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posted by janrinok on Tuesday August 23 2016, @10:43PM   Printer-friendly
from the it's-business dept.

It has the same active ingredient, so it should work the same, but if someone says 'I want Cheerios, not Walmart-os', then why should they not get what they're paying for? (David Maris, pharmaceuticals analyst at Wells Fargo, as quoted in Staying Power, David Crow, Financial Times [Log in required], Aug 22.

Discovering a drug and bringing it to market can take more than 10 years and costs on average $2.6bn per medicine. Typically around five to seven years after, the exclusive rights on the discovery expire, and generic copycat versions quickly flood the market. Prices are slashed to super-cheap, and then for all time and eternity, society benefits greatly. Or, in the words of Pfizer's CEO Ian Read during an investor call: "The price of medicines drop significantly once the patent expires... Today, about nine out of ten prescriptions in the US offer generic drugs, which lead to significantly reduced costs in the healthcare system."

A recent Financial Times analysis doesn't completely agree though. Prices of branded medicines aren't slashed once the patent expires. They actually often sharply increase.

Before companies get to that phase however, a whole slew of other tactics have been used to maintain exclusivity. Many make small changes to a drug, then renew the patent. This is known as evergreening. Others "pay for delay" -- offering financial incentives to the generics producers to bring their alternatives to market more slowly. And once the generics get to market, pharma companies change tactics by attempting to stop patients, doctors and pharmacists from switching.

The end result is price differences between generics and brand medicines which are somewhat strange for a free market: Wellbutrin (bupropion, 150 mg) [Valeant]: $36 per pill versus $0.46 for the generic [bupropion]; Lipitor (atorvastatin 20mg) [Pfizer] 10.49 versus 0.13, Abmien (zolpidem 5mg) [Sanofi] 15.52 versus 0.02, Prozac (fluoxetine 20mg) [Eli Lilly] 11.39 versus 0.03, Xanax (alprazolam 1mg) [Pfizer] 8.14 versus 0.05 and Sarafem (fluoxetine 20mg) [Allergan] $15.98 versus $0.03 per pill.

There must be lot of people who prefer Cheerios over Walmart-os.


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  • (Score: 5, Insightful) by frojack on Wednesday August 24 2016, @04:44AM

    by frojack (1554) on Wednesday August 24 2016, @04:44AM (#392460) Journal

    Consider a solid pill consisting of a drug powder mixed with something that is effectively glue. The glue varies.Consider a solid pill consisting of a drug powder mixed with something that is effectively glue. The glue varies.

    The generics are usually using the same glue. There's a reason they are listed as inert ingredients. Its because they are inert.
    The glue is the cheapest part. Its not patented. When the patent on the medication expires there is no reason to change the formula at all.

    Most people taking the drugs listed in the story have generics prescribed for them by their doctors. Not the original.
    I had this conversation with my cardiologist last year. Doctors prescribing these days START with generics. They know that's where you will wnd up anyway, and the differences in the effectiveness is immeasurably small.

    A drug on the market long enough for generics to appear is WELL understood. You might have a discussion about the effects of inert ingredients when a drug is NEW, but by the time the generics arrive that conversation is long over.

    --
    No, you are mistaken. I've always had this sig.
    Starting Score:    1  point
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       Insightful=2, Interesting=1, Informative=1, Total=4
    Extra 'Insightful' Modifier   0  
    Karma-Bonus Modifier   +1  

    Total Score:   5