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Generic Drugs Research Report.

1 May, 2003

David Gross, AARP Public Policy Institute

Learn more about AARP Public Policy Institute For many years, generic drugs have been a key tool for helping consumers, health insurers, and public payers to reduce their prescription drug costs. Their availability is particularly important in view of renewed rapid health care cost increases, a substantial share of which is attributed to prescription drugs.

At the same time, the cost savings should not be considered separately from quality of care issues. In this AARP Public Policy Institute Issue Brief, David Gross provides basic information about generic drugs, focusing on their contribution to reducing prescription drug costs; the generic drug approval process; evidence on generic drug safety and effectiveness; state laws regarding generic substitution; and provider and consumer attitudes toward generic drugs.

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Health Focus: Are Generic Drugs As Good?

13 Oct, 2006

They’re cheaper. And they’re usually as effective. But there are important exceptions.
INTELIHEALTH FEATURE - You’ve seen them in the supermarket: No-name or store brand medications that promise to be as effective and cheaper than the brand-name variety. They can cost half as much as a name brand. But are they as effective?

In most cases, the answer is "yes," says Vincent Earl Pearson, Pharm. D., clinical coordinator for drug information for the Department of Pharmacy at Johns Hopkins Hospital. Generic drugs are as safe and effective as brand-name products, and subject to the same quality guidelines set by the Food and Drug Administration to ensure their therapeutic equivalence.

"There is a long list of generic products that I have no problem putting side-by-side with their brand-name counterparts," says Dr. Pearson. "They’re not inferior. People mistakenly believe cost is equivalent to quality."

Generic drugs must contain an identical amount of active ingredients as their brand-name counterparts, and in the identical dosage. The generic drug must deliver the same amount of those active ingredients into a patient’s bloodstream and within the same time frame as the original drug. It must also fall in "acceptable parameters" established by the FDA for bioavailability, which is the extent and rate at which the body absorbs the drug.

So besides price, the only real difference between brand-name and generic drugs tends to be the inactive ingredients used that have no medicinal value. These include fillers, binders, coloring and flavoring, which may explain why generics may differ in the size or shape of pills or capsules.

Then why do brand-name drugs cost so much more? Their manufacturers must bear the up-front costs of researching and developing the drug, a process that can cost hundreds of millions of dollars. Here's how it works: When the new chemical formula is first synthesized in the lab, the company is issued a patent that lasts 17 years. During that time, no other drug manufacturer can market a generic equivalent of that drug.

But since it can take 10 years or more of testing and clinical trials before the drug gets FDA approval, little time is left for the brand-name manufacturer to recover the costs of its new drug. Once the patent ends, other pharmaceutical companies are free to manufacture and market the drug under another name, subject to FDA approval.

Enter the generic manufacturers. Since the chemical composition of the original drug is part of the public record, outside companies can replicate its formula — and sell it under its own name or under the label of a supermarket or department store chain. Sometimes, the original pharmaceutical company will produce its drug in another form in an effort to stay in the market.

These off-brands have the same active ingredients, strength and dosage as their brand-name counterparts. "The only difference between the drugs is that the manufacturer of the generic product does not have to prove to the FDA that it is safe and effective, because that already has been done," says Dr. Pearson. "The approval process of a generic drug takes much less time, usually within about two years from the time the company decides to manufacture it."

So should you always go generic? Not necessarily, says Dr. Pearson. Patients often wonder whether it is dangerous to switch from a generic product if they have been taking a name-brand product. Switching is usually safe — but there are exceptions.

Some drugs, both brand-name and generic, have what is known as a "Narrow Therapeutic Index (NTI)." That means the drug can produce toxic side effects or loss of disease control if it is absorbed or released at even the slightest changes in doses — whether too high or too low. Remember, there are "parameters" for bioavailability that must be met, not an exact number.

This is why many pharmacists, including Dr. Pearson, are unwilling to substitute generic products for drugs with an NTI. "Even the slightest change can result in upsetting the patient’s disease control," he says. "That’s why I would recommend against switching for such drugs. There’s a real possibility that it might upset a patient’s stability. It could be absorbed differently; it could have fillers or dyes that change the absorption or release of the dosage. While there may be side effects to switching, I have no knowledge of it ever being fatal. If there is a switch, it is essential to continually monitor the drug levels in the blood to make sure there is a minimal risk of toxicity.”

Among the drugs known to have an NTI:

  • Conjugated estrogen (Premarin), prescribed as hormone replacement therapy for prevention of osteoporosis or heart disease risk.
  • Phenytoin (Dilantin) and carbamazepine (Tegretol), anticonvulsants.
  • Theophylline (Theo-dur), for asthma and lung diseases.
  • Cyclosporine (Sandimmune or Neoral), used as an organ transplant antirejection drug.

Aside from the NTI drugs, it's usually safe to go with a generic drug, which is why some insurance companies will only pay for generic drugs or require an explanation if a doctor or pharmacist insists on a name-brand product. "A patient can say they do not want generic products," says Dr. Pearson. "But that means the insurance company will make them pay the difference in price, and in many cases that can be a substantial amount. Insurance companies may want the patient to pay the whole price. Then you will have to look for an insurance company with a more reasonable co-payment plan. Patients should keep a tight rein on what their insurance company is doing. Read the material they send you in the mail to look for any changes in the policy."

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