Generic drugs are drugs with active ingredients identical to those of patented brand-name drugs. Drug companies are allowed to manufacture generic drugs after patents expire, in regions where no patent has been registered, and in the event that a patent can be proven invalid. As a general rule, generic drugs are much less expensive than brand-name drugs, and consumers are often encouraged to consider using generic drugs for the savings. Some insurance companies refuse to cover brand name drugs if generic versions are available, under the logic that the drugs are identical, and the insurer wants to save money.
As a general rule, in order to be accepted by a regulatory agency, a generic drug must have the same active ingredients, dosage, and indications as the brand-name versions. The drug is considered “bioequivalent,” meaning that it is fundamentally the same as a brand-name version. Generic labeling and advertisements are often very similar to those of brand-name drugs, building on customer loyalty, although advertisements which stray too close to the original may be grounds for a lawsuit.
Generics are cheaper than brand-name drugs because the generic manufacturer does not need to go through the costly and lengthy process of drug research, discovery, and testing. The drug does not need to be tested before being released on the open market, as it is presumed identical, and competition also tends to be fierce, so producers lower costs so that they can compete with each other. As a result, generic drugs are often available for a fraction of the cost of brand-name products, many of which are sold at a high cost under the logic that the drug developer must recoup its costs.
In fact, generic drugs are not always identical to their brand-name counterparts. The inactive ingredients may vary, and sometimes subtleties in the formulation cause the drug to act slightly differently. Some patient advocates argue that patients and doctors should choose the drug which works best for the patient, rather than the cheapest drug, and that insurance policies which force patients to buy generic drugs restrict freedom of choice.
Drug companies tend to encourage this view, plastering medical magazines with advertisements for their products to encourage doctors to write the brand-name, rather than the generic, on the prescription pad. The differences between brand-name and generic drugs probably lie somewhere in the middle: many generic drugs are indeed identical and perfectly safe to use as replacements for brand-name versions, while in other cases, there may be legitimate reasons for specifically requesting a brand-name drug.