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U.S. Department of Health and Human Services

For Consumers

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New Initiative to Improve Availability of Generics

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On Oct. 4, 2007, FDA announced the Generic Initiative for Value and Efficiency (GIVE), a new program aimed at optimizing the generic drug review process to increase efficiency.

The truth about generic drugs

People tend to have the wrong impression about generic drugs.

"It's generally believed that if something costs more, it must be of better quality," says Gary Buehler, R.Ph., Director of FDA's Office of Generic Drugs. "In the case of generic drugs, this is not true. The standards for quality are the same for brand-name and generic products."

Here are the facts:

  • Generic drug applications undergo a rigorous review by FDA before they can be approved.
  • Generic drugs are of the same quality as, and are equivalent in safety and effectiveness to, their brand-name counterparts.
  • A generic drug must also be the same dosage, and have the same route of administration and conditions of use, as its brand-name drug.
  • A company that markets a generic drug must show that the product delivers the same amount of its active ingredient, over the same amount of time, as the brand-name product.
  • Generic products are used in more than 50% of all prescription drug purchases in the United States.

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Why do generic drugs cost less?

In 2004, FDA's Center for Drug Evaluation and Research (CDER) found that drug costs per day can fall by 14% to 16% if patients use generics instead of branded drugs, depending on their medical needs. Patients whose needs can be fully satisfied with generics could enjoy reductions of 52% in the daily costs of their medications.

Generics cost less than brand-name drugs, mostly because manufacturers of generic drugs do not have the expense of research, development, and advertising related to a new drug.

Those expenses are taken on by the companies that do develop new drugs. These firms protect their investments with patents that give the companies the sole right to sell drugs while the patents are in effect.

Most new drugs are protected by patents for 17 years.

When the patent for a drug does expire, other drug companies can start selling the generic version of the drug—after they test the drug and FDA approves it.

"Because generic drug manufacturers don’t develop a drug from scratch, they can sell their product at substantial discounts," says Buehler. "Also, there is greater competition and less advertising, which keeps the price down."

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"Bioequivalence" required

Makers of generic drugs are not required to repeat the extensive clinical trials that have already been used in the development of the original drug, says Buehler. "But they must scientifically demonstrate that their product is bioequivalent. This means that it performs in the same way as the brand-name drug."

In the United States, trademark laws do not allow generic drugs to look exactly like the brand-name drug. Thus, colors, flavors, and certain other characteristics may be different. "But these differences don’t affect the way the drugs work or the way they are evaluated by FDA," says Buehler. "The generic drug must have the same active ingredients."

Consumers and their health care providers should decide whether it is best to use the brand-name or generic version of a medicine. In addition, consumers should always ask whether they are being prescribed a generic or brand-name drug, and why that particular drug was prescribed.

For more information about generic drugs, contact your doctor, pharmacist or other health care worker. You can also visit the FDA Web sites provided in "For More Information."

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This article appears on FDA's Consumer Updates page, which features the latest on all FDA-regulated products.

Date Posted: October 4, 2008