Story of the Week | November 07, 2007

The Generic Bandwagon

How generic medicines fit into the big picture of health care

It came as a surprise to some recently when we learned that the average price of pharmaceuticals grew last year at a much lower rate than other consumer categories, such as groceries and gas. What’s going on? Why have some drug prices leveled off? Part of the answer is found in the complex relationship between the discovery and research process that provides us with new drugs and the production and marketing that follows.

Generally, production and marketing of drugs falls into two categories: the newer, more expensive, brand name drugs and the older, less expensive, generic drugs – which are copies of products that are no longer protected by patents. Since the “blockbuster decade” of 1990 to 2000, when an explosion of new drugs hit the market, generic versions of drugs have been on a fast upswing as patents have expired. In 1999, 51 percent of U.S. prescriptions were filled by generics – but by 2007 that number had grown to 63 percent. Additionally, large-chain retailers such as Wal-Mart, K-Mart and Target are changing their pricing structures for generics – and this has lowered costs even more.

That’s all great news for the average American – who can complain about lower price increases? But it does raise some troubling questions about the future of research. The research and discovery process that drug makers engage in is paid for by the marketing and production of their brand name products – and if that pool of funding is diminished by the growth of generic sales, the development of new products could be impacted. And without new products, generic companies will have nothing in the future to copy and sell at a lower price. To keep prices down for old drugs and to keep the pipeline of new drugs thriving, both research companies and generic companies must succeed.

Bottom-line: Drug discovery and marketing is a balancing act. To understand it a little better, be sure to watch this week’s video (embedded with this blog post) or read the full transcript of this week’s program, below. How do you feel about new drugs compared to generics? If you have an experience to share, please post a comment.

Mike Magee

Transcript

Read the full transcript of this story.

Related Websites


	Tufts Center for the Study of Drug Development
	The Tufts Center offers an informative backgrounder that explains how drugs move through the approval process
	http://csdd.tufts.edu/NewsEvents/RecentNews.asp?newsid=4

	From Test Tube to Patient
	The U.S. Food and Drug Administration provides links to numerous articles and studies on drug development
	http://www.fda.gov/fdac/special/testtubetopatient/default.htm

	Wikipedia: Generic Drugs
	Wikipedia provides extensive background about generics
	http://en.wikipedia.org/wiki/Generic_drug

Topic Tags: drug, pharmaceuticals, research and discovery

by Health Commentary

Comments

November 08, 2007

are they safe?

Questions Generic Drugs and their safety from other drug companies out side of the U.S.

I would like to see some more data and statistics of Generic Drugs and how safe they are. In most cases, they are pretty safe and a cheaper alternative to Brand name drugs. I always questioned my patients who swore that their heart of BP meds were not working as well for them when they took Generic drugs, until I had a bad experience myself. Just who makes these drugs? Where are American U.S. Hospitals obtaining these generic drugs? The internet? Canada? Overseas? I want to know the absolute truth. I have been on BloodPressure meds for years (it runs in my family). From month to month did you know that Hospital Pharmacies across the U.S. shop for pharmeceutical companies like we shop at an auction? They want the lowest cost item for the money to keep them competitive and in business for the lowest possible cost. I found out that they shop for the AWP = Average Wholesale Price and they can change these month to month withour telling the patients. You find out when your meds "aren't working as well as they used to", or when you have an allergic reaction to the "fillers" and or dyes that are mixed in with the drug that alot of people report to their pharmacists problems......they tell us it is because they changed the drug company or supplier that they are getting it from because they went with the company that was the cheapest. I had a reaction to the fillers in my medications and until I reported it......I had no way of controlling what kind of meds I received monthly. I had to take a chance on each different company and hope and trust what was being prescribed to me as safe from my Doctor & Pharmacist. ( I am a licensed Nurse.) My Pharmacist is the one who told me that they see this happen all of the time and are told by their employers and the BIG Drug Companies to "keep it hush" and just note the patient record and keep a supply of the same drug without fillers for that particular patient. How can we ensure the potency of the drugs we are prescribed and the safety of the generic drugs that we take? I used to think my Heart and Hypertensive patients were a little bit overeacting when they told me of their suspicion to the effects of generic drugs, until I became a victim myself, which almost landed me in the hospital. I am now skeptical of Generics. How can we ensure their safety when the Pharmacists and Big Drug Companies know how big business is really being done? I found out the hard way! The general public is now finding out the hard way. What is being done to ensure their safety? How can I prevent this from happening to me and my patients? Where are the drugs really being purchased from? A unknown internet site? A Drug warehouse overseas? Need help in FL

