Generic Drugs in the USA

Generic Drugs Definition

Generics are full-fledged analogs of branded (parental, original) drugs that third-party manufacturing companies acquire the right to release after the original developer of the drug, who is the patent holder for it, is deprived of patent protection for its invention. In most cases, the term of patent protection is between 14 and 18 years. Unlike their prototypes, generics do not receive patent protection, which is due to the fact that they are produced according to a ready drug formula, the rights to which belong to the inventor company even after the patent protection expires. Generics are analogs of branded drugs with the corresponding active ingredient in relation to the pharmaceutical profile, namely, with respect to the recommended dosage, effect, intended purpose of use, side effects and contraindications. At the same time, the external characteristics of generics may differ from those inherent in branded drugs: the taste of suspensions, color, tablet shape and packaging design can vary in any possible way. These parameters are not required to match those of branded drugs, although many generic manufacturers are trying to approximate the appearance of their products to the corresponding brand name drugs in order to increase consumer confidence and sales.

Some US consumers are concerned that generics are being released on the pharmaceutical market in a simplified manner, without clinical trials. However, drug regulatory systems around the world, as in the United States, still require studies to prove that the generic is as safe and effective as the reference drug for drug approval. Otherwise, any unscrupulous manufacturer could produce placebos or other questionable substances. In order for a generic to be approved in the United States, regulatory authorities require bioequivalence studies to show that the amount of active ingredient entering the human body will be identical when the same dose of the original and generic drugs is taken over a period of time. The positive side of this approach is also that it prevents unnecessary and unethical repetition of large-scale clinical trials in humans and animals. In practice, in some cases in the 2010s in the United States, one generic was compared to another generic previously marketed rather than a reference drug. This was not in line with international practice, and control over the generic approval process was strengthened as the approach raised doubts about the safety, efficacy and quality of all generic drugs. Read more about cheap genercs of Cialis.

Referring to not a small molecule (ibuprofen, sildenafil) or their combination, but about a large, mainly proteinaceous, then such drugs are called not generics, but biosimilars. These include, but are not limited to, insulin, vaccines, and monoclonal antibodies that are used to treat cancer. Such drugs are created by living organisms (for example, algae bacteria or Chinese hamster cells). It is very difficult to organize the production of biosimilars, and in any case it will not be possible to make an exact copy. In this regard, the production and approval of bisimilars is a much more complex process, and the number of biosimilars does not exceed 6% of original medicines of this kind.

Approximate Volume of US Generic Market

Over the past few years, the share of generics in the US pharmaceutical market has been growing steadily. Generic drug sales have seen a particularly sharp increase since the start of the coronavirus pandemic. In 2020, sales of analogs of a wide variety of branded drugs in the United States surpassed the $127 billion mark. A fairly large proportion of generic market is accounted for by generics of prescription drugs: about 80% of all prescription drugs sold in the United States are generics of American or foreign origin. At the same time, the share of generics produced abroad is steadily growing. This is due to the popularity of more affordable generics, which mainly Asian manufacturers offer in abundance. They satisfy the existing demand for inexpensive generic medications, but some regard them as a potential threat to American manufacturers of not only original drugs, but also less affordable generics. Still, generic companies compete with each other, but they have no competition with the originator, since this is actually a different market, albeit for a drug with the same confirmed activity. Therefore, cheap Asian generics threat American-made ones rather than branded medicines.

Generics in the USA: Dynamics

It is noteworthy that the growth of the US generics market got a boost in 2008. Obviously, the reason for this was the onset of the global financial crisis. This hypothesis is confirmed by the fact that a similar situation with an explosive growth in the popularity of generics and an increase in their production was observed in many other countries of the world, including those where traditionally the share of generics in the total pharmaceutical market did not exceed 5-10%.

Despite the explosive growth in 2008, generics were not sensationally new in the US pharmaceutical market at the time. Their march across the United States began about two decades earlier. At the beginning of the 1990s, generics already accounted for just under a quarter of all prescription drugs in American pharmacies. These are already quite large numbers, especially given the strict US pharmaceutical legislation and the strong position of the major American drug manufacturers known as Big Pharma and united under the umbrella of Pharmaceutical Research and Manufacturers of America. Traditionally, among American drug manufacturers, Big Pharma includes Pfizer, Johnson & Johnson, Merck & Co, AbbVie, Gilead Sciences and Amgen. Their products enjoy the unconditional trust of consumers, but they are distinguished by high prices.

Why Are Generic Drugs That Popular in the US?

When one of several drugs for the same disease becomes very popular, there can be two explanations: either it has unique therapeutic properties, or it is much cheaper than others. Since generics do not differ in their action from their prototypes, it can be concluded that the reason for their popularity among American consumers is their low cost. Most generics of those drugs that are dispensed without a doctor's prescription are 60-80% cheaper in the United States. However, there is another side to the issue. In the past three to five years, there has been a clear softening of the attitude of pharmaceutical legislation towards generics in the United States. The range of generics of a wide variety of drugs has grown significantly on the shelves of regular pharmacies and in online pharmacies based in the United States, and among these generics there is a large share of drugs from the lowest price segment. What explains this shift in politics, which has long stubbornly defended the monopoly of Big Pharma and other American branded drug manufacturers? The fact is that generics, even if they are "enemy" (foreign drugs that compete with brand American ones), make a significant contribution to maintaining the normal operation of an already overloaded healthcare system, which, in addition to successive world crises, including the pandemic of COVID-19, still cannot recover from the not very best consequences of the introduction of Obamacare. Thanks to generics, the provision of the population with medicines is increased, and the budgetary funds of health care institutions are also saved. This explains the support for the generic drug approval policy in the United States.

Cost savings are paramount to all key pharmaceutical decisions in the United States. Between 2002 and 2012, the US healthcare system was able to save more than $ 1.2 trillion thanks to the widespread use of generics, according to one IMS Health study. In addition, the constant competition from generics and biosimilars encourages original drug manufacturers not to rest on their laurels, but to introduce innovations in the manufacturing process, invent new drugs, and free up resources that the healthcare system can reinvest in the development of new treatments for various diseases.

Generics in America: the Perspectives

The COVID-19 pandemic has put a huge strain on healthcare systems around the world, and the American one is no exception. In addition, the pandemic has triggered a significant drop in household income, contributing to the largest spike in generic drug use since 2008. This was made possible in part by efforts to implement the Drug Competition Action Plan of the FDA, which aims to increase the number of generics approved for use in the United States and remove barriers to their entry into the American pharmaceutical market, many of which are artificially created by large manufacturers of branded drugs.

Today, the American pharmaceutical market is moving towards an innovative development model. In the medium and long term, this should increase the share of all drugs produced in the country, both generics and innovative drugs.

Currently, generics are especially in demand for the treatment of patients with diabetes, Alzheimer's disease, heart disease, and erectile dysfunction. Also in the focus of attention of generic manufacturers are the drugs abacavir and lamivudine, which are used in combination with other drugs as part of the treatment of infection caused by the human immunodeficiency virus (HIV). The affordability of antiretroviral therapy to the general population is one of the key focuses of the American health care system.

The patent protection period for many branded drugs is coming to an end, so a new round of growth in the production and sales of generics in the United States can be expected in the next two to three years. The projected average annual growth rate of the US generics market will be about 6%. The United States generic market is projected to reach $237 billion by 2025.