Why are Generic Medicines cheaper?

Generic medicine is defined as a substitute or a bioequivalent of a branded one with respect to pharmacokinetic and pharmacodynamic properties. Why is it sold cheaper than the brand name medicines?

The primary reason for cheaper price of generic drug is that their manufacturing companies don’t have much overhead cost. Therefore they can offer these at cheaper price and still maintain their profitability. The availability of generic medications has made life much easier than ever before, now people can buy cheaper and effective medications in the form of this.

1. Brand name companies invest lot of money in research and development of any new drug.

2. Money is also spent in getting it approved by the government as safe and effective.

3. Once approved by the government, lot of money is spent on marketing the product through all kinds of media (print, television, internet etc).

A generic medicine manufacturer has enough information from the studies done by the brand manufacturing company, so they don’t have to spend money on research work. By claiming their drug as a bioequivalent, they don’t have to spend money to put them on clinical trials. Also, due to extensive marketing of the innovator brand, they just claim their product to be equivalent to it and benefit from the market value of the brand name. Since these s manufacturers don’t incur much cost in the whole process of manufacturing, they are able to sell it off at much lower cost than brand name s. Now the question arises, if the brand name companies invest so much money in creating these medicines, why don’t they protect their rights or why don’t they make it patent. How can generic medicines be produced?

Generic medicines can be legally produced in the following conditions

1. If the patent of the brand manufacturer has expired.

2. for drugs which never held patents.

3. If the manufacturing company certifies the brand companies patents are invalid or unenforceable or will not be breached.

4. in countries where patents are not enforceable.

In the United States the FDA carries the responsibility to make sure that generic drugs are safe and effective. This process began in 1960s where generic manufacturers had to prove that it is bioequivalent to the innovator brand. The parameters for approval of this are same as its innovator brand. They are cheaper and can save patients and insurance companies thousands of dollars without compromising the quality of care. Mature populations and rapidly rising process for treatments are causing governments all over the world to look again at the sustainability of their healthcare stipulation. From the economic point of view generic medicines provide cost-effective methods of calculating the fastest growing budget item in healthcare, i.e. pharmaceuticals and mainly these medicines. More and more pharmaceutical companies are continued to work in order to be able to provide this of good quality and also to develop affordable solutions for pharmaceutical care.