A generic drug (generic drugs, short: generics) is a
drug defined as "a drug product that is comparable to
brand/reference listed drug product in dosage form, strength, route of
administration, quality and performance characteristics, and intended
use."[1]
It has also been defined as a term referring to any drug marketed under
its chemical name without advertising.[2]
Although they may not be associated with a particular company,
generic drugs are subject to the regulations of the governments of
countries where they are dispensed. Generic drugs are labeled with the
name of the manufacturer and the
adopted name (nonproprietary name) of the drug.
A generic drug must contain the same active ingredients as the
original formulation. According to the
U.S. Food and Drug Administration (FDA), generic drugs are identical
or within an acceptable
bioequivalent range to the
brand-name
counterpart with respect to
pharmacokinetic and
pharmacodynamic properties. By extension, therefore, generics are
considered (by the FDA) identical in dose, strength, route of
administration, safety, efficacy, and intended use.[3]
The FDA's use of the word "identical" is very much a legal
interpretation, and is not literal. In most cases, generic products
are available once the
patent
protections afforded to the original developer have expired. When
generic products become available, the market competition often leads to
substantially lower prices for both the original brand name product and
the generic forms. The time it takes a generic drug to appear on the
market varies. In the US, drug patents give 20 years of protection, but
they are applied for before clinical trials begin, so the "effective"
life of a drug patent tends to be between seven and 12 years.[citation
needed]
Prescriptions may be issued for drugs specifying only the chemical
name, rather than a manufacturer's name; such a prescription can be
filled with a drug of any brand meeting the specification. For example,
a prescription for
lansoprazole can be filled with generic lansoprazole, Prevacid,
Helicid, Zoton, Inhibitol, or Monolitum.
A generic drug of biological type (e.g.
monoclonal antibodies), is different to chemical drugs because of
its biological nature and it is regulated under extended set of rules
for it; see
Biosimilars.
Economics
Generic drugs are usually sold for significantly lower prices than
their branded equivalents. One reason for the relatively low price of
generic medicines is that competition increases among producers when
drugs no longer are protected by patents. Companies incur fewer costs in
creating generic drugs (only the cost to manufacture, rather than the
entire cost of development and testing) and are therefore able to
maintain profitability at a lower price. The prices are low enough for
users in many less-prosperous countries to afford them. For example,
Thailand has imported millions of doses of a generic version of the
blood-thinning drug
Plavix (used to help prevent heart attacks), at a cost of 3 US cents
per dose, from India, the leading manufacturer of generic drugs.[4]
In the UK, generic drug pricing is controlled only by the
reimbursement price. Beneath this, the price paid by chemists and
doctors is determined mainly by the number of licence holders, the sales
value of the originator brand and the ease of manufacture. A typical
price decay graph will show a 'scalloped' curve,[5]
which usually starts out on the day of generic launch at the brand
price, and then falls as competition intensifies. After some years, the
graph typically flattens out at approximately 20% of the originator
brand price. In about 20% of cases, the price 'bounces', which means
some licence holders withdraw from the market when the selling price
dips below their cost of goods. The price then rises for a while until
they re-enter the market with new stock.[6][7]
Generic manufacturers do not incur the cost of
drug discovery. Sometimes,
reverse-engineering is used to develop
bioequivalent versions to existing drugs.[8]
Generic manufacturers also do not bear the burden of proving the
safety and
efficacy of the drugs through
clinical trials, since these trials have already been conducted by
the brand name company. (See the
Approval and regulation section, below, for more information about
the approval process.) The average cost to brand-name drug companies of
discovering and testing a new innovative drug (with a new chemical
entity) has been estimated to be as much as $800 million.[9]
Merril Goozner estimates the true cost is closer to $100–$200 million.[10]
Generic drug companies may also receive the benefit of the previous
marketing efforts of the brand-name drug company, including media
advertising, presentations by drug representatives, and distribution of
free samples. Many drugs introduced by generic manufacturers have
already been on the market for a decade or more, and may already be well
known to patients and providers (although often under their branded
name).
