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.