Generic Drugs - What Are They? by Allen Weiss, MD, CEO & President

Dr. ALlen Weiss, MD, MBA, FACP, FACR

March 1, 2008 - Do you take any medicines on a daily basis or episodically? Are these generic or brand name drugs? Is there a difference in quality? Why is there typically a difference in price? Can you add value (save money) while getting the same quality? How did generics evolve? All interesting questions which I'll try to answer in the following paragraphs.

Generic drugs account for 63% of all U. S. prescriptions, according to a recent issue of the New England Journal of Medicine, and save patients an estimated eight to ten billion dollars a year at retail pharmacies. When you add the cost savings for hospital pharmacies, the savings to the consumer is even greater. In this time of rising medical costs, all savings are important.

Generic drugs are equivalent to the brand name in dosage, safety, strength, and quality but are generally less expensive than brand name drugs. Pharmaceutical firms who had significant costs in research and development of the medicine produce the brand name drugs. The pharmaceutical firm is appropriately rewarded by having a twenty-year patent for the expensive development costs and risks. When the patent expires, other companies are allowed to sell equivalent medicines. The generic pills cannot be exactly like their brand name counterparts due to the patent laws, with the only differences being in appearance, i.e., color, shape, size or taste. There is absolutely no difference how the medicines work or their efficacy.

The Food and Drug Administration (FDA) approval process insures that generic drugs are as good as the brand name version. They are “bioequivalent,” which means they work just as well as the original medicine. These generics are prescribed for the same conditions, have the same purity, and are manufactured under the same strict standards as the originals.

Over the next three years about 110 commonly prescribed drugs will be available generically. Estimates of savings to consumers are as high as 50 billion dollars per year. Is this good or bad for health care? Some argue that research and innovation will by stymied by the lack of profitability or rewards for pharmaceutical firms willing to take the risks. Others state that the cost of care is rising so fast that the country will spend too much on health care and subsequently fall behind in the global economy. Probably both statements are true. Allowing enough profit so that pharmaceutical firms will take the risk for development of new medicines, while avoiding a financial burden on the consumer, is the difficult and narrow road that should be followed.

Interestingly, many pharmaceutical firms will make their own generic drugs that allow these companies to retain some of the profits from the generic sales while insuring the quality is equivalent. This smart compromise encourages sustainability.

Overall, adding value to your health care is to your benefit. Being educated about the similarities and differences between generics and brand name drugs is important to your health. Hopefully this synopsis helps in this understanding.

Dr. Allen Weiss is CEO & President of the NCH Healthcare System. He is board certified in Internal Medicine, Rheumatology and Geriatrics, and was in private practice in Naples, Florida from 1977 - 2000. Dr. Weiss is active in a variety of professional organizations and boards, and has been published in numerous medical journals, including the American Journal of Medicine and the Journal of Clinical Investigation.