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Generic Drugs and Prices in the United States Research Paper


The issue of the significance and viability of generic medicines is being intensely debated in medical as well as political platforms given the massive difference in prices between generic and brand name drugs. The most noteworthy feature of the issue emerges from the fact that pharmaceutical companies invest millions of dollars in researching the effectiveness of new drugs and patenting them so that other companies do not use the name for their benefit. However, the patent lasts only for a given period (generally 10 years) after which other companies are free to make generic medicines with the same ingredients, albeit at much lower prices, as they do not incur costs on research, patenting, marketing and promotion. In essence, any drug that is made with the same active ingredients and with the same properties can be accepted as a substitute for the given brand name drug and can be prescribed by medical practitioners as a therapeutic equivalent. It is in this context that this paper makes a detailed analysis in determining the factors and chemistry that is involved in making generic brands less expensive in comparison to brand name drugs.

Main Body

It is important to note that it is possible to make generic medicines only in the context of brand names whose patent has expired. The production of generic medicines has been constantly increasing over the last few years given the massive cost savings they entail for both the producer and the patient. They prove to be cheaper by 20-90 percent in comparison to the brand name drugs having the same ingredients and properties (Dunne et al). In essence, generic drugs are not hazardous in any way and can be used as safe alternatives for brand name drugs (Mitchell). They prove to be less costly for both the government and consumers, which is apparent from the fact that they comprised 70 percent of the total medicines sold in the US in 2016. Consequently savings of over $800 billion accrued on account of the practice in the last ten years (West). In the US and most parts of the world, generic drugs are sold after the patent on the equivalent brand name drug expires. Hence, there are massive savings for consumers.

Generic drugs are approved by the FDA in the US only if they have the same active ingredients and require to be given in the same dosage and through the same mode of administration as the brand name drug. They have to also be bioequivalent with the brand drug, which implies that they work on the human body with the same effect, without creating any hazards. In essence, generic drugs are made with the same chemistry, manufacturing, testing processes, labeling, and inspection processes as brand name drugs. The only difference is that they do not require undergoing clinical studies or animal studies as they satisfy the need to be bioequivalent with brand name drugs. Also, companies making generic medicines mostly do not add to their costs as they generally do not involve in the promotion and advertising (West).

According to Mongolian and Myrdal, it is extremely complicated and costly to develop a new drug and to get FDA approval for the same because pharmaceutical companies have to often struggle for years in researching the biochemistry of varied diseases such as cancer, malaria and viral infections to develop viable treatments for them. The drug has to be also tested for efficiency, toxicity, and other aspects of animals. Such processes continue for years and once indications emerge about the drug’s success on animals, it is tested on humans. Mongolian and Myrdal estimate that the cost of developing one new drug works out to be over a billion dollars and the development process usually takes over ten years. The high prices associated with brand name drugs are an outcome of efforts of such pharmaceutical companies to recover their investments during the period that the patent for the drug remains in force.

Vivian has provided a meaningful understanding of how to make the best of generic drugs without any involvement of risk. He asserts that upon discovery of a drug, it is identified with a chemical name that indicates its molecular or atomic properties. Upon approval of a drug, the FDA first gives it a generic name, after which the pharmaceutical company making the drug gives it a brand name. In the US, the generic name of drugs is given by the United States Adopted Names (USAN) Council. The brand name as given by the company manufacturing the given drug becomes its sole property. Consequently, a generic drug can be sold under a brand name or its generic name as given by its producer. Vivian has aptly explained the difference between generic drugs and brand name drugs by relating them with their respective chemical properties, which are depicted in the following diagram:

Chemical Name Generic Name Brand Name
N-(4-hydroxyphenyl) acetamide Acetaminophen Tylenol
7-chloro-1,3-dihydro-1-methyl-5-phenyl-2H-1,4-benzodiazepin-2-one Diazepam Valium
4-[4-(p-chlorophenyl)-4-hydroxypiperidino]-4’-fluorobutyrophenone Haloperidol Haldol
5-thia-1-azabicyclo [4.2.0]-oct-2-ene-2 carboxylic acid, 7-[(aminophenylacetyl)amino]-3-methyl-8-oxo-, monohydrate Cephalexin Keflex
dl-threo-2-(methylamino)-1-phenylpropan-1-ol Pseudoephedrine Sudafed
6-methoxy-2-[(S)-(4-methoxy-3,5-dimethylpyridin-2-yl)methylsulfinyl]-1H-benzimidazole Esomeprazole Nexium

Diagram 1: Difference between Generic Medicines and Brand Name Drugs. Source: Vivian, Eva M. Overview of Generic Drugs and Drug Naming.

In the US, the FDA has set minimum standards for generic drugs in terms of the performance and quality that is associated with brand name drugs. The US Food and Drug Administration has held that all generic drugs approved by it bring the same outcomes as brand name drugs. It has cited research in stating that “A study evaluated the results of 38 published clinical trials that compared cardiovascular generic drugs to their brand name counterparts. There was no evidence that brand name heart drugs worked any better than generic heart drugs” (US Food and Drug Administration). The fact remains that the FDA does not permit a difference of more than 3.5 percent in the absorption results of generic drugs about their brand name counterparts. The difference in chemical properties to the extent of 3.5 percent is acceptable as it does not make any difference in the outcome of the drug. At the same time, just because generic drugs are cheaper it does not mean they are of lower quality. They are cheap only because manufacturers save on research, advertising, and promotion costs. Khandelwal argues that it is because of marketing and promotion activities of pharmaceutical companies producing brand name drugs that branded drugs are popular. On the other hand, generic drugs are sold in keeping with their scientific names, which are not commonly known to people. However, the low prices of generic drugs are gradually attracting larger numbers of people who have no issues in making the extra effort to locate them based on their ingredients.


It is apparent from the analysis that generic drugs have come to stay in providing consumers with options to buy drugs at much lower prices than brand name drugs. In making new drugs, pharmaceutical companies have to incur heavy costs on research and development of the product in ensuring that they have no adverse consequences to human beings. Such efforts involve research over long periods on animals, after which they are tested on human beings to determine their effectiveness in relieving and curing the given diseases. Once the properties of a brand name drug are ascertained in terms of its efficacy in curing a disease, the pharmaceutical company patents the drug so that it enjoys the sole rights to sell it. In addition to the costs incurred on R&D, the brand owner invests heavily in marketing and promotion, which is why such drugs tend to be priced high. However, once the patent for the brand name drug expires (after about 10 years) it can be produced by other companies under different names but with the same ingredients at much lower costs, thus allowing them to sell the drug at lower prices than the brand name drug. In the US, the FDA has no objection in approving generic drugs as long as they meet the same requirements as to brand name drugs. It thus emerges that there is no difference in the efficacy of generic drugs except that they are available at lower prices only after the patent for the drug has expired.

Works Cited

Dunne, Suzanne, et al. “A review of the differences and similarities between generic drugs and their originator counterparts, including economic benefits associated with usage of generic medicines, using Ireland as a case study.” Bio Med central. Web.

Khandelwal, M. Linkedin. Web.

Mitchell, Heidi. The Wall Street Journal. Web.

Mogalian, Erik., and Myrdal, Paul. Scientific American. Web.

US Food and Drug Administration. . FDA. Web.

Vivian, Eva M. Merck Manuals. Web.

West, Robert L. Office of Generic Drugs. Web.

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IvyPanda. 2020. "Generic Drugs and Prices in the United States." September 29, 2020. https://ivypanda.com/essays/generic-drugs-and-prices-in-the-united-states/.


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