In these times of economic hardships, consumers are looking to save money in every possible area of their lives. And for those of us carrying brown-bagged lunches on our bicycle ride to work, we’ve probably begun to sever the tie with our name-brand addiction.
Whether we’re breaking the hold of Lucky Charms by purchasing Marshmallow Mateys, or trading in our Diesel jeans for Old Navy blues, more and more people across the country seem to be reigning in their wallets, and becoming far less meticulous with their purchases.
It comes as no real surprise then, to learn that according to the Food and Drug Administration, more than half of the prescriptions filled in the United States are done so with generic medications.
It is estimated by the Consumer Union that an average family of four can save well over $600 a year by switching to generic medications.
So why aren’t more people making the switch? According to Vinay Sharma, my family doctor, and a prominent member of the pulmonary department at Jennersville hospital in Willow Grove, Pennsylvania, “many people are weary that the substantial difference in price forebodes a substantial difference in quality.”
They don’t realize that the FDA maintains the same requirements for generic drugs as they do brand names.
In reality, the price variation between generic and name-brand drugs is due to cheaper manufacturing costs.
When a new drug is brought onto the market, research and marketing expenses are factored into its prescription cost. Once that drug is approved by the FDA, the company is granted a patent for a limited number of years. This patent dictates that only that company, such as Prozac, can sell that particular drug.
Once a patent ends, a manufacturer applies to the FDA to receive permission to create a generic copy of the pill. The copy is tested to ensure that it meets the exact same requirements, and then can be sold for much cheaper because there were no initial start-up costs.
In short, Prozac charges more money to recuperate the expenses spent on research and marketing, while its generic counterpart, fluoxetine, lacking initial start-up expenses, can charge less for the same product.
“Taking into consideration that nearly 50 million people are currently without health insurance in the United States, the reduced-cost of generic prescriptions enables more people to be and get healthy,” Sharma said.
“Many health insurance companies will also completely cover the cost of generic prescriptions, and that will save even more money.”
While many name-brand drugs have a generic substitute, it is important to discuss a possible switch with your doctor before making any decisions.