Generic Pharmaceuticals: Challenges and Opportunities
Jim Hill
USA

A generic drug is a compound or formulation which is produced and distributed without patent protection. Note, a drug company could have a patent on the formulation but not on the active ingredients, thus, it would be generic. In the United States (US), a generic drug must contain the same active ingredients as the original formulation. Plus, the US Food and Drug Administration (FDA) identifies and licenses as generic drugs those that are identical or within an acceptable bioequivalent range to the brand name counterpart with respect to pharmacokinetic and pharmacodynamic properties. The generic drug must act very similarly or the same as the brand name product. Thus, any generic considered by the FDA must be identical in dose, strength, route of administration, safety, efficacy, and intended use. Be aware that in the US off label use of drugs often occurs. For example, some anti-angiogenic drugs that are used in colon cancer have been used in ophthalmology for anti-angiogenesis.

The economic aspect of generic products is that once they become available, the market competition results in significantly lower prices for the generic compound as well as for the original brand name product. Thus, there is a savings for the consumer.

In general, US pharmaceuticals companies patent their drug long before any clinical trial is initiated. Thus, although the US patent is given for 20 years, the effective life of the drug patent tends to vary based on the completion of the clinical trials. The range can be as short as 7 years of exclusive availability of the brand name product up to about 12 years.

The pharmacological, therapeutic, medical, and legal aspects of generic drugs offer significant challenges and opportunities. Industry experts agree that both the brand name drug company (holding the patent) and the generic drug company have the potential to benefit due to the cost reductions. In some instances, there can be cooperation between the brand name company and the generic company. Also, in some select cases in the US, a generic drug developer can be given exclusive rights. This complex dynamic has both medical necessity and justification (legal) components. This can be a unique opportunity for a generic drug company.

The development of generic provides has significant opportunities as well as challenges. The large pharmaceutical companies producing brand names and other companies producing generic products often have complex research and/or business paradigms that appear to be contradictory. If there were regulatory mechanisms in place that would assist both types of enterprises, all the consumers purchasing drugs would benefit. Although regulations can pose barriers, one hopes that in the future these guidelines will be such that they will afford opportunities and rewards for both companies that develop brand names and have patents and companies that produce and market generic drugs.