your physician, pharmacist, or insurance company for information on your generic drugs. Also, visit the FDA Web site at www.fda.gov/cder/ogd/.