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Generic Drugs

Does Inexpensive Mean Cheap?

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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.”

Even though they are equivalent, however, generics and brand-name products cannot necessarily be freely interchanged. While the active ingredients may be identical, other components of the drug could make one pill behave slightly differently in the body than another pill. In particular, Dr. Setter says he would be cautious about substituting a generic drug for a brand-name drug that has a narrow therapeutic index—that is, a drug in which there isn’t much difference between a therapeutic dose and a potentially toxic one. These might include certain thyroid drugs, the blood thinner warfarin (brand name Coumadin), and the heart drug digoxin (Lanoxin). In the case of these drugs, small differences in the blood levels of these drugs can have harmful consequences.

Similarly, if a person is already taking a given drug, Dr. Setter would be cautious about switching that person from a brand name to a generic, or from a generic to a brand name, or from one generic to another. Again, the small differences between these different products could cause problems.

Bringing generics to market

The pharmaceutical industry can be a very lucrative business, but drug development is time-consuming, risky, and expensive. In 2003, the Tufts Center for the Study of Drug Development estimated it costs roughly $897 million to bring a new drug to the marketplace and perform postapproval safety studies. (Some consumer groups have criticized this figure as being inflated, claiming that it fails to take into account federal tax breaks and questioning the Center’s independence because it receives more than half of its budget from biotechnology and pharmaceutical companies.) All potential new medicines must be tested extensively in animals. If all goes well and the drug appears safe and effective in animals, it can then undergo large (and costly) clinical trials to prove that it is safe and effective in humans. To help drug companies recoup their investment, U.S. law grants drug developers a 20-year patent on a drug, during which time no other company can sell that drug. (Sometimes there is a lag between the time the patent is granted and the time the drug is first marketed, narrowing this window of opportunity.)

Although enabling drug companies to develop new drugs is important, so is enabling consumers to buy them. To that end, Congress in 1984 passed the Drug Price Competition and Patent Term Restoration Act, also known as the Hatch–Waxman Act, to speed up the entry of generic drugs onto the market once all the originating company’s patents on that drug have expired (or been successfully challenged in court). (Some drugs have multiple patents that cover different aspects of the drug, including routes of administration and the conditions the drug is approved to treat.) The act says, among other things, that instead of replicating expensive clinical trials on the same drug, manufacturers merely have to show that their drugs are bioequivalent to the pioneer brand-name drug. Under this law, the first company to market a generic copy of a given drug is also given a 6-month, “competition-free” period to market the drug. According to the FDA, this act essentially created the generic drug industry: Two decades ago, generics made up only 12% of prescriptions; today, they comprise about 51% of all prescriptions.

However, there was an unintended hitch in the law that made things difficult for generic drug manufacturers. Once a company had requested FDA approval for its generic version, the manufacturer of the original, brand-name drug could sue for patent infringement, and the FDA was not allowed to make a decision for 30 months while the patent infringement case was being settled in court. To make matters worse for would-be manufacturers of generic drugs, the brand-name manufacturer could use multiple, consecutive patent lawsuits to stall the generic’s approval even longer. In some cases, to prolong its monopoly on sales of a drug, the maker of a brand-name drug would actually pay another manufacturer not to bring its generic to market.

The underlying intent of the Hatch–Waxman Act was to save health-care dollars by speeding generic drugs to the marketplace, but it became clear that because of these legal loopholes, it wasn’t having the intended effect. On June 12, 2003, Tommy G. Thompson, then Secretary of the U.S. Department of Health and Human Services, announced new FDA regulations to help close these loopholes, streamline the process, make generic drugs available to consumers, and save money. According to the FDA, the average brand-name prescription drug costs about $72, while generic versions average about $17. These revisions could save consumers an estimated $35 billion over 10 years. Central to the regulations was limiting the original brand-name company to only one 30-month delay of a generic drug’s approval for resolving the patent challenge.

According to Dr. Setter, drugs sometimes become available as generic drugs outside the United States before they become available within the United States. In fact, some U.S. residents travel to Canada or Mexico to buy medicines or buy medicines from foreign countries over the Internet because drugs tend to be less expensive outside the United States. However, it is illegal to import prescription medicines from outside the United States. (Some drugs that are manufactured abroad are approved for sale in the United States by the FDA because they meet the same standards as American-based products. An example is insulin made by the Danish company Novo Nordisk Pharmaceuticals, Inc.) The FDA also warns that these drugs may be unsafe because other countries may not have the same strict regulatory guidelines as the FDA. Yet these laws are difficult to enforce, and many people continue to buy drugs this way.

Competing priorities

Consumers and medical professionals alike get mixed messages regarding brand-name and generic drugs. On the one hand, drug companies spend huge sums of money promoting their newest—and therefore costliest—drugs. On the other, managed-care companies offer incentives to doctors to prescribe generic drugs and to consumers to buy them.

Drug company promotion may take a number of forms, including drug advertisements directed both to medical professionals and consumers, ghostwritten journal articles paid for by drug companies, journal supplements sponsored by drug companies, and medical meetings sponsored by drug companies, in which the company’s own product tends to take center stage. Ads aimed directly to consumers can be particularly effective because consumers often pressure their doctors to prescribe widely promoted—and expensive—drugs without realizing that there are equally effective, less expensive drugs (either generic or brand-name) that would treat their condition just as well. Similarly, pharmaceutical representatives often give free samples of drugs to doctors to pass along to their patients and, again, these tend to be expensive brand-name drugs rather than inexpensive generic drugs.

