Is the Brand Name Drug Really Better than the Generic?
To Your Health -- CHRC Newsletter
Summer 2001
By Maria Lopez, Pharm. D candidate
(UCSF student rotating at PAMF),
Lori Reisner, Pharm.D.,
Clinical Pharmacy Coordinator, PAMF, and
Associate Clinical Professor of Pharmacy, UCSF
Often, people wonder if a generic drug is just as good as its brand-name counterpart. Why all the fuss? Should consumers be concerned when they receive generic drugs from their pharmacy?
Definition of a generic drug and the FDA requirements
A generic drug is the chemical equivalent of a drug that has an expired patent. When a brand name drug's patent expires, other pharmaceutical companies can produce the same active chemical compound and sell the drug under its generic name. In the United States, the Food and Drug Administration (FDA) requires that all drugs, whether a brand name drug or a generic drug, meet standards of safety, strength, purity and effectiveness. A drug may be chemically exact but not bioequivalent. In other words, two different products of the same drug may not get into the body in exactly the same way. Bioequivalence depends on how the drug is formulated and how it is absorbed and eliminated by the body. Other ingredients can affect the absorption of the drug. These include starch fillers, gum-like substances and other products which allow a drug to be formulated into a pill or capsule. Factors such as a person's age, body mass, kidney, liver and intestinal function can also affect the absorption of the drug by the body.
For a drug to be marketed under a generic label, the manufacturer must comply with FDA standards. The FDA states that generic drugs must be therapeutically equivalent to the brand name drug. Numerous studies have attempted to show differences in brand and generic drugs. With a few exceptions, most studies have not shown true statistical differences between brand name drugs and generic drugs. The few cases where differences exist occur mostly in drugs that have a narrow "therapeutic index." The "therapeutic index" is the difference between the drug's effective amount in the body and the level at which the drug causes an undesirable or toxic effect.
In order to ensure its safety and effectiveness, a generic drug undergoes intensive testing. The FDA sets up guidelines and requires strict testing in order to determine which drugs act the same way in the body. Generic drugs that have been tested and approved by the FDA to be therapeutically equivalent to brand name drugs are published in a guide that is updated monthly and is found in most pharmacies. The guide lists drugs classified as therapeutically equivalent to each other, and gives them an "A" rating. If the FDA does not consider a drug therapeutically equivalent, it is given a "B" rating. Most pharmacies purchase drugs with an "A" rating to dispense as generic. Ask your pharmacist about the rating of your particular generic medication.
Drug costs continue to rise
Price appears to be the real difference between most brand and generic drugs. Rising health care costs -- and the cost of drugs in particular -- have received a lot of media attention. The fastest growing segment of health care costs is prescription benefits, which is increasing at an average rate of 11.2% annually. Senior citizens are especially at risk for rising drug costs. Drug costs for seniors are rising faster than for any other age group. Among patients 70 years and older, drug costs rose 14% in 1999, while the average drug costs for all other age groups rose 9.6%. In late July 2000, several health maintenance organizations (HMOs) announced they would pull out of the Medicare program by the end of the year, affecting nearly a million senior citizens. The HMOs state that they can no longer afford to insure seniors. A number of factors account for these rising costs. Advances in technology (gene therapy and biotechnology, for example) have contributed to the increases. People are living longer and using more drugs to do so. It is fair to add that some of the new expensive drugs are actually less costly overall than conventional therapies, such as surgery.
Generic drugs are less expensive than brand name drugs
Generally, generic drugs are less expensive than brand name drugs. On average, most generic drugs are approximately half the price of their brand name counterparts. Based on 1999 values of the Average Wholesale Price, the brand name blood pressure drug called Hydrodiuril® was eight times more expensive than its generic counterpart, hydrochlorothiazide. The anti-depressant Elavil® was twice the cost of its generic amitriptyline. However, tamoxifen is an exception to the rule. Here, the brand name manufacturer bought exclusive rights to the generic. Since the same company owns the rights to both brand and generic tamoxifen, the price for the generic is only 1 cent less! Currently, the Federal Trade Commission is investigating the manufacturer's actions, since they appear to have discouraged other companies from marketing generic tamoxifen.
