What is the difference between API and generic drugs?

Pharmaceutical equivalent to a brand-name product

A generic drug is a pharmaceutical drug that contains the same chemical substance as a drug that was originally protected by chemical patents. Generic drugs are allowed for sale after the patents on the original drugs expire. Because the active chemical substance is the same, the medical profile of generics is equivalent in performance compared to their performance at the time when they were patented drugs.[1][2] A generic drug has the same active pharmaceutical ingredient (API) as the original, but it may differ in some characteristics such as the manufacturing process, formulation, excipients, color, taste, and packaging.[2]

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Although they may not be associated with a particular company, generic drugs are usually subject to government regulations in the countries in which they are dispensed. They are labeled with the name of the manufacturer and a generic non-proprietary name such as the United States Adopted Name (USAN) or International Nonproprietary Name (INN) of the drug. A generic drug must contain the same active ingredients as the original brand-name formulation. The U.S. Food and Drug Administration (FDA) requires generics to be identical to or within an acceptable bioequivalent range of their brand-name counterparts, with respect to pharmacokinetic and pharmacodynamic properties.[3]

Biopharmaceuticals, such as monoclonal antibodies, differ biologically from small-molecule drugs. Biosimilars have active pharmaceutical ingredients that are almost identical to the original product and are typically regulated under an extended set of rules, but they are not the same as generic drugs as the active ingredients are not the same as those of their reference products.[4] In most cases, generic products become available after the patent protections afforded to the drug's original developer expire. Once generic drugs enter the market, competition often leads to substantially lower prices for both the original brand-name product and its generic equivalents. In most countries, patents give 20 years of protection. However, many countries and regions, such as the European Union and the United States,[5] may grant up to five years of additional protection ("patent term restoration") if manufacturers meet specific goals, such as conducting clinical trials for pediatric patients.[6]

Manufacturers, wholesalers, insurers, and drugstores can all increase prices at various stages of production and distribution.[7] In , according to an analysis by the Generic Pharmaceutical Association, generic drugs accounted for 88 percent of the 4.3 billion prescriptions filled in the United States.[8]:&#;2&#; "Branded generics" on the other hand are defined by the FDA and National Health Service as "products that are (a) either novel dosage forms of off-patent products produced by a manufacturer that is not the originator of the molecule, or (b) a molecule copy of an off-patent product with a trade name."[9] Since the company making branded generics can spend little on research and development, it is able to spend on marketing alone, thus earning higher profits and driving costs down.[10] For example, the largest revenues of Ranbaxy, now owned by Sun Pharma, came from branded generics.[11][12]

Nomenclature

[edit] See also: Drug nomenclature

Generic drug names are constructed using standardized affixes that distinguish drugs between and within classes and suggest their action.[citation needed]

Economics

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When a pharmaceutical company first markets a drug, it is usually under a patent that, until it expires, the company can use to exclude competitors by suing them for patent infringement.[13] Pharmaceutical companies that develop new drugs generally only invest in drug candidates with strong patent protection as a strategy to recoup their costs of drug development (including the costs of the drug candidates that fail) and to make a profit.[14] The average cost to a brand-name company of discovering, testing, and obtaining regulatory approval for a new drug, with a new chemical entity, was estimated to be as much as US$800 million in [15] and US$2.6 billion in .[16] Drug companies that bring new products have several product line extension strategies they use to extend their exclusivity, some of which are seen as gaming the system and labeled "evergreening" by critics, but at some point there is no patent protection available.[13] For as long as a drug patent lasts, a brand-name company enjoys a period of market exclusivity, or monopoly, in which the company is able to set the price of the drug at a level that maximizes profit. This profit often greatly exceeds the development and production costs of the drug, allowing the company to offset the cost of research and development of other drugs that are not profitable or do not pass clinical trials.[7] The impact of loss of patent exclusivity on pharmaceutical products varies significantly across different product classes (e.g., biologics vs. small molecules), largely due to regulatory, legal and manufacturing hurdles associated with such products. Indeed, the greater degree of 'brand-brand' competitive dynamics seen in the biologics and complex generics space allows manufacturers of originators to better protect market share following loss of patent exclusivity.[17]

