Why Generic Medicines Are Cheaper

Generic medicines cost less for two main reasons. The company making a generic does not have to repeat the long and expensive animal and human studies that were already carried out for the original medicine. And once the original medicine's patent ends, several companies are free to make the same medicine, so they compete on price.

Most medicines have two names. The generic name is the name of the active ingredient itself. The brand name is the name a company gives the medicine and sells it under.

A company that discovers a new medicine gets exclusive rights over it, called a patent, for a fixed period. While the patent runs, only that company can sell the medicine. Once the patent expires, other manufacturers are allowed to make and sell versions of the same medicine. Those versions are the generics.

A generic has to contain the same active ingredient as the original. It may look different - another colour, another shape, another box, made by another company - but the ingredient doing the work is the same.

This matters in a practical way in India. The same medicine is often available under several brand names, so two strips with different names on the box can contain exactly the same active ingredient in the same strength. When you collect a medicine, read the active ingredient and the strength printed on the pack, not just the name in large letters.

The costly research has already been done

Bringing a brand-new medicine to the market takes years of laboratory work, animal studies and human clinical trials before it can be approved for use. The company that paid for all of that recovers the cost through the price of the medicine while it has the market to itself.

A generic maker starts later, when all of it is already established. It does not repeat the animal and clinical studies the original company ran. Instead it has to show that its product behaves like the original inside the body, usually through a bioequivalence study in a small group of healthy volunteers. That is a far smaller and cheaper exercise than a full clinical trial programme.

For some simple, well-absorbed medicines, even that human study is not needed. Laboratory dissolution testing may be accepted in its place — what regulators call a biowaiver.

Competition pushes prices down

Once several companies make the same medicine, they can only win business by charging less. The effect is large and well measured. In the United States, the FDA reports that a single generic competitor is associated with price reductions of about 30%, and five competitors with nearly 85%.

In India, prices do not fall as freely as in the US market. The maximum retail price is printed on the pack, and the prices of many common medicines are capped by the government.

Money is not spent on promotion

Brand-name medicines are supported by advertising, sales teams visiting doctors and other marketing spend. Generic makers do very little of that, so the cost is never built into the price. It is a little like choosing a supermarket's own-label product over a familiar advertised brand: the contents are comparable, but you are not paying for the name.

• What the price includes: Discovery of the medicine; Brand-name medicine: Paid for by the original company; Generic medicine: Not repeated
• What the price includes: Animal and human studies; Brand-name medicine: Required before approval; Generic medicine: Not repeated; a smaller bioequivalence study is used instead
• What the price includes: Promotion and sales teams; Brand-name medicine: Usually heavy; Generic medicine: Usually minimal
• What the price includes: Number of companies selling it; Brand-name medicine: Often only one; Generic medicine: Several, competing on price

No. A lower price is a business outcome, not a statement about the medicine. A generic is approved only after it meets the same quality standards as the original and only after it is shown to be bioequivalent to it.

Regulators judge bioequivalence on two measurements: how much of the medicine is absorbed in total (called AUC) and how high the level in the blood rises at its peak (called Cmax).

The comparison is statistical. The values measured for the generic are compared with those for the original. The 90% confidence interval — the likely range of the true difference between the two products — has to fall between 80% and 125% for both measurements. That is the range the WHO uses, and most of the regulators that publish these limits use it too. In plain terms, the two products are allowed a small, defined margin of difference — a margin that exists because blood measurements of any medicine vary a little each time they are taken.

A few medicines are treated more strictly than this. Where the gap between a dose that helps and a dose that harms is very narrow, some regulators — the WHO and the EMA among them — apply tighter bioequivalence limits than the usual 80% to 125%. For these products, doctors often prefer that a patient stays on one particular make rather than moving between them. In practice, many doctors in India take the same approach.

In India, the Central Drugs Standard Control Organisation (CDSCO) oversees this. Its Bioavailability and Bioequivalence Division evaluates bioequivalence studies, approves the centres where those studies are run, and assesses whether a generic product is therapeutically equivalent to — and interchangeable with — the innovator product it is copied from. This work sits under the New Drugs and Clinical Trials Rules, 2019, and the studies themselves follow the Indian Good Clinical Practice guidelines.

What that means for you is straightforward. A generic medicine sold in India has had to show that it matches the original product in the body, not merely that it contains the same ingredient on paper.

Prescription status does not change just because a medicine is generic. Prescription medicines in India cannot be bought without a valid doctor's prescription, and that applies to the generic version exactly as it does to the branded one.

Cheaper is not automatically right for everyone. There are situations where your doctor may want you to stay on one particular product:

• Medicines with a narrow safety margin.
• An allergy or sensitivity to an inactive ingredient, such as a colouring or a filler, present in one version and not in another.
• Long-acting or specially formulated products, where the way the medicine is released into the body matters.
• A medicine you have been stable on for years, where your doctor would rather not disturb what is working.

If you get a rash, swelling of the face, lips or tongue, or any difficulty breathing after taking a medicine, stop and get medical help straight away. In India, call 112 in an emergency or 108 for an ambulance.

If you are pregnant or breastfeeding, generic versus brand is not the question that matters most. What matters is whether that medicine is suitable for you at all, and only your doctor can judge that.

1. Ask your doctor or pharmacist whether a generic version of your prescribed medicine is available for the condition being treated, and whether a government generic medicine store near you stocks it.
2. Ask before changing anything. Never swap, stop or restart a prescription medicine on your own.
3. Buy only from a licensed pharmacy, online or offline. Unregistered websites may sell medicines that are out of date, diluted or fake.
4. Check the pack each time you collect it: active ingredient, strength, batch number and expiry date.
5. If your doctor has asked you to stay on one particular product, keep to it.
6. Store medicines as directed on the pack and check the expiry date before you use them.