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Generic Drugs
Does Inexpensive Mean Cheap?

by Robert S. Dinsmoor

People with diabetes often take multiple drugs, including blood-glucose-lowering pills or insulin, blood-pressure-lowering pills, and cholesterol-lowering pills. The cost of all these medicines can really add up. One way to save money on medicines is to take generic, or no-brand, versions of them if generics are available. Yet some critics have given generic drugs a bad name, implying that they’re somehow inferior. Are generics substantially different from brand-name drugs? If not, why aren’t there more of them, and why aren’t they used more often?

What are generic drugs?

All drugs—whether prescription or over the counter—have a nonproprietary name (also called a generic name, it’s the name of a drug that’s not subject to being trademarked), but only some are sold as generic drugs. If and when a drug can be sold as a generic depends on when the patent (or patents) held by the developer of the drug expire. A patent gives the drug developer the exclusive right to market the drug under its brand name for a certain amount of time.

Glucophage, for example, is Bristol-Myers Squibb’s brand of the drug whose generic name is metformin. For years, Glucophage was the only brand of metformin on the U.S. market, but in 2002, the patent on metformin ran out, and other pharmaceutical manufacturers gained approval from the U.S. Food and Drug Administration (FDA), the government agency responsible for regulating the pharmaceutical industry, to market their own forms of metformin. Now there are at least 15 manufacturers approved to sell generic forms of metformin on the U.S. market.

Generic drugs usually sell for a fraction of the cost of brand-name drugs. Generic metformin, for example, costs about two-thirds as much as the brand-name product. The price drop that occurs when generics enter the market is attributable to several factors including competition and the lower overhead of generic-drug manufacturers. When companies compete with each other to sell the same product, market theory argues that prices will tend to go down. Manufacturers of generics are also able to offer lower prices because, unlike the developer of the original brand-name drug, they do not have to recoup large investments in research and development or engage in expensive marketing and advertising campaigns.

It takes more than just a patent expiring, however, for a generic drug to come to the market. The manufacturer of the generic has to prove to the FDA that its product is bioequivalent to the brand-name drug it is copying. In other words, it must scientifically demonstrate that its drug performs in the same manner as the original, brand-name drug.

One test of bioequivalence is to measure the time it takes the active ingredient in the drug to reach the bloodstream and its concentration in the bloodstream in 24 to 36 healthy volunteers. This shows the rate and extent of the generic drug’s absorption. These characteristics are then compared with those of the original drug.

The FDA mandates that generic drugs must have the same strength and the same dosage form (such as tablets, patches, or liquids) and must be administered in the same way (such as by pill or by injection) as the original, brand-name drug. The firm producing the generic drug must document its manufacturing steps and quality control measures for FDA review, and the FDA often inspects the manufacturing site to make sure it can produce the drug safely and reliably.

“Many people think that brand-name drugs are superior,” says Stephen M. Setter, Pharm.D., Assistant Professor of Pharmacy Practice at Washington State University College of Pharmacy in Spokane, Washington. “Yet most people in the medical field would say that the brand-name and generic versions are equivalent. I think, with billions of dollars at stake, the pharmaceutical industry has planted the thought in people’s minds that, just as with generic food, there’s a difference in quality—but that’s not true for drugs.”

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