Presently, many drug companies are merging, with larger companies acquiring smaller generic companies. These changes have affected the price difference between brand and generic products. Since a company may own both the brand and generic names, it prices the generic at a higher price to discourage sales of the generic. Because of this, people may not get the savings benefits of generic drugs.
What contributes to the cost of drugs?
Why are drugs so expensive? There are various answers to this question. Technology has played a role in the development of more effective medications. Creation of larger manufacturers through mergers and buy-outs of smaller pharmaceutical companies has provided the opportunity to increase the cost of generic medications. Annual inflation plays a role, as does the increased utilization of drugs by the American public. Pharmaceutical companies explain the need for making a profit as being tied to the research and development costs for newer, more effective medications. The estimated cost of research and development in the year 2000 is estimated at $38 billion. To put this in perspective, the budget for federal research is approximately a third of this figure. It takes an average of seven years for a drug to go through the FDA approval process, thus delaying any potential profits.
The marketing of drugs by pharmaceutical companies is expensive. Marketing strategies include advertisements in all of the media, weekend and dinner meetings for physicians and pharmacists to promote specific drug "give-aways" with the pharmaceutical company's logo (pens, magnets, pads of paper, etc.) and drug samples to physicians. These promotions are intended to increase physician and consumer exposure to information about a particular drug. This exposure to information may increase consumer requests for certain drugs that have not been previously prescribed by the physician.
Pharmaceutical companies also provide grants to medical groups, universities and hospitals to develop educational programs for patients with specific disease conditions. These grants assist in the development costs and ongoing costs of programs and services that help patients maintain optimal healthy living. These funds are provided as a part of the community benefit monies pharmaceutical companies designate as efforts to partner with physicians.
Should consumers pay more for brand name drugs?
The human body is always changing, and factors such as diet, metabolic rate and hormones can affect how a drug acts in the body. For the most part, these changes are not cause for alarm, but it is important to realize that a person may try the same brand or generic medication and have a different experience at different times. However, in most instances, the generic and brand name drugs are both working in the body.
Without much success, a number of studies have attempted to prove particular brand drugs are more efficacious than their generic counterparts. Of particular controversy is one well-publicized story in which a brand name manufacturer paid a university researcher to prove the brand drug was superior to the generic. The researcher actually found the generic to be equivalent and even somewhat better. What resulted was a long battle between the researcher and the manufacturer, because the manufacturer refused to publish the data to support that the generic was superior to their brand name drug. Seven years later, the brand manufacturer published another study opposing the researcher's results. However, the FDA is now requiring all manufacturers of that drug to demonstrate that their products are equivalent.
To summarize, generic drugs, if they have been approved by the FDA, are as safe and effective as the brand name product. Pharmacists, using scientific information, ensure patient safety. This often means recommending alternative therapies to providers and patients. A final note to think about is that receiving a generic drug is not like shopping at a discount retailer for a pair of jeans. If the clothing industry had guidelines similar to drug manufacturers, copy-cat jeans would be required to use the same material, thread, stitching and so on that higher end manufacturers use to make a pair of famous-name pants. Of course, one cannot compare a drug's effect on the body to the appearance and durability of a pair of jeans, but if the government required both pairs of jeans to be exactly alike, would you still want to pay the higher price?
References
Keith LG, Oleszcjuk JJ, Stika CS, Stine S. Generics: What's in a name? Int J Fertil. 1998;43:3:139-49.
Marsh DA, Hoar ME. The brand name versus generic controversy: is there a segment of the pharmaceutical industry that produces drugs of higher quality? Contempo Pharm Practice. 1982;5:2:130-5.
Mehl B, Santell JP. Projecting future drug expenditures-2000. Am J Health Syst Pharm. 2000;57:129-38.
Noonan D, Raymond J, Gessalman AB. Why drugs cost so much. Newsweek, September 25, 2000.
Schwarts LL. The debate over substitution policy. Its evolution and scientific basis. Am J Med. 1985;79:2B:38-44.