Prior to entering market, drugs go through a long and resource-consuming process. They pass through several stages, including target identification, lead identification, pre-clinical and clinical testing, etc. The companies which successfully pass through these stages, carrying all the expenditures, are given an exclusive opportunity to file patents for their drug formulas and produce them making profit. The period of patent protection is twenty years, normally. However, as brands apply for patents long before the clinical trials, the patent period after entering market reduces to approximately from seven to twelve years. After this period, patents expire and the formulas of the drugs can be used for commercial purposes, by companies other than the brand ones. The drugs produced under such circumstances are called generic drugs.
Generic drugs are bioidentical or bioequivalent to brand drugs- that is, the active component, dosage, efficacy, pharmaco-dynamics, and pharmaco-kinetics of the drugs are the same as those of the brand ones. The differences between generics and brands might include the shape, coloring, flavoring, packaging and the inactive ingredients. However, these variations are limited: to be able to produce generic drugs manufacturers must have the approval of Food and Drug Administration (FDA), which ensures that the drugs meet the required criteria.
Generics, contrary to brands, do not have to pass through a long process of testing and approval to be able to enter the market. Hence, they do not have to make enormous upfront investments. Besides, they can save on marketing expenses, as by the time a generic drug enters the market, its potential consumers are already familiar with the effects of the bioequivalent brand. This means, generic drug manufacturers can operate with limited preliminary financial resources. As a result of limited financial resources, frequently, several generic companies share the plants were the drugs are produced. Although the plants are checked and approved by FDA, in some cases, sharing can affect the cleanness of the products adversely. In addition, generic drugs sometimes contain less of the lead component and more of the inactive ones, which weakens the final effect of the drug.
However, sometimes, the variations in the amounts of certain components in generic drugs might increase the positive effects of those drugs. Generic drug producers, based on the experience of already existing brand drugs, can offer the improved versions of the brands. They can achieve this by changing the concentrations of some components without disrupting the bioequivalence.
On the other hand, the emergence of generic drugs prevents the pharmaceutical industry from monopolization. Generic drugs cost less and are produced in larger amounts. Some successful generic pharm companies even manage to beat the sales of the brand companies, especially in the export markets. Since the prices of brand drugs are higher than that of the generics, whereas the quality is, supposedly, the same, a lot of people willingly switch to generics when they are produced. A survey conducted by the American Medical Association indicated, that almost 95% percent of Americans would consider taking generic drugs instead of the brands for their routinely prescribed drugs. However, despite the fact that several generics do manage to beat the sales of equivalent brands in particular regions, or under certain circumstances, the worldwide sales leaders are still brand name companies. This can be attributed to the brand name and the consumer loyalty developed the period they were the sole manufacturers of the particular drugs.
Generic drugs, in terms of active components and overall influence, are complete equivalents of their brand counterparts- they might contain only slight differences. Although mostly these variations are considered to lessen the quality, sometimes, they can be advantageous. This can give generics a competitive edge. A notable benefit of the generics is that it hinders the attempts of brand producers to keep the market of particular drugs in their hands without developing innovative products that benefit consumers. In addition, generics have price advantages that make healthcare more affordable for society.