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TheSafePills Drug Policy

What are Generic Drugs?

Generic drugs are identical to the brand name version in safety, strength, quality, characteristics, administration, dosage form, and intended use. Generic drugs are identical in chemical formulation to their brand name equivalent and are generally sold at substantial savings from the brand name drug.

To find out if there is a generic equivalent for your brand-name drug, you may search by the brand name or for the ailment it is used to treat.
Since generic drugs contain the same active ingredients as the brand-name drugs they have the same effectiveness as the more expensive brand name drugs. The FDA, WHO and other regulating authorities require generic drugs have the same high quality, strength, purity and stability as the brand-name drug.

Not every brand-name drug has a generic drug. Drugs are protected by patents usually lasting for 20 years. The patent, which allows the company that developed the drug to recoup the cost of R & D, prohibits anyone else from making and selling the drug until patent expires. Once the patent has expired, other pharmaceutical companies are allowed to sell a generic version. Manufacturers are required to test the generic drug and receive the approval of the drug regulatory agencies before it may be sold.

Why Do Generic Drugs Cost Less Than Brand Name Drugs?

Research and development (R&D) of revolutionary new drugs requires a lot of time and is very expensive (pharmaceutical companies need to recoup the hundreds of millions or billions of dollars that has been invested). Pharmaceutical companies must pay to market and advertise new drugs.

In the United States patents protect pharmaceutical companies for 20 years, but the actual time to recoup the investment is closer to 7-12 years; because patents are in place before the drug goes to clinical trials and receives FDA Approval. It has been estimated that the average cost for research, development, and trials for radical new drugs may be as high as $800 million, but the average real cost is probably closer to $100-$200 million for brand name pharmaceutical manufacturers.

To extend the protection on their investment, pharmaceutical companies may apply for a new patent for making changes to the formulation of inactive ingredients. Critics call this ever-greening. This process prevents other pharmaceutical manufacturers from developing a generic form of the drug. If the new patent is approved, the pharmaceutical will hold the patent for another 20 years. Often these patents are targeted in litigation by generic drug companies.

Pharmaceutical companies can market generic drugs at discounted prices because:

  • Generic drugs don't require new manufacturing technology or a new formula.
  • Generic drugs are the equivalent of the brand name drugs and don't require the additional cost of marketing and advertising. Since the brand name drugs are so heavily marketed and advertised, generic drugs actually receive the benefit of the efforts.
  • Brand name companies bear the expense of proving the safety and effectiveness of the drugs in clinical testing, so manufacturers of generic drugs don't have that burden and expense.
  • Generic medications can be produced for less allowing them to be sold at substantial savings to patients and insurance companies, making them very popular.

What makes Generic Drugs Cost Less?

Creating a drug costs lots of money. Since generic drug manufacturers do not have the cost of R & D, generic drugs are usually cost less than the more expensive brand name drugs. Generic drugs have to meet the same strict standard at the name brand before it can receive approval. These standards require:

  • the generic drug must meet the same strict manufacturing regulations required for brand name drugs
  • meet the requirements for identity, quality, purity, and strength
  • the active ingredients in the generic drug must be the same as the brand name drug, however the inactive ingredients may differ
  • the drug is identical in strength, dosage, and administration
  • must have identical warnings

It is estimated consumers can save $8 to $10 billion a year if they buy generic drugs. This savings makes generic medications very popular with both insurance companies and consumers.

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