Why is there a price difference between generic and branded medications?
Generics are less expensive because of the patent system. When new drugs are first introduced, they are patent-protected by certain governments for specific periods of time. During that time, other companies within those governments can’t sell the drug. This allows the company that developed the drug to market it exclusively and secure a return on the investment which was spent on developing the original drug. Once the patent expires, drug companies can apply to the Food and Drug Administration to sell generic versions of the drug. And because these generic manufacturers dont have the same investment costs, they can often sell the drug for 50 percent to 80 percent less than the cost of the brand name.
