A generic drug is a drug which is bioequivalent to a brand name drug with respect to pharmacokinetic and pharmacodynamic properties, but are sold for a lower price. Generic medicines must contain the same active ingredient at the same strength as the "innovator" brand, be bioequivalent; and are required to meet the same pharmacopoeial requirements for the preparation. By extension, therefore, generics are identical in dose, strength, route of administration, safety, efficacy, and intended use.
The principal reason for the reduced cost of generic medicines is that these are manufacturered by smaller pharmacuetical companies which do not invest in research and development into new drugs. The significant research and development costs incurred by the large pharmaceutical companies in bringing a new drug to the market is often cited as the reason for the high cost of new agents - they wish to recover these costs before the patent expires. Generic manufacturers do not incur these costs, with bioequivalence testing and the actual manufacturing process costing relatively little, and are able to charge significantly lower than the "innovator" brand.
Generic drugs can be legally produced for drugs where the patent has expired, for drugs which have never held patents, or in countries where a patent is not in force. The expiration of a patent removes the monopoly of the patent holder on drug sales licensing. It is also becoming popular for the large pharmaceutical companies to preempt the expiry of their patent by producing their own generic product, or licence their own product to be branded by generic companies. Thus, in some cases, the "generic" product is actually the brand product but inside a different box.
Some countries are considering amending legislation to allow the manufacture of generic versions of AIDS drugs only for export to developing countries. This compromise protects the rights of patent holders in the home country while meeting the needs of developing countries for inexpensive medications.
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Last updated: 08-02-2005 11:41:21
