Pharmaceuticals refers to man-made and natural drugs used to treat diseases, disorders, and illnesses.
For nearly two decades, generic pharmaceutical products have been used by millions of American consumers to treat infection, heart disease, cancer, and numerous other medical conditions. Generic drugs have improved the health and quality of life of these patients. Today, at pharmacies across the country, more than half of all prescriptions will be filled with a more affordable generic drug. Tiagabine
Generic drugs mean real savings for every consumer. According to data from The National Association of Chain Drug Stores, in 2004 the average price of a brand prescription was approximately $96.01. The average price of a generic prescription was approximately $28.74. That is a difference of $67.27 per prescription -- money every consumer can use for other purposes.
Generic pharmaceuticals offer this savings with the same safety and effectiveness of the more expensive brand pharmaceuticals. Generic pharmaceuticals make American healthcare more affordable. Tacrolimus, Fk506.
What is a Generic Pharmaceutical?
When a medicine is first developed, the pharmaceutical company discovering the product and bringing it to the market for the first time is afforded a period of patent protection on that medicine. When the patent expires, typically after 20 years, other pharmaceutical companies can then seek approval from the U.S. Food and Drug Administration (FDA) to market an equivalent product under its chemical, or "generic," name. Sometimes, generic versions of patented products may enter the market before the expiration of a patent if that patent is shown to be invalid or if the generic version does not infringe on the patent.
The Food and Drug Administration requires that the generic pharmaceutical manufacturer must prove that their generic version of the product:
- contains the same active ingredient;
- is identical in strength, dosage form and route of administration;
- has the same indications, dosing and labeling;
- is bioequivalent;
- meets the same batch-to-batch requirements for strength, purity and quality; and,
- is manufactured under the same strict good manufacturing practice regulations as the branded pharmaceutical.
Generic Pharmaceutical Facts at a Glance
- U.S. Brand Pharmaceutical Sales for 2004: $217.4 billion. U.S. Generic Pharmaceutical Sales: $18.1 billion. (Source: IMS Health)
- Of the top five U.S. pharmaceutical companies, based on number of prescriptions dispensed, the top four are generic companies.
- 7,602 of the 10,375 drugs listed in the FDA¡¯s Orange Book have generic counterparts.
- Generic drugs account for 53% of all prescriptions dispensed in the United States.
- Generic pharmaceutical products are used to fill more than one billion prescriptions every year.
- In the past several years, generic versions of a number of leading prescription drugs have been introduced, including generic versions of: Prozac, Adderall, Glucophage, Taxol, Augmentin, Buspar, Ultram, and Mevacor.
- In 2004, the average price of a generic prescription drug was $28.74. The average price of a brand name prescription drug was $96.01 (Source: The National Association of Chain Drug Stores).
- According to a 1998 study by the Congressional Budget Office, generic drugs save consumers approximately $8-10 billion each year.
- Generics accounted for 53% of all prescriptions dispensed in 2004, according to IMS data, but less than 12% of every dollar spent on prescription drugs.
History of the Generic Drug Industry
Formally known as The Drug Price Competition and Patent Term Restoration Act of 1984, Hatch-Waxman, created the framework for the more timely entry of generic drugs into the pharmaceutical marketplace.
Often referred to as the foundation of the modern generic pharmaceutical industry, Hatch-Waxman encourages market competition between brand and generic companies, resulting in significant savings and more choices for consumers.
Before Hatch-Waxman, pharmaceutical approval processes burdened generic companies with costly developmental expenses, and extensive testing requirements. As a result, very few generic choices were available.
Hatch-Waxman streamlined the generic approval process, allowing generic companies to focus on proving that their drugs are equivalent to the brand product, without requiring extensive testing that would duplicate work already done by the brand companies. This process, the Abbreviated New Drug Application (ANDA) process, allows for the acceleration of the FDA approval of generic pharmaceuticals.
