Why Do Generic Drugs Cost Less? Essay

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Introduction

The adjective “generic” may be confusing since it has several meanings, which differ significantly and thus should be used with care depending on the context. For instance, Merriam-Webster (2021) defines “generic” as something “having no particularly distinctive quality or application.” This meaning correlates with the common perception of “generic” products as lackluster, bland, and outright inferior to anything that has a unique style and features.

On certain occasions, the negative connotation of “generic” gets transferred to other applications of this word. In regard to medicine, generic drugs may be perceived as lower-quality products since they are significantly cheaper than branded counterparts. However, the actual reason behind the lower prices of generics lies in the simplicity of the research and development stage, rather than a different, less effective chemical composition.

Modern chemistry made possible the invention and consequent mass production of various drugs, including generics. According to the U.S. Food and Drug Administration (FDA, 2021), those drugs work the same as their brand name counterparts. All generic drugs must have the same active ingredient, strength, dosage form, and route of administration; in addition, the same strict manufacturing standards are applied to generics (FDA, 2021).

Therefore, brand-name drugs and properly approved generic medicines are essentially identical from the perspective of chemistry. The only significant difference between them is price — generic drugs are usually much cheaper when they reach the market (Anderson, 2019). Lower cost can serve as a valuable competitive advantage; however, patients and even medical professionals may also perceive it as a sign of worse generic drug quality compared to the original brand name product. In this regard, it is important to clarify why generic drugs cost less than branded ones and understand what marketing strategies can be used to block access to generics.

Context of Chemistry

Chemistry is a colossal subject of knowledge, which includes numerous branches and scientific disciplines. In this regard, drug invention and manufacturing fall into the subject of medicinal chemistry — the science that discovers new therapeutic chemicals and develops them into useful medicines (Walker, 2020). Therefore, the development and manufacturing process of both brand name and generic drugs is logically covered by medicinal chemistry. Furthermore, medicinal chemistry may assist in revealing the reasons why chemically identical drugs significantly differ in price.

It would be logical and plausible to assume that a federal agency such as FDA would not spread misinformation regarding the chemical similarity between the brand name and generic drugs. Therefore, the explanation of generic drugs’ cheapness in comparison to their branded counterparts is likely lying in the stage of invention, research, and development. According to Robert L. West, the former Deputy Director of the Office of Generic Drugs, the review process of brand name medicines and generics is identical from the first to the fifth stage (n.d.).

Both branded drugs and generics undergo a review of chemical composition, manufacturing process, testing stage, labeling, and inspections (West, n.d.). However, the original brand name medicine also passes the mandatory stages of pre-clinical animal studies, clinical studies on humans, and bioavailability tests (West, n.d.). These stages are necessary from the medicinal chemistry perspective since they make it possible to ensure the safety and efficacy of the new brand-name drug. In general, chemistry is based on experiments and observation, and all the stages of branded drugs’ development strictly follow the logic and ethics of this science.

On the other hand, the review process of the generic drugs ends with establishing their pharmaceutical equivalence to a branded counterpart. According to the FDA (2017), the generic drug must have the same pharmaceutically active ingredient, be in the same type of product (for example, tablet or injectable), and use the same time release technology. One can argue that these FDA requirements are aimed at evaluating the quality of a copy rather than reviewing the result of new work in the sphere of medicinal chemistry.

As such, the development of generic drugs is devoid of invention, research, and experiments since the goal of their manufacturers lies in replicating someone else’s achievements rather than creating a new product. This absence of the creative aspect does not undermine the usefulness of generic medicines — if anything, it contributes to their lucrative prices. By no means should generic drugs receive the same treatment as counterfeit clothes or cliched fiction literature, and scholarly evidence presented in the next section supports that position.

The labor of generic medicine manufacturers may be much less complicated in the chemistry context, but its result is vital for the people who cannot afford brand-name drugs. In addition, the relative simplicity of generic drugs’ approval procedure allows making a logical conclusion which explains their cheapness. Low prices for generic medicines are the result of an entirely different manufacturing philosophy in regard to medicinal chemistry. The difficult and expensive stages of research, development, pre-clinical, and clinical trials are already completed when the generic’s manufacturer submits their application to the FDA. In the end, the invention of a new brand-name drug is similar to making a discovery in medicinal chemistry, whereas manufacturing generics does not require experimenting and ultimately involves less creative thinking.

Topic Discussion

Discovering the most probable causes behind the lower generic drug costs in comparison to brand name alternatives is appealing due to several reasons. Most importantly, it makes it possible to examine whether the concerns about the connection between low prices and poor quality of generic products are evidence-based. Generic drugs are cheaper and supposedly as effective from the chemical perspective as their brand-name counterparts. However, generic products are usually not advertised and compete solely on the price, whereas major pharmaceutic companies have multiple marketing strategies at their disposal (Vokinger et al., 2017).

In addition, the topic presented an interesting case of chemistry intersection with highly relevant socio-economic issues. Prescription of generic drugs leads to substantial annual savings both for the patients and the U.S. healthcare system. For example, only in 2016 generics accounted for $77 billion in savings to Medicare and its beneficiaries (Hohmann et al., 2019). In this regard, acquiring information about generics’ chemical composition, manufacturing process, and approval procedure is important for making an informed decision as a patient or healthcare provider.

Returning to the point made in the introduction, one can claim that “generic” is a rather problematic adjective. Its meaning can differ from dismissively criticizing due to the lack of originality and quality to a simple denotation of the product not having a brand name. Generic drugs fall in the latter case since they are not lower in quality than corresponding brand name products (Anderson, 2019). From the perspective of medicinal chemistry, it is quite true that generic drugs do not possess originality. Moreover, generics are intended to be cheap yet correctly manufactured copies of the brand products. Consequently, generics contain the same active ingredients as brand-name drugs and share other essential properties with them — strength, dosage form, manufacturing standards, and route of administration.

