"Most people believe that if something costs more it has to be better quality. In the case of generic drugs, this is not true."

Gary Buchlcr, Director of FDA's Office of Generic Drugs

Despite the strict standards imposed by the FDA for approval of generic drugs, and their enforcement of these standards, anumber of misconceptions about generic drugs persist (See "Myths and Facts about Gentries'" to the right).

New drugs, like other new products, are developed under patent protection. The patent protects the investment in the drug's development by giving the company the sole right to sell the drug while the patent is in effect. When patents or other periods of exclusivity on brand-name drugs are near expiration, manufacturers can apply to the FDA to sell generic versions.

"Much of FDA's review of generic drugs and brand name drugs is the same," Buehlcr explains (See "Same FDA Requirements for Brand-Name and Generic Drugs" to the right). There are eight major parts to the FDA's review of a firm's application to sell a generic drug:

  1. There must be an FDA-approved brand-name drug that is the reference for the proposed generic. The generic must have the same active ingredient or ingredients and the same labeled strength as this reference product. It must have the same dosage form, tablets, patches and liquids are examples of dosage forms. It must be administered the same way, for example, swallowed as a pill or given is an injection.
  2. The manufacturer must show the generic drug is "bioequivalent" to the brand-name drug (See "What Is Bioequivalence?" to the right).
  3. The generic drug's labeling must be essentially the same as that of the approved drug.
  4. The firm must fully document the generic drug's chemistry, manufacturing steps, and quality control measures. Each step of the process must be detailed for FDA review.
  5. The firm must assure the FDA that the raw materials and the finished product meet USP specifications, if these have been set. The USP, or U.S. Pharmacopoeia, is the nonprofit, scientific body chartered by Congress to set standards for drug purity in this country.
  6. The firm must show that its generic drug maintains stability as labeled before it can be sold. Once on the market, the firm must continue to monitor the drug's stability. The firm must show that the container and its closure system won't interact with the drug. Firms making sterile drugs must submit sterility assurance data showing microbiologic integrity of these products.
  7. The firm must provide a full description of the facilities it uses to manufacture, process, test, package, label and control the drug. It must certify that it complies with federal regulations about current good manufacturing practices and undergo FDA inspection of the manufacturing facility to assure compliance.
  8. Before FDA approves a generic drug, it usually conducts an inspection at the proposed manufacturing site to make sure the firm is capable of meeting its application commitments and to ensure the firm can manufacture the product consistently.

"Generic competition helps keep the cost of drugs down," Buehlcr says. "It also encourages the research based drug companies to keep finding newer and better medicines that have patent protection."

When retired federal auditor Stuart Addison went to the pharmacy, he had the pharmacist fill his prescriptions with generic drugs. "My motivation is to keep die prices down," Addison said, noting that his insurance plan helped pay for his prescriptions. "My pocketbook isn't directly affected; but, in the long run, I'm helping to keep insurance premiums down." Generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies (according to the USA Congressional Budget Office). Even more billions are saved when hospitals use generics.

"FDA-approved generic drugs are bioequivalent and therapeutically equivalent to their brand-name counterparts," says Buehler. "People can use them with total confidence."

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