In this economy, patients in the United States have turned to generic prescription drugs instead of brand name medications to treat their ailments. Generic drugs are similar to their brand name counterparts; dosage, side effects, risks, strength and much more. The only difference is that generic drugs are relatively cheaper than brand name products.
Due to the costs involved, consumers may question the quality and effectiveness of the generic item. This is just a baseless concern because the U.S. Food and Drug Administration (FDA) mandates that generic drugs follow the same regulations and administrative routes as some of the biggest brand names in the world today.
The reason why generic medications are cheaper is because these manufacturers do not have budgets for the development and marketing of their new drug. This is compared to the brand names that spend a large sum of their budgets on research, marketing and promotion and acquire a patent. Another factor is competition, which usually drives the prices of goods and services in the economy down.
Essentially, it is generally a myth that generic drugs are inferior in quality and effectiveness than their brand name competitors.
What should be noted is that the price gap between brand name drugs and generic versions is widening, according to a report published this quarter titled the Express Scripts Prescription Price Index. It found that prices for brand names have been on the rise since 2008, while generic brand price tags have been dropping since the same timeframe.
For instance, the report suggested that a name-brand drug in 2008 would have cost $100 but that number would jump to nearly $190 in 2013. On the other hand, generic drugs that were valued $100 in 2008 would be just under than $50 today (2008 dollars).
The conclusion that is being made is that drug makers are increasing their prices in order to garner enough revenues in their smaller portfolios because of generics. Of course, the cheaper the better, according to Dr. Steve Miller, the chief medical officer of Express Scripts, the author of the study and manager for drug benefits for companies.
“When we save people money, that’s when we make money,” Dr. Miller told the New York Times last year. “We don’t shy away from that.”
Two years prior to the results of this study, the AARP published a study that discussed the prices of brand name drugs. It released five important points for its users to understand regarding the drug industry:
- People don’t want to switch medicines
- Brands cannot compete with generics
- Branded drugs are growing niche products
- Pharmaceuticals start off cheap but then become expensive
- Being expensive is the route to success
Drug prices do vary with each passing year, however. An example would be Abilify, an anti-psychotic drug for bipolar disorder, depression and schizophrenia that has been approved by the FDA. The average Abilify price is around $700 for a 30-day supply of 2mg dosage. Cymbalta, meanwhile, is used to fight depression and social anxiety disorder. The average Cymbalta price is over $200 for the same supply of 20mg dosage.
With rising healthcare and pharmaceutical costs, consumers and perhaps even government bodies are likely going to shift to the generic drug market in the future to save money – in addition to budget constraints for federal and state governments – and to combat inflation. Don’t be surprised to see even higher brand name drug prices in the next three years.