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BlogNewsEverything you need to know about brand name drugs and generic drugs

Everything you need to know about brand name drugs and generic drugs

Tuesday, September 13, 2016

First of all, what is a generic drug?

When pharmaceutical companies develop new drugs, they apply for a patent from the CIPO, the Canadian Intellectual Property Office. The patent gives the company the exclusive right to sell its drugs, without any competition. Patents in most countries last for 20 years from the time they are filed; patents allow pharmaceutical companies to recover their investments and generate profits on their developments.

Companies submit their trademark or manufacturer’s mark to the national trademark offices in each of the countries where their products are sold. If no other similar trademark is found, or if no company opposes the proposed trademark, the company submits the proposed trademark, which then becomes company’s property. This is usually marked with a ® following the trade name.

What is a generic drug?

Once the patent expires after 20 years, other pharmaceutical companies are free to manufacture and sell the original brand name drug as a generic drug. The generic drug must contain the same medicinal ingredients as the brand name drug. Both must meet the same strict governmental standards. In Canada, drugs are only approved and sold after a lengthy government review process.

So, what is the link between generic drugs and their brand-name equivalents?

Simply put, generic drugs are copies of the brand name drugs whose patents have expired. Since the initial research process takes less time, generic drugs are almost always less expensive than their brand-name equivalents.

What is the main different between a brand-name drug and a generic drug?

The cost! Generic drugs cost on overage 40 to 50% less than brand name drugs. Competition pushes the price of generic drugs down, compared to brand-name drug prices. The quality, integrity, effectiveness and dosage are identical.

What is the difference between a patent and a trademark?

A trademark is usually taken out on a product name, and it lasts indefinitely. A few examples: Kleenex,® Scotch Tape® and Tylenol.® Corporations can lose their trademarks if they don’t protect them and if they become part of the public domain. Aspirin is not a trademark in the United States because it has become the common name for acetylsalicylic acid (ASA), meaning that any company can use the name aspirin. The terms trade name, brand name or trademark are used interchangeably. The trademark of a particular drug can vary from one country to the next.

A patent lasts for 20 years as of the date it was filed, and they only apply to new discoveries or inventions.

Do all brand-name drugs have a generic version?

No, a generic version of a brand-name drug can only be sold once the patent has expired. Only 25 of the 100 most widely-prescribed patented drugs in Canada have generic versions.

Do generic drugs have the same appearance as their brand-name equivalents?

Not necessarily. On rare occasions, the generic and its brand-name equivalent may come in different forms, colours or even formats. Their effect, however, is exactly the same.

Do over-the-counter drugs have generic equivalents?

Yes, most of the patents on over-the-counter drugs have expired. And this is precisely why they have generic equivalents. These drugs are usually sold in pharmacies as “house” brands

Are generic drugs like no-name brands for coffee and soft drinks?

Not at all, for one very specific reason. The no-name brands of many consumer goods do not have to meet the same government standards. The only have to taste the same (or better) than the original product, and their manufacturers only have to entice people to buy them. Brand X cola may taste the same as Coke® or Pepsi®, or it may not taste as good.

For pharmaceutical products, all drugs, whether brand-name or generic, must comply with the same strict standards with regard to ingredients, processes and manufacturing facilities, and all aspects of the drugs must be approved by the government.

Are generic drugs widely used in Canada?

Yes, of course. In Canada, roughly 40% of all prescriptions are filled with generic drugs.

What about the ingredients in a generic drug? Do some products taste differently?

The active ingredients in a brand-name drug or generic drug must meet the same standards set by the federal government’s Health Protection Branch. That said, a pharmaceutical product contains other non-medicinal ingredients that give drugs their shape, taste and colour. The non-medicinal ingredients can vary from one product to another, but most drug manufacturers, brand-name or generic, select these non-medicinal ingredients from a very limited array of government- approved products.

Can a drug be at once a brand-name drug and generic?

It’s possible, yes. Once the patent for a given drug expires, the manufacturer can choose to sell it under a different corporate name, while continuing to sell the brand-name product at a higher price.

If employees are covered by a drug insurance plan, can they receive a brand-name drug or a generic equivalent interchangeably?

Filling a prescription with a generic drug is simply a question of economics, where everyone benefits.

Why should an employee support a drug plan that is based on using a low-cost replacement if the generic drug isn’t mandatory?

  • The money saved on premiums can be used to provide more comprehensive benefits to employees.
  • Generic drugs keep premiums low or steady.
  • A drug plan that is based on using generic equivalents protects the viability and the longevity of all benefits offered to employees.
  • Thanks to generic equivalents, each dollar spent on healthcare can be used more efficiently.
  • It’s a win-win solution for employees and employers alike. Employees get the medications they need and employers save money.
  • Generic drugs have the same integrity and effectiveness as their more expensive brand-name counterparts. It’s a sensible way to purchase drugs.
Source: Lesgéné

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