, test and run clinical trials on before putting it on the market. The drug manufacturer invests this time and money. In return, they are granted a patent on a new drug. Generic drugs can be manufactured only when a patent has expired.
The Federal Drug Administration imposes a time limit on the patent. The length of time one remains in effect varies from country to country. Once the patent has expired, other manufacturers are entitled to produce a generic version of the drug.
All generics are required to have the same ingredients the original formula contained. Requirements are put in place by the Federal Drug Administration. A generic version must contain the same or nearly the same active ingredients as the original brand name does.
The cost of generic drugs is much lower than the brand name for two good reasons. They are copied, which relieves them of the expense of research and clinical trials. Another reason is that more than one company can manufacture a generic version.
Where competition exists, price goes down. The generic producers compete for the consumer's dollar and it keeps prices low. It is only natural for a consumer to buy the cheaper product as long as the quality is maintained.
Generic drugs can be manufactured cheaper in some countries. India is one example. It is because the workers are paid much less in wages than workers in the United States.
The United States President signed a new law on March 23, 2010. The FDA is required to approve all generic formulas prior to their sale. The original producer has twelve years of exclusive rights protected by patent law. After that generic versions can be produced and sold to the public. This law is named the Patient Protection and Affordable Care Act.
More generics are sold in the US than any other single country. When the patent protection expires on current brand name drugs, a large portion of them will be produced as generics. Generics medications already have approximately 78% of the US pharmaceuticals market. The implications of this fact on the market are yet to be seen.
All pharmaceuticals cost a lot of money to produce safely. Advertising costs add to the total price. The ads we see on TV are all expensive. In order to support this high expense, the drug manufacturers must be making a large profit.
This advertising does not mention that generics are made in India at a fraction of the cost for them to be made in the USA. The cost of advertising is factored into the price. Drugs are made safely in India in spite of the implications that drugs from overseas may pose a hazard to your health.