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Branded or Generic Drugs, Can You Tell the Difference?

Posted by on June 18, 2015 at 8:07 AM

Drugs, what would we do without them? From pain relief and hay fever to life threatening illnesses, all in some form have associated antidotes to lighten the burden on our bodies. Pharmaceutical companies across the planet invest trillions of dollars every year into developing and testing new remedies to solve our human illnesses. When one of these companies develops a new drug, lets say Glaxo-Smith Kline (GSK) for example, they can file a patent on the formula which gives the company 20 years protection to produce the drug without competition.

Branded or Generic Drugs, Can You Tell the Difference?

After this 20-year period other companies can begin developing the drug under their own brand and generally for a much lower price, referred to as generic drugs. Normally when buying different brands of food or electronics for example you expect different levels of quality. A typical example could be that you expect a more premium product when buying from Apple compared to purchasing from an unknown Chinese manufacturer. But, how does the drug market differ? Do you know the similarities that the drug market shares with other retail markets? In  this post I explore the everyday, over the counter drugs so keep reading to find out if your suspicions are correct or not.

The Recipe

Branded or Generic Drugs, Can You Tell the Difference?Once the 20-year patent period ends and the other companies wish to make the drug, paracetemol for example, then they must include all the same active ingredients. Certain inactive ingredients may differ slightly from company to company, such as different binding ingredients or sweeteners being used. However, besides this the drug is exactly the same and has to be so if it is to be marketed as said drug.

If you are still doubtful then know this; no drug can go on sale until it has passed rigorous standards, safety and effectiveness testing from the Therapeutic Goods Administration (TGA). Although different brands might sell different sizes or flavours of a drug, its main active ingredients must be the same.

 

Cost

Branded or Generic Drugs, Can You Tell the Difference?Generic drugs are noticeably lower in price compared to their branded counterparts. The inventor company is granted a 20-year patent period to allow them to recuperate money invested into the research and development of their drug. Most pharmaceutical companies will reduce their prices after their grace period to become more competitive, but many still maintain a premium over the market average because they know customers will pay the premium for the branded item.

If you are part of Medicare then the price you pay for prescription drugs will be partly subsidised by the government and wont have so much of an affect on your wallet. Yet, the ingredients of over the counter drugs such as Ibuprofen, for example, differ so insignificantly from each other that any price paid over the cheapest option is purely to line company pockets. Oh, and you get a prettier looking package of course.

 

Shopping Basket Example

Below I have created two example shopping baskets to represent how much you would spend if you bought generic drugs compared to their branded alternatives at Coles supermarket.

 

Drug Type

Branded (Originator)

Un-Branded (Generic)

Parecetemol (20 pk)

$3.08

$0.70c

Ibuprofen (24 pk)

$6.49

$1.80

Hey Fever Medicine

$7.69 (5pk)

$7.69 (10pk)

Throat Lozenges (36pk)

$17.59

$10.99

Magnesium tablets (200pk)

$23.10 (60pk)

$16.00

Indigestion tablets

$8.80 (20pk)

$6.38 (40pk)

TOTAL

$66.75

$43.56

 

Branded or Generic Drugs, Can You Tell the Difference?Overall, besides you spending less on more generic drugs you also receive far better value for money. Looking at the hay fever medicine generic pack, you’ll see that it provides 5 more tablets for the same price. The magnesium tablets generic brand gives you 140 more tablets for $7.10 less than the branded product. Finally, spend $2.42 less on indigestion tablets and you will receive double the amount of tablets, 20 more in fact.

Ultimately the additional $23.19 you would spend on branded drugs is simply to pay for drug companies marketing budgets and to line their pockets. The difference between the effectiveness of the drugs is negligible. So, what will you decide to do when you next visit the drug store or supermarket?

 


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