For this reason, pharmaceutical companies spend significant sums on advertising their drugs. According to Kantor Media, pharmaceutical manufacturers spent $4.5 billion on direct-to-consumer advertising in 2015. The aim was to attract as many consumers as possible before their patent expired. When this happens, the medicine would have been patented. Once a brand-name drug comes out of the patent from a single source, one of two different scenarios can occur: the pharmaceutical company holding the drug patent has spent money on research and development and has to spend even more money on marketing. Scenario One: In some cases, the FDA grants a sole proprietorship the exclusive right to manufacture, distribute, market, and sell a generic version of a drug. This is called a one-stop generic, where the manufacturer has the exclusive right to manufacture the generic version of this drug for six months to a year. The price of the drug will be lower than the price of the brand name drug. But since there is only one other company that sells the drug, it won`t be much cheaper than its branded equivalent.
Although generics are equivalent to brand-name drugs in terms of efficacy, safety, use and pharmacodynamics, their prices can vary greatly depending on the number of manufacturers who manufacture them. A drug approved for sale by the FDA is known as a single-source brand name drug. Only the company that manufactured this drug holds the patent and then has the exclusive right to sell it to consumers. The manufacturer can and will probably charge a premium, so the drug would be more expensive at that time than in the future. A generic version of a drug must contain the same active ingredients as the original brand name drug under the law. This is called “therapeutic equivalence.” The brand name drug that came out of the patent is now known as the referenced drug, or RLD. Let`s start with the manufacture of drugs. The Federal Drug Administration (FDA) must legally approve all drugs prescribed and sold in the United States. Second scenario: Several pharmaceutical companies are allowed to design their own versions of the brand name drug.
At this point, the drug is known as a generic with several sources, since a consumer can get the drug from one of the many manufacturers. Since there are several competing brands with essentially the same product on the market, competition lowers the price. If a pharmaceutical company wants to sell a drug, it must be approved after a long process of clinical trials, trials and research. If the FDA`s team of doctors, statisticians, chemists, pharmacologists, and scientists reviews the data and determines that “the benefits of the drug outweigh its risks,” the drug will be approved for sale. The average patent for a drug lasts about 20 years and manufacturers can make incredible profits with a best-selling drug while it is still patented. .
