We get asked very often about the difference between a brand name drug and a generic drug and it always centers around the question if they really Equivalent; And if so, why the big price difference? Almost everyone knows that brand name drugs are much more expensive than their generics, and the substantial price difference leads many to believe brand name drugs are more effective. Some even seem to think of generic drugs as copy-cats or knock-offs of the original brand name medication, like the so-called “Rolex” watches and “Louis Vuitton” bags sold by street vendors. However, any healthcare professionals will confirm that generic drugs are just as effective as brand-name ones. This article will provide a detailed review of why generic drugs are much cheaper but equally effective to brand name drugs.
Brand name vs Generic name
Brand name is a trademark name given by the marketing department of the company that first invented the drug.
Generic name is the actual chemical name of the drug, also known as its scientific name. For all professional healthcare training programs, only the generic names are taught in classes.
The generic name of a drug is universal, but its brand name can sometimes be different in different countries if the drug was patented under different trade names. For example, ambrisentan is the generic name of the drug for PAH treatment, but it is brand named Letairis in the US, Volibris in Canada and the EU, and Pulmonext in India. Another example is pirfenidone, a treatment drug for IPF, its brand name is Esbriet in the US and EU, Pirespa in Japan, and Pirfenex in India. Sometimes, the same drug can have different brand names in the same country. In the case of tadalafil, it was first branded under the trade name Cialis in the US when it was patented for the treatment of erectile dysfunction, and later when the same drug was patented again for the treatment of pulmonary hypertension, it was given a different brand name, Adcirca.
Why are Brand name drugs so expensive?
The development of a new drug requires billions of investment in research, lab testing, clinical trials, government approval, and marketing, which only a handful of big pharmaceutical companies can afford in today’s world. When a new drug finally makes its way to the market, usually after decades of research and clinical trials, its inventor is not only looking to recover the billions of dollars invested but also a substantial profit on top. Governments on the other side, at least those in the US and Canada, generally want to encourage continuous innovation by providing good incentives to these companies in the form of patent protection of their inventions. These patents prevent any other company other than the inventor to manufacture the drug for a defined period of time, usually 20 to 25 years in North America, and it also allows the inventor to market its product under a unique and catchy brand name in the patent country. While the brand name drug is under patent, the developer company holds monopoly without any market competition and has the freedom to freely price their drug to maximize their profit. The prices for most brand name drugs remain high even after their patents expire because most of these research and development (R&D) companies focus on profiting from inventing the next new drug rather than competing on price with generic companies over their old drugs.
One important fact to note is that while the drug patent prevents market competition, it does not allow the original developer to hold their active chemical a secret like the way CocaCola hides its recipe. The active chemical and its manufacturing process must be fully disclosed to the public after the drug is approved.
What are Generic Drugs?
There are many smaller pharmaceutical companies that do not invest in research and development of new drugs. They simply wait for the patent of existing drugs to expire then start producing them. When a drug patent expires, dozens of these generic companies will enter the game. The only cost involved for these generic companies is basic production cost and the fierce market competition eventually drives the price for generic drugs to the floor.
Are Brand name and Generic drugs Equivalent?
Yes. By law, a generic drug must
- contain the same active ingredients as the brand-name drug
- be identical in strength, dosage form, and administration
- work the same way in the body (be bioequivalent)
- meet the same standards for identity, strength, purity, and quality
- be made by the same rules the FDA has set for the brand-name drug.
Bioequivalent: Before a generic drug can be approved by the FDA, the manufacturer needs to conduct comparative bioavailability studies in humans to demonstrate the generic drug is bioequivalent to its brand name counterpart. During these studies, participants are given both the brand-name and generic drugs, and their blood is continuously monitored to ensure that the generic drug delivers the same amount of active drug chemical to the body at the same rate as the brand name drug.
Difference: What’s different between a generic and brand name drug is the appearance of the drug and the inactive ingredients. Generics contain different coloring agents, binders, and preservatives than the brand-name drug. These differences do not make any difference to the effectiveness of the drug but in very rare cases may cause undesired reactions in certain individuals.
Many comparative studies have been done to confirm the equivalent effectiveness between brand name and generic drugs. Both the Canadian FDA and the US FDA have put forth strong statements to encourage the increased utilization of generic drugs as they cost on average less than 1/7 of their brand name counterparts and will save billions in healthcare spending.
At Life Relay Health Care Solutions, we believe that no one should be deprived of access to crucial medications in today’s healthcare. We are dedicated to providing you with the most reliable medications at the least expensive prices. Please do not hesitate to contact our experienced pharmacists toll-free at 1-888-488-9965 to consult how you can save up to 80% on your medications with brand and generic substitutes that are equally effective.