Large pharmaceutical companies often spend millions protecting their patents from generic competition.[7] Apart from litigation, they may reformulate a drug or license a subsidiary (or another company) to sell generics under the original patent. Generics sold under license from the patent holder are known as authorized generics.[18] Generic drugs are usually sold for significantly lower prices than their branded equivalents and at lower profit margins.[19] One reason for this is that competition increases among producers when a drug is no longer protected by patents.[19] Generic companies incur fewer costs in creating generic drugs&#;only the cost of manufacturing, without the costs of drug discovery and drug development&#;and are therefore able to maintain profitability at a lower price.[19][20][21] The prices are often low enough for users in less-prosperous countries to afford them.[citation needed] Generic drug companies may also receive the benefit of the previous marketing efforts of the brand-name company, including advertising, presentations by drug representatives, and distribution of free samples. Many drugs introduced by generic manufacturers have already been on the market for a decade or more and may already be well known to patients and providers, although often under their branded name.[citation needed]

India is a leading country in the world's generic drugs market, exporting US$20.0 billion worth of drugs in the &#;20 (April&#;March) year.[22] India exports generic drugs to the United States and the European Union.[23] also the according to market research community the Global Generic Drugs Market was evaluated US$465.96 million in and is expected to rise with a CAGR of 5.5% from - during the forecast period.[24] In the United Kingdom, generic drug pricing is controlled by the government's reimbursement rate. The price paid by pharmacists and doctors is determined mainly by the number of license holders, the sales value of the original brand, and the ease of manufacture. A typical price decay graph will show a "scalloped" curve,[25] which usually starts at the brand-name price on the day of generic launch and then falls as competition intensifies. After some years, the graph typically flattens out at approximately 20% of the original brand price. In about 20% of cases, the price "bounces": Some license holders withdraw from the market when the selling price dips below their cost of goods, and the price then rises for a while until the license holders re-enter the market with new stock.[26][27] The NHS spent about £4.3 billion on generic medicines in &#;17.[28] In , 84 percent of prescriptions in the US were filled with generic drugs,[29] and in , the use of generic drugs in the United States led to US$254 billion in health care savings.[8]:&#;2&#;

In the mid-s the generics industry began transitioning to the end of an era of giant patent cliffs in the pharmaceutical industry; patented drugs with sales of around US$28 billion were set to come off patent in , but in only about US$10 billion in revenue was set to open for competition, and less the next year. Companies in the industry have responded with consolidation or turning to try to generate new drugs.[30] Most developed nations require generic drug manufacturers to prove that their formulations are bioequivalent to their brand-name counterparts.[31][32][33][34][35][36] Bioequivalence does not mean generic drugs must be exactly the same as the brand-name product ("pharmaceutical equivalent"). Chemical differences may exist; a different salt or ester may be used, for instance. Different inactive ingredients means that the generic may look different from the originator brand;[37] however, the therapeutic effect of the drug must be the same ("pharmaceutical alternative").[citation needed] Most small molecule drugs are accepted as bioequivalent if their pharmacokinetic parameters of area under the curve (AUC) and maximum concentration (Cmax) are within a 90% confidence interval of 80&#;125%; most approved generics in the US are well within this limit.[38] For more complex products&#;such as inhalers, patch delivery systems, liposomal preparations, or biosimilar drugs&#;demonstrating pharmacodynamic or clinical equivalence is more challenging.[39]

United States

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Enacted in , the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch&#;Waxman Act, standardized procedures for recognition of generic drugs. In , the FDA launched the Generic Initiative for Value and Efficiency (GIVE):[40] an effort to modernize and streamline the generic drug approval process, and to increase the number and variety of generic products available.[citation needed]