Therefore, generic drugs cost less due to eliminating the medicinal chemistry aspect from the research and development process. One can even argue that generic drug production hardly requires any application of a scientific approach. There is no need for a generic’s manufacturer to repeat original clinical trials in order to evaluate their product’s effectiveness. The original drug manufacturer conducts all the necessary and costly experimental procedures. As a result, it becomes possible for generics manufacturers to save a significant amount of funds and lower the end product’s price. At the same time, the quality and manufacturing standards are still followed strictly in order to comply with the FDA requirements. Due to this fact, one cannot call generic drugs inferior to brand-name products.

Finally, the comparative effectiveness of generics with brand-name counterparts had been confirmed in the scholarly sources. After analyzing data of 3.5 million patients in the U.S., Desai et al. (2019) observed that generics provided similar clinical outcomes in the treatment of diabetes, hypertension, osteoporosis, depression, and anxiety.

According to Howard et al. (2018), generics are widely used among various therapeutic classes, such as antihypertensives, antidepressants, antidiabetics, statins, and antibiotics. Some drug experts have expressed concerns about the effectiveness of generics with a narrow therapeutic index (NTI), such as antiepileptics (Howard et al., 2018). However, the majority of generic drugs offer a cheaper alternative to respective brand name products, which is not associated with any additional adverse effects and health risks.

Concluding Remarks

One may feel relieved knowing that the lower prices of generic drugs can be explained by the simplified research and development stage rather than inferior quality. From the perspective of chemistry, the properly approved and correctly manufactured generic drugs are no worse than their branded counterparts. However, the problem arises if one considers that drug manufacturing cannot be separated from the business aspect. Generics can enter the market only after the expiration of the patent on the original brand-name product. Due to this fact, the original manufacturer virtually possesses a market monopoly over a span of time of up to 20 years (Anderson, 2019).

After that period, large pharmaceutical companies face the possibility of losing a significant market share because smaller drug manufacturers are allowed to register generics and sell them at lower prices. At this point, chemistry and financial benefit of the patients clash with corporate interests. Pharmaceutical companies utilize various strategies to oppose generic drugs from entering the market.

For instance, the chemical properties and active ingredient of the new generic drug may be perfectly matching the brand-name counterpart. However, the original manufacturer may try to protect the market exclusivity of their product by changing other features and registering a new patent. For example, Novartis utilized this tactic with Gleevec (imatinib), a drug for leukemia treatment, by modifying a crystal of the active ingredient (Vokinger, 2017).

The company covered the changed crystal with a secondary patent, but the modified version did not offer any improvements in the drug’s efficacy or safety (Vokinger, 2017). Such tactics may lead to legal claims and long court hearings, effectively stopping generics from reaching the market until the dispute is resolved. Even if the original manufacturer loses the case, their product holds market exclusivity for a prolonged time.

However, such tactics may raise unwanted controversy and still fail at preventing generic drugs from marketing. For example, when Forest Laboratories developed a once-daily version of Namenda, a treatment for Alzheimer disease, they also tried to immediately discontinue the original twice-daily product (Vokinger, 2017). This move was aimed at protecting the company’s product exclusivity against the cheaper generic drugs. In the end, the federal court of appeals required Forest Laboratories to continue selling the twice-daily version until generic becomes available (Vokinger, 2017). As a result, the pharmaceutical companies have developed a new tactic against generic drugs aimed at their key competitive advantage — low prices.

Instead of competing with generics through delaying their development and marketing, large pharmaceutical companies delved into the generic manufacturing business themselves. According to the Generic Pharmaceutical Association, brand name companies make about 50% of all generics on the market (as cited in Anderson, 2019). Original manufacturers possess the same legal right to apply for generic drug registration after the patent for their original product expires. As such, nothing prevents them from acquiring a generic company or even marketing a generic as a new brand. Those “branded generics” are usually less affordable than the “true” generics (Anderson, 2019).

In addition, the sales of branded generics bring profit to the original manufacturer. As a result, only the patients remain in a losing situation since generic drugs gradually become branded and grow in price. Overall, this worrisome trend will progress further in the future unless the legislation directly prohibits original manufacturers from interfering with generic drug registration and production.

References

Anderson, L. A. (2019). . Drugs. Web.

Desai, R. J., Sarpatwari, A., Dejene, S., Khan, N. F., Lii, J., Rogers, J. R., Dutcher, S. K., Raofi, S., Bohn, J., Connolly, J. G., Fischer, M. A., Kesselheim, A. S., & Gagne, J. J. (2019). . PLoS Medicine, 16(3), e1002763. Web.

Hohmann, N. S., Garza, K. B., Surry, D., Hansen, R. A., Harris, I., Kiptanui, Z., Oguntimien, O., Frost, M. M., & Qian, J. (2019). . Research in Social and Administrative Pharmacy, 15(12), 1489-1493. Web.

Howard, J. N., Harris, I., Frank, G., Kiptanui, Z., Qian, J., & Hansen, R. (2018). . Research in Social and Administrative Pharmacy, 14(7), 619-627. Web.

Merriam-Webster. (2021). Generic. Web.

U.S. Food and Drug Administration. (2021). Generic drug facts. Web.

U.S. Food and Drug Administration. (2017). Web.

Vokinger, K. N., Kesselheim, A. S., Avorn, J., & Sarpatwari, A. (2017). Strategies that delay market entry of generic drugs. JAMA Internal Medicine, 177(11), 1665-1669. Web.

Walker, E. B. (2020). . Chemistry LibreTexts. Web.

West, R. L. (n.d). Generic drugs. U.S. Food and Drug Administration. Web.

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