What are generic drugs?
A generic drug is an identical, or bioequivalent, version of a branded drug made by another party. For approval of a generic, the drug company must submit an abbreviated new drug application (ANDA) to the Federal Drug Agency (FDA).
To gain FDA approval, a generic drug must:
- Contain the same active ingredients as the innovator drug (inactive ingredients may vary)
- Be identical in strength, dosage form, and route of administration
- Have the same use indications
- Be bioequivalent
- Meet the same batch requirements for identity, strength, purity, and quality
- Be manufactured under the same strict standards of FDA’s good manufacturing practice regulations required for innovator products
Why are generic drugs cheaper?
Generic drugs account for 89% of the prescriptions dispensed in the USA but only 27% of drug spending. Part of the reason that generics are able to be sold at such reduced prices is the lack of obligation that generic companies have to carry out the original exploratory clinical trials. The process of receiving market access for novel branded drugs is significantly more time and cost consuming. In large this is due to the rigorous clinical trials that new drugs are required to go through. The ANDA process does not require the drug company to repeat costly animal and human clinical trials on active ingredients or dosage forms that have already gained approval for safety and effectiveness.
Another benefit for generics is that they enter a market that already has an actively engaged customer base. Generic companies do not have to allocate extensive resources to marketing and advertisement, as the drug is already familiar to healthcare practitioners, prescribers and patients. Additionally, this pre-established customer base negates the requirement for a large sales force.
Are generics less safe?
In a nutshell, no. Generic drugs should be as safe as their branded equivalents. For example, different batches of branded drugs can often be metabolized differently by individuals, this tends to be of little medical significance. The same is expected and accepted for generic versions of branded drugs.
In accordance with FDA regulations, a generic drug’s maximum concentration of active ingredient in the blood must not fall more than 20% below or go 25% above that of the branded drug. This narrow range ensures that the generic will perform similarly to the branded drug. The time it takes the generic drug to reach the bloodstream in healthy volunteers is also monitored. This gives the bioavailability of the generic drug, which can be compared to that of the branded drug. In any given period of time, the amount of active ingredient delivered to the patient’s blood by the generic drug must be the same as that for the branded drug. Furthermore, generic manufacturing, packaging, and testing sites are held to the same quality standards as sites for brand name drugs are.
Despite proven bioequivalence and proven safety profiles, generic drugs are still sold at substantially lower prices than branded drugs. This results in a reduction of $3 billion per week on USA healthcare spending, and save consumers between $8 and $10 billion a year at retail pharmacies1, cementing the economic case
- SAVINGS An Economic Analysis of Generic Drug Usage in the U.S.. Generic Pharmaceutical Association, September 2011, page 1
About the Author
Avneet Heer is an analyst at DrugPatentWatch. She has a degree in biochemistry from the University of Leeds, UK, and also has a wide variety of experiences in the pharmaceutical sector. Previously she worked at UK and Ireland headquarters of Johnson & Johnson in the pharmacovigilance department, where she facilitated an international drug re-launch.