Generic Drugs Cost Much Less Than Brand Name Drugs
A drug manufacturer invests money to develop new medications. This process costs time and money to do the research and clinical trials. This is a large investment and generic drugs do not have that expense attached to them. After the drug is approved, the company holds a patent on that drug.
The patent has a time limit placed on it. Patents are effective for different lengths of time in different places. When the patent is expired, the same drug in generic formula can be made by other pharmaceuticals manufacturers.
All generics are required to have the same ingredients the original formula contained. Requirements are put in place by the Federal Drug Administration. A generic version must contain the same or nearly the same active ingredients as the original brand name does.
The lower cost of generic drugs can be attributed to two factors. In the first place they are a copy of the brand name original. Secondly, several companies are allowed to make them.
Where competition exists, price goes down. The generic producers compete for the consumer's dollar and it keeps prices low. It is only natural for a consumer to buy the cheaper product as long as the quality is maintained.
Generic drugs can be manufactured cheaper in some countries. India is one example. It is because the workers are paid much less in wages than workers in the United States.
A new law was signed into effect last March 23, 2010. The President gave the FDA the responsibility of approving all generic drugs before they can be marketed. The original producer is given a patent that is good for twelve years. After that time period of exclusive rights, the generic can be marketed to the public. This is the Patient Protection and Affordable Care Act.
Consumers in the United States buy more generics than people in any other single country. As soon as a patent expires on any brand name pharmaceutical, it can be made as a generic. Those medications have captured 78% of the market currently. This will have a huge impact on the market for all medications sold in the US.
All pharmaceuticals cost a lot of money to produce safely. Advertising costs add to the total price. The ads we see on TV are all expensive. In order to support this high expense, the drug manufacturers must be making a large profit.
This advertising does not mention that generics are made in India at a fraction of the cost for them to be made in the USA. The cost of advertising is factored into the price. Drugs are made safely in India in spite of the implications that drugs from overseas may pose a hazard to your health.
In actuality, the laws in India are very stringent. The death penalty is imposed on any drug company that makes unsafe generic drugs. This death penalty covers any manufacturing of harmful drugs or any that do not contain ingredients that are supposed to be in them. This is a huge incentive to safe production.
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