Generic prices are prices charged for the purchase of generic medications, which tend to be less costly than branded versions. Pharmaceutical pricing is a complex topic, and in some regions it is also contentious as a result of initiatives to make prescription drugs more affordable for the general public. Patients may preferentially request generics to access the cheaper generic pricing, and this can be a consideration for doctors when they write prescriptions as well.
Brand-name drugs are more expensive for a variety of reasons. The first is the lack of competition. Drug manufacturers enjoy a patent on their medications for a set period of time after development, and during this period, no other company can produce the drug without obtaining a license first. The pharmaceutical company has total power over the price of the drug, and tends to set the price high to recoup development costs. The full process of research and development can take years and be very expensive, and the pharmaceutical company counts on this exclusive sales period to make up the money.
Once a drug goes off patent, any company can produce it, as long as its medications are pharmacologically equivalent to the brand name drug. This creates competition and leads to low generic prices. Drug companies that didn't invest in development do not need to charge high prices to pay for the process of creating the drug, and set their prices low to appeal to consumers. This can create a price war among other generic manufacturers, while the original producer still charges a high fee, although it may drop over time.
Consumers prefer generic prices and insurance companies may require the use of generic drugs, when available, unless a doctor can document a reason for prescribing the brand name drug. For example, a patient might have an allergy to a filler used in the generic drug, and must have the prescription version to avoid an allergic reaction. Pharmacies usually maintain a generic price list or may charge a flat fee for generic prescriptions, versus varying prices for brand-name drugs.
Worldwide, generic prices vary. In some nations they may be higher because of the higher standard of living. Groups working on health issues in developing nations lobby for low generic prices on critically necessary drugs like HIV and tuberculosis medications, to make these affordable for all patients. Drug companies may charge a special rate to charitable programs that provide health care services to disadvantaged communities.
