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The “Pharma Bro”: Ruining the Pharmaceutical Industry One Drug at a Time

Generics vs. Brand Name Drugs

To most, the difference between generic drugs and brand name drugs is one thing: price. According to the Congressional Budget Office, generic drugs save consumers nearly $8 to $10 billion a year at pharmacies. The vast majority of individuals using prescriptions drugs do not have a medical degree. They have no knowledge of the intricate and exhausting research and development that goes into each and every drug before it is put to market. So if no one knows the difference between generics or brand names why does it matter? Well, because nearly 8 in 10 prescriptions filled in the United States are for generic drugs with those numbers expecting to grow in the coming years with the prevalence of the ACA. The question left to answer is what, besides price, are the differences between generics and brand name drugs?   

First, it is necessary to have a clear understanding of the process through which generic and brand name drugs must undergo before they can enter the market. Generic drugs face a variety of issues to get to market; however, the main issue that generic drugs must tackle is the patent held by the brand name drug company. This patent effectively gives a pharmaceutical company a monopoly on the market until the patent runs. However, even after the patent runs, the brand name company is able to file a patent infringement lawsuit. The law, as it is right now, automatically blocks the generic competitor from market for two years. Ron Pollack, Executive Director of Families USA, stated this process in plain terms when he said, "[e]ven after they lose the lawsuit they've actually won because they've delayed the generic drug from going to market.” During this time, the market is still monopolized in favor of the pharmaceutical company, allowing them to make hundreds of millions of dollars in a few months.

Once the process is complete, then the generic drugs undergo a rigorous approval process. Listed below are some of the steps a generic drug company must take for approval:

  • Contain the same active ingredients as the innovator drug (inactive ingredients may vary);
  • Be identical in strength, dosage form, and route of administration;
  • Have the same use indications;
  • Be bioequivalent;
  • Meet the same batch requirements for identity, strength, purity, and quality; and
  • Be manufactured under the same strict standards of FDA's good manufacturing practice regulations required for innovator products.

Generic drug approval means it has met rigorous standards established by the FDA with respect to identity, strength, quality, purity, and potency. However, there may be some variation during manufacturing, for both brand name and generic drugs

Generic Price Hike Investigations

It seems that every news article about drug pricing is a new story of an incredible price hike that has forced people to stop taking their medications. Perhaps most famous (or infamous) is the case of Turing Pharmaceuticals (Turing) and its CEO Martin Shkreli.  As CEO, Shkreli  raised the price of Daraprim from $13.50 a pill to $750 overnight. Daraprim is necessary to treat toxoplasmosis, which may be fatal to HIV patients. Another example of such injustice (or perhaps a very good business decision) is the increase in price for a monthly supply of generic Fioricet with codeine (a migraine medication) from $25.78 to $85.54. That is roughly a 230% price increase for the generic version of a drug that has been on the market for about 90 years. A classic case is the cancer drug Gleevec, which in 2013 cost roughly $6,200 per month in the United States but only $1,100 in Canada. Sovaldi, a drug used to treat hepatitis C, is listed in the United States for $84,000 for a 12-week course of treatment but only $46,000 in Germany. However, it is important to note that all of these numbers, or price increases, vary with different insurances or the quantity of the drugs needed. 

Who is Putting a Stop to This?

In short, no one. No one is putting a stop to this because it is nearly impossible for the United States government to punish a business for raising prices. Additionally, it is unconstitutional for the government to step in and control prices. Free market must reign supreme in our democratic nation. Shkreli testified at a House Committee on Oversight and Government Reform Hearing. However, he responded to every question with the same line, “[o]n the advice of counsel, I invoke my Fifth Amendment privilege against self-incrimination and respectfully decline to answer your question.”

Why do we not stop this? One famous quote from a Pfizer executive, Susan Susman, sums up the reason it is difficult to be upset about the prices. She stated, “Here’s the reality: . . . To make up for the risk and expense inherent in creating new medicines, the few medicines that are successful must cover the research and development costs of the many clinical failures that will never earn a single cent.”

The question remains, what can be done to lower prices? One solution may be for the government to make drugs easier to get to market (or less expensive). This would offset the cost it takes for a company to take the drug to market. Second, the government could shorten patents in order to allow more competitors in the market. However, this may have the negative effect of disincentivize companies from creating a drug in the first place. Either way, the pharmaceutical companies always have their hands in Congress through donations to campaigns. This is not an easy issue to resolve, but it must be worked on in order for our medical system work properly.


Anthony Lopez is currently a second-year law student at DePaul University College of Law. In addition to his work for the Mary and Michael Jaharis Health Law Institute at DePaul, Anthony also is the Wolters Kluwer Staff Member and a Staff Writer for the DePaul E-Pulse.