by MPKhighBPinFL

November 12, 2007

Keeping drugs safe

Questions of confidence and trust apply to both branded and generic drugs

Thanks so much for raising the issue of safety of generic drugs. The questions you raise around confidence and trust in the safety and purity of our "pharmaceutical stream" into this country applies equally to concerns about branded and generic drugs. Recent media coverage of counterfeit pharmaceuticals and Internet purchasing of medications reinforce that consumers need to take care. There also has been a good deal of reporting on variability, from one retail outlet to another, on cost. The issues of "grey market" and "black market" supply touch on the issue of quality manufacturing that you raise concerns about, as well as the practice of substitution of one product for another, which may have differing chemistries but are viewed as "therapeutically equivalent". The FDA has rules that govern these various concerns. Of course enforcing the rules requires adequate numbers of inspectors and budgets, and these have been problematic in everything from lettuce to children's toys, to drugs entering this country.

Here's what the FDA has (in part) to say on the issues of Generic Drug Safety:

What are Generic Drugs?

A generic drug is identical, or bioequivalent to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Although generic drugs are chemically identical to their branded counterparts, they are typically sold at substantial discounts from the branded price. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies. Even more billions are saved when hospitals use generics.

Drug companies must submit an abbreviated new drug application (ANDA) for approval to market a generic product. The Drug Price Competition and Patent Term Restoration Act of 1984 , more commonly known as the Hatch-Waxman Act, made ANDAs possible by creating a compromise in the drug industry. Generic drug companies gained greater access to the market for prescription drugs, and innovator companies gained restoration of patent life of their products lost during FDA's approval process.

New drugs, like other new products, are developed under patent protection. The patent protects the investment in the drug's development by giving the company the sole right to sell the drug while the patent is in effect. When patents or other periods of exclusivity expire, manufacturers can apply to the FDA to sell generic versions. The ANDA process does not require the drug sponsor to repeat costly animal and clinical research on ingredients or dosage forms already approved for safety and effectiveness. This applies to drugs first marketed after 1962.

Health professionals and consumers can be assured that FDA approved generic drugs have met the same rigid standards as the innovator drug. 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

For more information on the safety and effectiveness of generic drugs, please see:

FDA Generic Drugs Final Rule and Initiative
Consumer Education: Generic Drugs
Generic Competition and Drug Prices (4/4/2006)
FDA White Paper: New FDA Initiative on "Improving Access to Generic Drugs." (6/12/2003).
FDA White Paper: Generic Drug Prices in the U.S. Are Lower Than Drug Prices in Canada. (11/2003)
FDA and the Drug Development Process: How the Agency Ensures that Drugs are Safe and Effective (2/2002) [HTML] or [ PDF]. Spanish version: [HTML] or [PDF]
FDA Ensures Equivalence of Generic Drugs. From the 1999 edition of "From Test Tube to Patient: Improving health through human drugs."
Generic Drugs: Safe. Effective. FDA Approved. Public service announcements promoting the safety and effectiveness of generic drugs.

Six Public Service Announcements

Thanks for your comment!

Mike Magee

by Health Commentary

May 30, 2008

DRUGS WITH 2 DRUGS

It's cheaper to buy the drugs individually.

I’ve seen ads on TV for Caduet. It has two ingredients. One is Amlodipine and the other is Atorvastatin. With my RxDrugCard I can get 30 tablets of Amlodipine for $9 and 30 tablets of Simvastatin for $9. I’ll bet they are charging more than $18 for this new drug! Don’t pressure your doctor into giving you something just because it’s new. Do your homework. Find a drug card like I did at www.rxdrugcard.com. I think that RxDrugCard.com is the best drug card available for prescription discounts.

by Lily