Why You Can’t Get a Lower Cost Generic Drug

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Pharmaceutical manufacturers spend millions of dollars developing, testing, and marketing new drug products. The vast majority of new chemical entities never make it to market. When a drug does finally get FDA approval, much of the 20 year patent exclusivity is already used up on the time spent in clinical trials (typically about 12 years).  So it’s not surprising that pharmaceutical companies would want to try to extend the life of the patent and make a greater profit on their brand name drug.

Here are some strategies that drug companies use to protect their products from competition by less expensive generic drugs:

  1. Change the formulation: A drug company may make a time-released version of their drug to replace an earlier formulation. The new formulation has a new patent and the generic (of the original formulation) cannot be substituted once it becomes available. So Namenda 10mg twice a day becomes Namenda XR 21mg once daily. You could certainly make the argument that once daily dosing is more convenient, especially for the patients taking this Alzheimer’s drug, but the high cost may not be justifiable for many patients.


  1. Make a combination product: Drug companies may combine 2 products in one tablet, thus creating a new product which will have a patent life that extends beyond the patent of the single drug products. Pfizer did this by combining Norvasc and Lipitor into a combo pill called Caduet, a pill that fights both hypertension and high cholesterol, and offers the benefit of fewer pills for the patient to worry about taking every day. People switched to Caduet could not get generics for Norvasc and Lipitor once they became available, unless the doctor rewrote the prescription for the individual products. Again, more convenient, but is it worth the cost?


  1. Refine the drug molecule: This strategy involves more chemistry and actually creates a new chemical entity out of an old drug. One popular method involves isolating one isomer of a chemical. Isomers are one or more compounds with the same chemical formula but a different arrangement of atoms. Isomers may have different chemical properties due to these differences. For example, omeprazole (Prilosec), a drug for reflux contains both R and S isomers. The manufacturer isolated the S isomer and named it esomeprazole (Nexium) and a new patent was born. The new drug worked about the same as the old drug and was not available in generic form for several more years.


  1. Pay for delay: This is perhaps the most objectionable method of preventing generic competition. A drug company may simply pay the generic manufacturer to not bring the competing generic drug to market when the patent has expired. A drug may gain several more months or years of exclusivity and the cost of paying the competitor may be well worth it, considering the profits on a blockbuster drug. According to the Federal Trade Commission, deals like this can cost consumers $3.5 billion yearly. More about that here


Ask your pharmacist about less expensive alternatives. They know the tricks of the trade.

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