Generic Drugs: Cutting Cost, Not Corners

Rados, Bill, FDA Consumer

On Sept. 24, 1984, President Reagan signed a law simplifying FDA's approval process for substitute, or "generic," versions of brand-name drugs whose patents have expired. With the law now one year old, newly approved generics are entering the marketplace, offering savings to consumers, but only after satisfying FDA's requirements for quality and equivalence to the brand-name products with which they compete.

Over the past several years consumers have become more and more aware of the money they can save by purchasing generic rather than brand-name drugs. Indeed, the wor generic has been added to the public's vocabulary. While generics have the same active ingredient as their brand-name counterparts, they are usually sold at a substantially lower price. In fact, the potential for reducing U.S. health-care costs through wider availability of generic drugs prompted Congress to pass the law last year that streamlined FDA's approval process for generics. When President Reagan signed the law, he noted that "the American people will save money, and yet receive the best medicine that pharmaceutical science can provide."

Since generic drugs must meet the same FDA standards for safety, strength, purity and effectiveness as brand-name drugs, the differences between them are largely economic. All drugs have a generic name, also called the official or proprietary name, which applies to any manufacturer's version of the drug. Newly developed drugs are also given a brand or trade name by the innovator of the drug. Unlike generic names, which usually are contractions of a complex chemical name, brand names generally are short and easy to remember. For example, Darvon is Eli Lilly and Co.'s brand name for propoxyphene hydrochloride--the generic name for this prescription painkiller.

It's a common misconception that brand-name drugs are produced only by large, well-known firms while generics are made by small, unknown companies. A small drug company can put a brand name on its product just as a large company can market a drug under their brand names, products that have been manufactured, packaged and labeled by firms that make generic drugs. Some manufacturers may make a drug and sell it under both a trade name and its generic name. …

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Publication information: Article title: Generic Drugs: Cutting Cost, Not Corners. Contributors: Rados, Bill - Author. Magazine title: FDA Consumer. Volume: 19. Publication date: October 1985. Page number: 26+. © 1999 U.S. Government Printing Office. COPYRIGHT 1985 Gale Group.

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