drug costs patents expiring

Some of the most popular drugs on the market will soon have generic alternatives, which can save consumers thousands of dollars each year. In our last post , we broke down how the increasing number of available generic drugs might impact cost, and consumers. Here we’ll look at how the FDA’s effort to bring more generics to market, improve the inspections process, and what that means for you. 

drug costs patents expiring

Generic drugs are “bio-equivalent” to brand name drugs. In other worlds, they have the same chemicals. But generics are allowed to have different binders and other non-active ingredients, so they often look different, in addition to having a different name. Before one can go on the market, it must be vetted by the Food and Drug Administration. As we noted in our last post:


  • Generic drugs run about 80 to 85 percent cheaper than brand-names.
  • They accounted for about 75 percent of prescriptions dispensed in the U.S., up from 57 percent in 2004.
  • A generic captures 90 to 90 percent of the market for a drug when it hits pharmacies.


For years, approval for generic pharmaceuticals has bottle necked at the FDA. The agency didn’t have enough staff to sift through the growing number of applications. That looks likely to change. The FDA is finalizing an agreement with generic drugs makers that would help expedite the approval process, as the New York Times reported. But there have been some hiccups. The numbers tell why:


  • About 80 percent of the active ingredients in drugs are made overseas, often in plants in China and India that are not regularly inspected–and may not even have a clear addresses, as the NY Times reports this month.
  • A 2008 audit by the Government Accountability Office found the FDA did not even know how many plants were subject to inspection–estimates ranged from 3,000 to 6,800.


The new agreement between generic drug makers and the FDA will help clear up a backlog of approvals, and likely increase the number of inspections, which in turn may help ease risks and consumer fears.


Once they make it to market,  most generics are safe and effective, said Dr. Julie Marie Donohue, associate professor of health policy and management at the University of Pittsburgh.


“The vast majority of studies that have compared the effectiveness and brand named drugs have found them to be clinically equivalent—in other words, they work the same in patients,” said Donohue. “I think they’re might be a handful of drugs where they are found to be less effective.”


“I think the benefit of generics far outweighs the risks,” Donohue added. “I think the testing and approval process has led to an effective system. Seventy-five percent of prescriptions are generic. They’re obviously working for most people.”


Some people are still wary when their familiar pill gets replaced with a generic. The FDA has tried to combat myths around generics, offering up a long FAQ to drive home the point that generics can we swapped in for brands with no problem.


This is good news for consumers. With drug companies footing the bill for inspections, hundreds of new generics may hit the market, increasing options for the insured and the uninsured when they head to the pharmacy counter.