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the difference between generic drugs and authorized generics

Source: Food and Drug Administration (FDA)

A Generic Drug is a copy of the original brand-name drug, that is, it has the same active ingredients, dosage form, strength, route of administration, and intended use as the brand drug. In other words, the generic drug must be therapeutically equivalent to the brand drug and be approved as an Abbreviated New Drug Application (ANDA) by the FDA.

An Authorized Generic is the brand company's own product repackaged and marketed as a generic drug either through a subsidiary or a third party. An Authorized Generic is a brand-name drug - already approved as a New Drug Application (NDA) by the FDA - and marketed as a generic product under a private label. The Authorized Generic is sold and distributed as a generic product by a subsidiary or by the private label distribution company. An Authorized Generic has the identical color, size, shape, flavor, dosage form, strength, route of administration, active ingredients, and inactive ingredients as the brand drug.

Authorized Generics provide consumers with brand quality at generic prices. Consumers have the same product experiences with Authorized Generics as they do with brand drugs because an Authorized Generic is exactly identical to the brand-name drug. The original maker of the brand drug gives permission to a subsidiary or a private label distribution company to sell its brand-name drug as a generic drug at a lower price.

In fact, both the brand drug and the Authorized Generic are produced on the same manufacturing line. One is packaged under the brand name while the Authorized Generic is packaged under private label and sold at the generic price.

An example of authorized generics is Azithromycin Pak sold by the Greenstone company. The Z-pak drug is a brand-name drug created by Pfizer company and approved by the FDA. As the patent for Z-pak was about to expire, Pfizer company let the Greenstone company sell Z-pak using the generic name Azithromycin Pak. In other words, Azithromycin Pak from Greenstone is exactly the same drug as Z-pak from Pfizer. Also, Azithromycin Pak from Greenstone has never been approved by the FDA because it is exactly the same as Z-pak from Pfizer. As a matter of fact, the Greenstone company is a wholly owned subsidiary of Pfizer company.

On the other hand, Azithromycin Pak from Teva company has been approved by the FDA as a generic drug. Azithromycin Pak from Teva company is not exactly the same as Z-pak from Pfizer company. Azithromycin Pak from Teva is therapeutically equivalent to Z-pak from Pfizer, that is, Azithromycin Pak from Teva has the same active ingredient, dosage form, strength, route of administration, and intended use as Z-pak from Pfizer. But, Azithromycin Pak from Teva has different color, shape, and size than Z-pak from Pfizer. In the meantime, Azithromycin Pak from Greenstone is exactly the same as Z-pak from Pfizer. In turn, Azithromycin Pak from Greenstone is called an authorized generic while Azithromycin Pak from Teva is called a generic drug.

When a patent for a brand-name drug expires, other pharmaceutical companies will be allowed to make and sell generic equivalents to the brand-name drug. In other words, when a patent for a brand-name drug expires, the pharmaceutical maker of the brand drug will lose market share because other pharmaceutical companies will be allowed to make and sell generic equivalents to the brand-name drug. But, in order to offset the loss, the pharmaceutical maker of the brand-name drug, during the patent expiration, may manufacture and license the brand drug to a private label distribution company and, in turn, the distribution company will market and sell the brand-name drug as a generic drug at a lower price. This way, the pharmaceutical maker of the brand drug will jump-start the generic competition as the new generic equivalents to the brand drug are introduced and sold in the marketplace by other pharmaceutical companies.





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2006