Hello and welcome back! In this issue of Ron’s Clinical Corner, we will be discussing the differences between generic and authorized generic drugs.
Are generic drugs and authorized generic drugs one in the same? The answer is no. A generic drug is a copy of a brand name drug that has been developed by a competitor of the company who makes the brand name drug. Generic drugs have the same active ingredient as a brand name version, but can differ with regards to inactive ingredients.
An authorized generic is a brand manufacturer’s own product that has been repackaged and marketed as a generic drug rather than under the brand name label. Authorized generics can be marketed by the brand name company or through a subsidiary or third-party vendor. Normally, a company that wants to market a generic must get an Abbreviated New Drug Application (ANDA) from the FDA, but in this case, the brand manufacturer can use their New Drug Application (NDA) that covers the brand for approval. Brand companies can launch an authorized generic at any time, but typically do so near the end of the brand name’s patent exclusivity.
While authorized generics are intended to provide consumers the brand name at a generic price, the savings are usually minimal, often 10-15% less than the brand. In addition, organizations such as First Data Bank and Medi-Span, which code and classify medications, may still consider these as brands, not generics. As most Pharmacy Benefit Managers use either First Data Bank or Medi-Span drug information, this coding will be reflected in the claims system for plan benefit or copay determinations. In cases like these, it is usually not until true generic competition becomes available when changes to plan benefits will occur. Furthermore, significant reductions in cost between generics and brands typically do not occur until there are multiple generic products in the marketplace.
Thanks for stopping in, see you next month at the Corner.
