And how do they do It?
Let’s begin with a simple definition of a generic drug. Any drug identified as a generic equivalent of a brand-name medication has a similar chemical or drug formulation that acts on the body with the same strength and absorption process of the brand-name drug. The generic drug also must be equal in safety, strength, route of administration (pill, liquid, etc.), quality, performance and have the same intended use as its brand-name equivalent. So, the generic medication is the bioequivalent of the brand-name drug.
So if the generic version has the exact same effect on the body as the brand-name version, what is the advantage of generic drugs? The congressional budget office estimates that consumers save nearly $10 billion a year by using generic drugs. Why are generic drugs so much cheaper than their brand-name counterparts? This is because the creation of a drug can take many years, along with many millions of dollars. The main reason is that companies producing the generic versions of a brand-name drug have much lower overhead costs than the original creators of the drug. You might get the popular antidepressant Prozac each month for a $40 co-pay, but you could have its generic equivalent (fluoxetine hydrochloride) for a $10 co-pay, saving you $360 a year.
About half of all prescriptions are filled with a generic equivalent of a brand-name drug. But is this true? And if so, why are they so much cheaper than brand-name drugs? Most of us have been asked if we want a generic alternative to our brand-name medication. Because of the decrease in price, most of us will agree to this switch, figuring that the generic must be as good as the brand-name drug.
According to the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act), bioequivalence is the main basis for approval of generic drugs. The generic drug must contain the same active ingredients, have identical strength and form and have a similar route of administration as the brand-name drug. The FDA may also perform a plant inspection to make sure that the company is safely producing the generic form of the drug. The generic drug must also be used for the same ailments that the brand-name drug is used.