“The pharmaceutical industry is a big advertising and promotional machine that pushes the latest, greatest drugs—and, in some cases, tries to put out negative marketing about older drugs that are less expensive, including older drugs that are available as generics,” observes Kenneth A. Krutt, M.D., Senior Staff Internist at the Lahey Clinic–Arlington and Assistant Clinical Professor of Medicine at Tufts University School of Medicine in Boston, Massachusetts.

According to Dr. Krutt, generic drugs are often prescribed to save money. “HMOs tend to have incentives for doctors to write more generic prescriptions unless the brand-name version is warranted for health reasons,” he says.

Often, there are financial incentives for consumers as well: In many health insurance plans, the co-payment for generic drugs is substantially lower than for brand-name drugs.

Generic diabetes drugs

Some of the drugs prescribed to treat diabetes are available as generics, including the following:

  • Acetohexamide, a little-used first-generation sulfonylurea, is available in generic form only. (First-generation sulfonylureas have a greater risk of drug interactions.)
  • Tolazamide (Tolinase), also a first-generation sulfonylurea, is available in generic form.
  • Glipizide, which is sold under the brand names Glucotrol and Glucotrol XL, is also available in generic form.
  • Glyburide, sold as DiaBeta, Micronase, and Glynase, is also available as a generic.
  • Glimepiride (Amaryl) is available in generic form.
  • Several generic versions of the drug metformin (previously sold only as Glucophage or Glucophage XR) are now available. The combinations of metformin and glyburide (Glucovance) and metformin and glipizide (Metaglip) are available as generic drugs. The combinations of metformin and rosiglitazone (Avandamet), metformin and pioglitazone (Actoplus Met), metformin and sitagliptin (Janumet), and metformin and repaglinide (PrandiMet), however, are still sold only as brand-name products.

The diabetes drugs not yet available as generics include the following:

  • Neither of the alpha-glucosidase inhibitors (drugs that slow the breakdown of carbohydrate in the small intestine), acarbose (Precose) and miglitol (Glyset), is available in generic form. The patent on Precose runs out in 2007, and the patent on Glyset expires in 2009.
  • Neither of the currently available thiazolidinediones (drugs that increase insulin sensitivity), rosiglitazone (Avandia) and pioglitazone (Actos), is available as a generic. The various patents on Avandia run out in 2008, 2015, and 2017, and the patents on Actos expire in 2011 and 2016.
  • Neither repaglinide (Prandin) nor nateglinide (Starlix) (both of which spur the pancreas to release more insulin quickly after meals) has a generic form. Prandin’s patents expire in 2006 and 2009, and the various patents on Starlix expire in 2006, 2012, 2013, and 2019.
  • Neither pramlintide (Symlin) nor exenatide (Byetta), two injectable drugs that were approved by the FDA in 2005 and act like hormones in the body, has a generic form. Patents on Symlin expire between 2009 and 2018, and patents on Byetta expire between 2013 and 2020.
  • The new diabetes drug sitagliptin (Januvia), first in a class of drugs called DPP-4 inhibitors (which promote insulin secretion and prevent the release of glucose when blood glucose levels are elevated), is not available as a generic. Various patents on Januvia expire in 2017, 2019, and 2022.
  • Insulin is not available in generic form. Click here to read why.

Patent dates hint at when brand-name drugs may become available as generics, but they really represent only ballpark estimates, because patent extensions and patent infringement lawsuits could delay FDA approval of generics by 30 months or more.

The right prescription

If you take a brand-name medicine for which there is an equivalent generic and you are interested in saving some money on drugs, talk with your doctor and pharmacist about the possibility of switching to a generic. They may think it’s a great idea, or they may have some convincing arguments against switching. Conversely, if you have tried both brand-name and generic versions of a drug and the brand-name version seems to work better for you, discuss this with your doctor. He may be willing to write “Do not substitute” on the prescription. (Depending on the laws of your state, your pharmacist may be empowered to offer you the generic equivalent of a brand-name drug. To prevent such a substitution, your physician may need to write “Do not substitute” or something similar on your prescription.)

How do you know whether you’re taking the generic or brand-name version of a drug? It’s a good idea to know both the generic and brand names of the drugs you take—even though the generic name may be much harder to pronounce. “If someone has been taking Zantac for years for heartburn and they’re switched over to ranitidine, they may think the name change means they’re taking a different drug—whereas in fact Zantac is ranitidine and ranitidine is Zantac,” Dr. Setter points out. Some—but not all—pharmacies also mark on the bottle if a drug is a generic. The best way to find out is to ask your pharmacist.

If you switch from a brand-name drug to a generic, don’t be surprised if your generic pill looks different from the brand-name pill. By law, generic drugs are not allowed to look like the original pill. Different generic versions of the same drug also vary in shape and color. According to Dr. Setter, if the pill looks different when your prescription is refilled, be sure to check with your pharmacist to make sure you’re getting the right drug.

For many people, generic drugs are a safe and effective replacement for costlier brand-name drugs. Check with your health-care team to see if generics are the way to go for you.

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