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Why Generic Drugs Cost Less

There are many reasons for the lower cost of generic drugs including:

* Generic drugs are frequently manufactured by smaller, independent pharmaceutical houses, who have not made the investment in research, development and marketing that the brand name manufacturer has made. Mostly, however, generics are manufactured by big, pharmaceutical firms—the same companies who produce brand name drugs.

* Medications sold in generic form are often well-established, frequently used drugs. It is estimated that by 1991, 81 of the top 100 selling brand name drugs will have generic competitors. today, almost one-third of all prescription drugs sold in tablet or capsule forms have generic equivalents.

* Generic drugs are usually sold in packaging that is less flashy and the drugs are rarely the focus of intense marketing and advertising campaigns, which add to the costs of making and selling a drug.

A generic drug has the same potency and chemical makeup as that of a commercial brand, and usually costs far less than the commercial brand. Unlike Generic Drugs, a large part of the costs incurred by original manufacturers of brand name drugs are for research and development and advertising. The expense of obtaining FDA approval alone in the U.S. is enormous. Manufacturers of Generic Drugs do not have to absorb or recover these costs. Consequently, significant cost savings can be passed along to you.

It is cheaper to make and sell generic drugs, so these savings are reflected in a lower price. Unlike the manufacturers of brand-name products, the makers of generic drugs don't incur the costs of research and development, marketing, and advertising. Since drug manufacturers have begun advertising directly to consumers, this has become a huge cost of doing business that is passed along to the consumer in the form of higher priced brand-name drugs. As for quality, the U.S. Food and Drug Administration (FDA) ensures that generic drugs are equivalent to brand-name drugs. By "equivalent," the FDA means that generics must contain the same active ingredients that work the same way in the body to deliver their medicinal effects.

One always wonders why generic drugs cost so less. The huge price difference sometimes makes a potential buyer think that the generic drugs are some fake or counterfeit products. But this is not the right reason. Unlike Generic Drugs, a large part of the costs incurred by original manufacturers of brand name drugs are for research and development and advertising. Manufacturers of Generic Drugs do not have to absorb or recover these costs. Consequently, significant cost savings can be passed along to you.

This is a fact that generic drugs always cost less. This is largely due to open competition in the market that helps drive prices down. When more companies make the drug, the price usually drops.

Certain people have notion that Why should they care what a drug costs as they have already insurance coverage for that. Ultimately, everyone pays for increasing drug costs in the form of increasing copays or premiums. The choices you make today will impact your premiums in the future.

Consult your pharmacist or doctor if your prescription can be substituted by generic equivalents. By requesting a generic drug, you may save money without sacrificing the quality of the drug you receive. Asking for the generic version when you get your prescription filled may save you money directly. Some generic drugs may have a lower copay or co-insurance cost than brand-name drugs