As a result of Hatch-Waxman, of the 10,357 FDA approved drugs listed in the Orange Book, 7,602 have generic counterparts which save consumers an average of 70 to 80% per prescription. Hatch-Waxman today saves consumers $8-10 billion every year.
And the provisions of Hatch-Waxman continue to encourage generic competition. Over the next three years, consumers can expect to have the choice of generic versions of brand drugs that have current annual sales of more than $35 billion.
The Generic Pharmaceutical Approval Process
A generic pharmaceutical company, seeking to market an equivalent to a brand pharmaceutical company¡¯s drug product uses the Abbreviated New Drug Application (ANDA) process of the Food and Drug Administration (FDA).
Because the brand drug has been used by millions of consumers for a number of years, the safety and effectiveness of the product is already established. From a public policy standpoint confirming the safety and effectiveness of the generic version of the drug is not necessary. Instead, the generic manufacturer relies on the safety and efficacy data supplied by the brand company in order to avoid duplicating needless clinical testing.
However, the generic manufacturer must establish that its product is equivalent to the branded product.
To be approved, a generic must have the same active ingredients, same dosage form, same standards for purity and quality, same standards for manufacturing, same amount of drug absorbed over the same time, and same clinical effect as the brand product.
The generic manufacturer must conduct bioavailability and/or bioequivalence studies of its version of the branded drug to prove that it is the same as the brand drug.
Bioavailability studies assess the rate and extent of absorption and levels of concentration of a drug in the blood stream needed to produce a therapeutic effect. Bioequivalence studies compare the bioavailability of one drug product with another, in this case the innovator's product. When bioequivalence is established, it indicates that the rate of absorption and the levels of concentration of a generic product are substantially equivalent to the branded product. This is the same type of studies brand firms use to support changes to their product, including formulation and strength modifications.
Therapeutic equivalence is a term of art used to describe the sameness of a brand and generic product. Therapeutic equivalence ensures that the manufacturer of the generic product can reliably and reproducibly produce the generic product to predetermined specifications, the same specifications as required by the FDA of the brand company. Once a product has been determined to be therapeutically equivalent, the FDA provides the assurance that the clinical effect and safety profile should be the same as that of the brand product. In order to receive a rating of therapeutic equivalence, the FDA reviews the manufacturer's entire Abbreviated New Drug Application (ANDA) including on-site inspection of the manufacturer's facilities (pre-approval inspection).
The FDA also requires that a company's manufacturing methods conform to current good manufacturing practices (cGMP), as defined in the U.S. Code of Federal Regulations. The generic pharmaceutical company must follow the cGMPs in all phases of the manufacturing process, and must continually monitor compliance and measure quality control. FDA assures that the same quality, purity and manufacturing standards are used across the entire prescription drug sector.
All pharmaceutical products, whether brand or generic, vary slightly. However, the same testing that assures batch to batch consistency for a brand product is used to ensure equivalence of generics.
Consumers Trust Generics
More and more, consumers are asking their doctor or pharmacist if a generic drug is available to treat their illness, and save them money. Two recent surveys confirm that generic pharmaceutical products increasingly are being embraced by consumers.
A 2002 survey conducted by ChangeWave Research, an investment research firm, demonstrated the increasing acceptance of generic pharmaceuticals. More than half of consumers surveyed - 59 percent - said they currently ask their doctor if a generic drug is available at the time they get a prescription. And 67 percent said their insurance companies either advise or require them to accept generics. Meanwhile, 76 percent of health-care professionals said physicians are more willing to prescribe generics now than they were a year ago. And 90 percent of health care professionals said insurance companies and other payers were increasing pressure to prescribe generics.
A study by AARP released in the fall of 2002, found that an overwhelming majority of Americans (84 percent) say that generic drugs are an important part of controlling rapidly increasing drug costs. The survey found that two-thirds usually choose generics over brand names when available, and 90 percent are willing to accept generic drugs as a way to reduce their drug costs. Nearly a quarter (24 percent) of the survey respondents said they have not been able to afford a prescription medication when there was no generic available.