Where Do Generic Drugs Come From? Medicines Have a Long Lifecycle from Research to Brand Name Drug to Generic Form. Over time, Innovation Leads to Increased Competition On Price and Clinical Effects.
Generic drugs offer a good, low-cost option to patients. But did you know that they are also part of a system that helps offer affordable options to patients but makes future innovation possible?
In the U.S. we have a unique balance. Innovator medicines reach patients and, in the short term, companies are able to recoup at least some of their investment in R&D. After patent protection expires, other companies are allowed to sell generic copies of the innovative drug. These generic medicines, which are often adopted rapidly, can be offered at low cost because the generic companies can base their approval on the extensive research already conducted to develop the brand name medicine.
But we would not have generics if innovator companies did not commit the time, resources, and investments to the research and development of new, innovative medicines. (And by the way, only 2 of every 10 brand name medicines earn sufficient revenues to recoup average R&D costs.)