Why are generic drugs cheaper than the brand name ones?
Most new drugs, when they are first introduced are patent-protected by the government for 17 years. Other companies cannot sell that drug during that time. This allows the company that developed the drug to sell it exclusively and make back the research money that was spent to develop it. When the patent runs out, drug companies can apply to the Food and Drug Administration to sell generic versions of the drug. And because they don’t need to worry about investment costs, the competing companies can sell their products at a much lower price.
Most new drugs, when they are first introduced are patent-protected by the government for 17 years. Other companies cannot sell that drug during that time. This allows the company that developed the drug to sell it exclusively and make back the research money that was spent to develop it. When the patent runs out, drug companies can apply to the Food and Drug Administration to sell generic versions of the drug. And because they don’t need to worry about investment costs, the competing companies can sell their products at a much lower price.
