Understanding Patent Exclusivity In Brand Name Drugs


Generic drugs have saved countless Americans a significant amount of money throughout the years. While generics have provided respite for many Americans, the question still remains: what creates such a price disparity between these generics and their brand name counterparts?

The accompanying resource attempts to provide some insight regarding that question. Of the information you’ll find, perhaps the most influential to this price disparity is the patent process. With how extended, difficult and expensive the process is, very few patents proposals are actually successful. A majority of the time,, drug companies spend billions researching new drugs to develop and rarely ever will these drugs see the shelves of a pharmacy. Which is why patent protection is so important to these companies. The drugs that are successfully developed are priced so high in an attempt to net back what was invested in developing them. Of course, without these drugs millions of Americans would be left in much worse health but pricing them in such a way that makes the average American struggle is not right.

Which is what the United States Government would come to realize as well. This is why, in 1984, they made way for the Hatch-Waxman Act. With the passing of this act, generic drugs were allowed to compete with their brand name counterparts after a certain duration. This was accomplished through ridding the generics of the requirement that branded drugs had to pass in order to be sold. Preclinical and clinical trials that were required for the brand name drugs were no longer required for the generics. Meaning the generics were able to enter the market much faster at a much lower cost than brand name drugs.

Knowing how often these generics are produced, it’s imperative to understand the differences between them. There are two major groups of generic drugs: generics and authorized generics.

Beginning with the latter, an authorized generic is a drug that is manufactured by the same company that manufactures the branded alternative. These companies then market the generic themselves. In some instances, the original manufacturer may allow other organizations to produce the generic for them, though.

The former, a non-authorized generic, is a drug manufactured by a company other than the original manufacturer of the branded drug. The major difference between the two is the quality control and availability. Authorized generics have been known to have a higher standard of quality control and much wider availability than non-authorized generics.

While generics have saved many Americans countless dollars, some newly developed branded drugs will be without a generic for some time. As patents are awarded for 20 years, with some drug companies even finding ways to extend this patent protection, exclusivity limits any sort of generic manufacturing. Luckily, United States’ law allows for competitors to challenge these patents. A successful challenge of these patents allows for competitors to bring their generics into the market much faster than consumers originally anticipate.

If you’re interested in learning more about the patent process and the differences between branded and generic drugs, be sure to check out the infographic coupled alongside this post. Courtesy of Rubin Anders