For as long as a drug patent lasts, a brand name company enjoys a
period of “marketing exclusivity” or
monopoly, in which the company is able to set the price of the drug
at a level which maximizes
profitability. The profit often greatly exceeds the development and
production costs of the drug. (This is partially offset by research and
development of other drugs which do not make a profit.) The advantage of
generic drugs to
consumers comes in the introduction of
competition, which prevents any single company from dictating the
overall market price of the drug. Competition is also seen between
generic and name-brand drugs with similar therapeutic uses when
physicians or health plans adopt policies of preferentially prescribing
generic drugs as in
step therapy. With multiple firms producing the generic version of a
drug, the profit-maximizing price generally falls to the ongoing cost of
producing the drug, which is usually much lower than the monopoly price.[11]
Patent issues
When a generic drug can be produced
When a pharmaceutical company first markets a drug, it is usually
under a
patent that, until it expires, allows only the pharmaceutical
company that developed the drug (or its licensees) to sell it. Generic
drugs can be produced without patent infringement for drugs where: 1)
the patent has expired, 2) the generic company certifies the brand
company's patents are either invalid, unenforceable or will not be
infringed, 3) for drugs which have never held patents, or 4) in
countries where the drug does not have current patent protection. Patent
lifetime differs from country to country; typically an expired patent
cannot be renewed. In the U.S., patent extensions may be granted if
changes are made; some pharmaceutical companies have sought extensions
on things as minor as changes to the shape and color of the pill;
generic makers are excluded while the adjudication of the extension is
considered. A new version of the drug with significant changes to the
compound could be patented, but this requires new clinical trials. In
addition, a patent on a changed compound does not prevent sales of the
generic versions of the original drug unless regulators take the
original drug off the market, as happened in the case of
terfenadine.
This allows the company to recoup the cost of developing that
particular drug. After the patent on a drug expires, any pharmaceutical
company can manufacture and sell it; only manufacturing cost will be
incurred, which is a small fraction of the cost of original testing and
development of the drug.
In the U.S., the
Patient Protection and Affordable Care Act, which President Obama
signed on March 23, 2010, authorized the Food and Drug Administration to
approve generic versions of
biologic drugs and grant biologics manufacturers 12 years of
exclusive use before generics can be developed. This
biosimilar products are usually protected by surrounding patents
which may also delay the time for their production.
When several top selling drugs go off-patent within a short period of
time an interesting phenomenon called
patent cliff arises opening opportunities for generic drug
manufacturers.
Challenging
patents
Brand-name drug companies have used a number of strategies to extend
the period of market exclusivity on their drugs, and prevent generic
competition. This may involve aggressive litigation to preserve or
extend patent protection on their medicines, a process referred to by
critics as “evergreening”.
Patents are typically issued on novel pharmacological compounds quite
early in the
drug development process, at which time the ‘clock’ to patent
expiration begins ticking. Later in the process, drug companies may seek
new patents on the production of specific forms of these compounds, such
as single
enantiomers of drugs which can exist in both “left-handed” and
“right-handed” forms,[12]
different inactive components in a drug
salt,[13]
or a specific
hydrate
form of the drug salt.[14]
If granted, these patents ‘reset the clock’ on patent expiration. These
sorts of patents may later be targeted for invalidation (“paragraph IV
certification”)[15]
by generic drug manufacturers.[16][17][18]
Generic drug exclusivity in the US
The U.S. FDA offers a 180-day exclusivity period to generic drug
manufacturers in specific cases.[19]
During this period, only one (or sometimes a few) generic manufacturers
can produce the generic version of a drug. This exclusivity period is
only used when a generic manufacturer argues that a patent is invalid or
is not violated in the generic production of a drug, and the period acts
as a reward for the generic manufacturer who is willing to risk
liability in court and the cost of patent court litigation. There is
often contention around these 180-day exclusivity periods because a
generic producer does not have to produce the drug during this period
and can file an application first to prevent other generic producers
from selling the drug.
Recently, the purpose of the exclusivity "bonus" provided for by the
Hatch-Waxman amendments was turned on its head when the original
patent holder,
Cephalon, instituted patent infringement suits against all companies
holding generic exclusivity rights to manufacture
modafinil, the generic name for Cephalon's still-profitable
stimulant drug, Provigil. "Settlement" of this suit with Cephalon
was hardly a risky endeavor for the generic manufacturers, as it was
Cephalon which agreed to pay Provigil's alleged infringers in excess of
a billion dollars – if they agreed not to market generics for Provigil
during their period of exclusivity. In effect, Cephalon was able to
extend its exclusive right to manufacture Provigil even though
Cephalon's patent for it had already run out.[citation
needed]
Large pharmaceutical companies often spend millions of dollars
protecting their patents from generic competition.[citation
needed] Apart from litigation, companies use other
methods, such as reformulation or licensing a subsidiary (or another
company), to sell generics under the original patent. Generics sold
under license from the patent holder are known as
authorized generics;[20]
they are not affected by the 180-day exclusivity period, as they fall
under the patent holder's original drug application.
A prime example of how this works[21]
is
simvastatin (Zocor), a popular drug created and manufactured by
US-based
Merck & Co., which lost its US patent protection on June 23, 2006.
