Why Generic Competition Doesn’t Reduce Branded ED Drug Prices
Generic drugs for conditions such as erectile dysfunction (ED) help to make treatment more affordable for millions of people. Many contend that the generic drug market will eventually lead to reduced prices for branded drugs. However, it seems that generic drugs do not actually drive down brand-name prices.
This article provides an overview of generic ED medications and the reasons behind the high price tag of many branded drugs.
Generic vs. Branded Drugs
Generic medications are produced to work in the same way as their brand-name counterparts. Generic drugs must prove to be just as effective as branded drugs. These drugs have the same active ingredient as the branded version and should not differ when it comes to:
- Route of administration (how it is taken)
- Dosage (how much is taken and when it is taken)
In short, generic drugs are safe, effective, and less expensive than branded drugs. However, generic medications are not available for every branded drug on the market and some people do not respond as well to generic medications as they do to the branded versions. Anyone wishing to switch from a branded medication to the generic version should consult with his or her medical provider.
It is no secret that prescription medications can be pricey, especially specialized treatments and prescription lifestyle medications. In 2017, branded drugs were priced an average of 18.6 times higher than their generic counterparts. Additional sources estimate that the average generic medication costs about 80 to 85 percent less than the branded price.
Generics not only save the average consumer money, but they may also reduce healthcare spending overall. Debra Whitman, Executive Director and Chief Public Policy Officer of AARP, commented within their annual price watch report, “Generics account for nearly 9 out of every 10 prescriptions filled in the U.S. but represent less than a quarter of the country’s drug spending.” An IMS Health Institute report estimated that generic drugs saved the U.S. healthcare system $1.67 trillion from 2007 to 2016.
Why the Difference?
- Drug patents. Drug patents allow a company to be the sole manufacturer of a drug while the patent remains in place. This prohibits other companies from making, selling, and marketing the drug.
- Rigorous clinical drug testing. Generic drug applicants do not have to go through the same animal and human clinical trials as the branded drug makers. This upfront reduction in expense allows companies to sell the generic for a much lower price.
- Market competition. Multiple drug companies are often granted the ability to market a single generic product. The more companies that offer the generic, the more market competition can potentially drive down generic prices.
The Future of Branded Drug Prices
Overall, drug-pricing trends in the United States show declines in generic drug prices, but do not show declines in branded drug prices. Drug prices continue to rise faster than the rate of inflation, with increases averaging 5 percent. Lawmakers continue to dispute the best way to curb branded drug prices and healthcare costs.