Generic Drugs

GENERIC DRUGS: COST EFFECTIVE ALTERNATE TO BRANDED DRUGS

A Generic Drug is a copy that is the same as a brand name drug in dosage, safety, strength, how it is taken, quality, performance and intended use. Generic simply means that the drug is not sold as the brand name, but it has the identical strength, dosage and route of administration and the same active ingredients as the brand-name drug. The use of generic drugs is now widely accepted and they are commonly prescribed by physicians and dispensed at hospitals.

While manufacturing generic drugs, the drug companies use the same active ingredients and are shown to work the same way in the body, they have the same risks and benefits as their brand name counterparts. Also, generic drugs have the same quality, strength, purity and stability as brand name drugs. It is seen that Generic Drugs work in the same way and in the same amount of time as branded drugs.

The generic drugs are less expensive as compared to branded drugs as generic manufacturers do not have the investment costs of the developer of a new drug. New drugs are generally developed under patent protection. The patent protects the investment and the associated expense, viz. research, development, marketing and promotion. When patents are nearing expiration, manufacturers usually approach the Government/Drug Control Department to sell generic versions. In the process, the consumers get genetic drugs at substantially lower costs. Both branded and generic drugs are manufactured by conforming to International standards. Brand name drugs are usually given patent protection for 20 years from the date of submission of the patent. This provides protection for the innovator of such drugs to make good the initial costs incurred by him, viz., research development and marketing expenses, to develop the new drug. Many drug companies start manufacturing generic drugs once the patent licence expires for a branded drug.

The physician plays a vital role to determine whether his patient needs a branded drug or generic drug. This is because a generic substitution may not be appropriate in certain circumstances where only a branded drug would be suitable for the patient. There are only rare circumstances where substituting a generic drug for a brand name product (or vice versa) may not be appropriate for a particular patient. For some patients, generic substitution may be inappropriate due to reactions to inactive ingredients or problems with the pill shape, colour or related characteristics. Patients should become assertive and insist upon the doctors to prescribe generic drugs if available, so that the patient would get the product at the best possible price. Pharmacists also play a vital role in educating the doctors about the availability of generic drugs. Thus the right medication could be given to the patients at the best possible price.

Generics are as good as branded drugs and in view of third party administrators having entered in the Indian health care scenario, the patients are sanctioned only the minimum amount when hospitals send authorizations for approval of treatment. Thus if generic drugs are bought by the patient, the patient may not lose money by going in for branded drugs, which are too costly. Health care costs continue to rise. Therefore, consumers, providers and policymakers need to assess the best way to keep health care affordable without adversely affecting access to quality care. With prescription drug (branded drug) costs serving as a major contributor to cost escalations, generic drugs offer an important tool for reducing the rate of growth in overall health expenditure.

Generic drugs play an important role in health care and the availability of generic drugs reduces the monopoly and oligopoly powers of the patent holder. The Government may also impose compulsory licensing so as to make available the much needed generic drugs. It is seen that many countries do not have the technological capability for manufacturing and supplying generic drugs even if the laws of those countries permit them to do so.

Brand name and generic pharmaceutical industries are global in nature. Consequently, no serious attempt has been made to integrate them. Many countries obtain their ingredients like fine chemicals from other countries. Smaller countries that have a few generic industries are not able to operate due to limited opportunities. Such countries export their generic produce to other countries to survive in the industry. It has also been found that prices fall substantially once the drugs are off the patent, if there are generic producers. When more generic producers enter the market, more is the fall in the prices.

In this context, it may be of interest to note that in Brazil, right combination of policies in the health sector and intellectual property rights enabled the country to tackle the AIDS crisis effectively. Thus development of generic industries would not only help one country but other countries too. This would facilitate meeting the internal demands and exporting the surplus. Generic manufacturers should be permitted to supply drugs to the people at cheaper rates, which will reduce the health care cost drastically.

Differences between a brand name drug and a generic drug:

Advantages of Generic Drugs:

The generic drugs often cost the consumer considerably less than brand name drugs.

The use of generic drugs can add up to marked savings for everyone in general but particularly for the elderly who generally take more medications than the young and have less available income for such items.

Generic drugs do not have unfavourable effect on an individual.

The pharmaceutical life cycle has four phases: research,development, patentee commercialization and generic commercialization.

When the product is in the research mode, a research institution invents a new drug. Then a patent application is filed to preserve rights. When the institution starts pre-clinical and clinical testing of the drugs, the development phase begins. In the patentee commercialization phase, the innovator (patent holder) begins selling in at least one country. In this process, doctors, patients, hospitals, public health agencies and insurers get involved. Thus generic commercialization commences when the patent expires in any given country and genetic companies start to sell at lower prices. In a country where a new product is not patented, generic competition will begin immediately, e.g., AIDS drugs. Intellectual property is a vital factor involving research and patients. Without patents, research and development would be reduced. Without generics or other price constraints, access to medicine would be impaired.

Prepared by Generic Pharmacy. Updated date: May 09, 2010