India-based
Ranbaxy Laboratories (at the 80 mg strength) and Israel-based
Teva Pharmaceutical Industries (at all other strengths) received
180-day exclusivity periods for simvastatin; due to Zocor's popularity,
both companies began marketing their products immediately after the
patent expired. However,
Dr. Reddy's Laboratories also markets an authorized generic version
of simvastatin under license from Zocor's manufacturer, Merck & Co.;
some packages of Dr. Reddy's simvastatin even show Merck as the actual
manufacturer and have Merck's logo on the bottom.
Approval and
regulation
Ensuring
bioequivalence
Most nations require generic drug manufacturers to prove their
formulation exhibits
bioequivalence to the innovator product.[22][23][24][25][25][26][27]
In the U.S., the FDA must approve generic drugs just as innovator drugs
must be approved.[28]
The FDA requires the bioequivalence of the generic product to be between
80% and 125% of that of the innovator product.[29]
This value range is part of a statistical calculation, and does not
mean the FDA allows generic drugs to differ from the brand name
counterpart by up to 25 percent. FDA recently evaluated 2,070 human
studies conducted between 1996 and 2007, which compared the absorption
of brand name and generic drugs into a person’s body; they were
submitted to the FDA to support approval of generics. The average
difference in absorption into the body between the generic and the brand
name was 3.5 percent, comparable to differences between two different
batches of a brand name drug.[30][31]
Bioequivalence, however, does not mean generic drugs must be exactly
the same (“pharmaceutical equivalent”) as their innovator product
counterparts, as chemical differences may exist (different
salt or
ester – a “pharmaceutical alternative”).[citation
needed]
A physician survey in the US found only 17% of prescribing physicians
correctly identified the USFDA's standards for bioequivalency of generic
drugs.[32]
A latest development to address this issue enables interested doctors
and consumers to check generic drug interactions and outcomes detail to
the specific drug and drug company.[33]
The generic equivalent of
warfarin has only been available under the brand name
Coumadin in North America until recently. Warfarin (either under the
trade name or the generic equivalent) has a narrow therapeutic window
and requires frequent blood tests to make sure patients do not have a
subtherapeutic or a toxic level. A study performed in the
Canadian
province of
Ontario
showed that replacing Coumadin with generic warfarin was safe.[34]
In spite of the study, many physicians are not comfortable with their
patients taking the branded generic equivalents.[35]
In some countries (for example, Australia) where a drug is prescribed
under more than one brand name, doctors may choose not to allow the
pharmacist to substitute a brand different from prescribed unless the
consumer requests a generic brand.[36]
Generic versions of biologic drugs, or
biosimilars, require additional tests to bioequivalency involving
clinical trials for
immunogenicity. These products cannot be entirely identical due to
the batch to batch variability and their intrinsic biological nature and
are governed by extra sets of rules by the FDA in the US and the EMA in
Europe.[37]
U.S.
generics approval process
Enacted in 1984, the U.S.
Drug Price Competition and Patent Term Restoration Act, informally
known as the Hatch-Waxman Act, standardized U.S. procedures for
recognition of generic drugs. An applicant files an
Abbreviated New Drug Application (ANDA) with the
Food and Drug Administration (FDA), and seeks to demonstrate
therapeutic equivalence to a specified, previously approved “reference
listed drug”. When an ANDA is approved, the FDA adds the drug to its
Approved Drug Products list, also known as the
Orange Book, and annotates the list to show equivalence between the
reference listed drug and the approved generic. The FDA also recognizes
drugs using the same ingredients with different bioavailability, and
divides them into therapeutic equivalence groups. For example, as of
2006, diltiazem hydrochloride had four equivalence groups, all using the
same active ingredient, but considered equivalent only within a group.[38]
On October 4, 2007, FDA launched the
Generic Initiative for Value and Efficiency, or GIVE.[39]
GIVE will use existing resources to help FDA modernize and streamline
the generic drug approval process. It also aims to increase the number
and variety of generic drug products available. Having more generic-drug
options means more cost-savings to consumers, as generic drugs cost
about 30 percent to 80 percent less than brand name drugs.
In the United States, generic drug substances are
named through review and recommendation of the United States Adopted
Names (USAN) Council.
Nomenclature
Generic drug names are constructed using standardized
affixes
that separate the drugs between and within classes and suggest the
action of the drug.
Litigation and U.S. Supreme Court ruling
Two women, who claimed to have suffered severe medical complications
from a generic drug, lost their Supreme Court appeal on Thursday, June
23, 2011, essentially ending their separate lawsuits against
pharmaceutical manufacturers.
The justices in a 5-4 ruling said generic drug companies do not share
the same level of responsibility as makers of brand-name equivalents and
do not have to update their warning labels when significant new risks
emerge.
The financial and safety implications from the court's ruling could
prove decisive.[40]
See also