Before a company can market a generic drug, it needs to file an Abbreviated New Drug Application (ANDA) with the Food and Drug Administration, seeking to demonstrate therapeutic equivalence to a previously approved "reference-listed drug" and proving that it can manufacture the drug safely and consistently.[41] For an ANDA to be approved, the FDA requires that the 90% confidence interval of the geometric mean test/reference ratios for the total drug exposure (represented by the area under the curve or AUC) and the maximum plasma concentration (Cmax) should fall within limits of 80&#;125%.[42] (This range is part of a statistical calculation, and does not mean that generic drugs are allowed to differ from their brand-name counterparts by up to 25 percent.) The FDA evaluated 2,070 studies conducted between and that compared the absorption of brand-name and generic drugs into a person's body. The average difference in absorption between the generic and the brand-name drug was 3.5 percent, comparable to the difference between two batches of a brand-name drug.[43][44] Non-innovator versions of biologic drugs, or biosimilars, require clinical trials for immunogenicity in addition to tests establishing bioequivalency. These products cannot be entirely identical because of batch-to-batch variability and their biological nature, and they are subject to extra rules.[45]

When an application is approved, the FDA adds the generic drug to its Approved Drug Products with Therapeutic Equivalence Evaluations list and annotates the list to show the equivalence between the reference-listed drug and the generic. The FDA also recognizes drugs that use the same ingredients with different bioavailability and divides them into therapeutic equivalence groups.[41] For example, as of , diltiazem hydrochloride had four equivalence groups, all using the same active ingredient, but considered equivalent only within each group.[46]

In order to start selling a drug promptly after the patent on innovator drug expires, a generic company has to file its ANDA well before the patent expires. This puts the generic company at risk of being sued for patent infringement, since the act of filing the ANDA is considered "constructive infringement" of the patent.[41] In order to incentivize generic companies to take that risk the Hatch-Waxman act granted a 180-day administrative exclusivity period to generic drug manufacturers who are the first to file an ANDA.[47]

When faced with patent litigation from the drug innovator or patent holder, generic companies will often counter-sue, challenging the validity of the patent.[48][49][50][51][52] Like any litigation between private parties, the innovator and generic companies may choose to settle the litigation. Some of these settlement agreements have been struck down by courts when they took the form of reverse payment patent settlement agreements, in which the generic company basically accepts a payment to drop the litigation, delaying the introduction of the generic product and frustrating the purpose of the Hatch&#;Waxman Act.[53][54]

Innovator companies sometimes try to maintain some of the revenue from their drug after patents expire by allowing another company to sell an authorized generic; a FTC report found that consumers benefitted from lower costs when an authorized generic was introduced during the 180 day exclusivity period, as it created competition.[55][56] Innovator companies may also present arguments to the FDA that the ANDA should not be accepted by filing an FDA citizen petition. The right of individuals or organizations to petition the federal government is guaranteed by the First Amendment to the United States Constitution.[57] For this reason, the FDA has promulgated regulations that provide, among other things, that at any time, any "interested person" can request that the FDA "issue, amend, or revoke a regulation or order," and set forth a procedure for doing so.[58][59]

Acceptance

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Some generic drugs are viewed with suspicion by doctors. For example, warfarin (Coumadin) has a narrow therapeutic window and requires frequent blood tests to make sure patients do not have a subtherapeutic or a toxic level. A study performed in Ontario showed that replacing Coumadin with generic warfarin was safe,[60] but many physicians are not comfortable with their patients taking branded generic equivalents.[61] In some countries (for example, Australia) where a drug is prescribed under more than one brand name, doctors may choose not to allow pharmacists to substitute a brand different from the one prescribed unless the consumer requests it.[62]

Fraud

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A series of scandals around the approval of generic drugs in the late s shook public confidence in generic drugs; there were several instances in which companies obtained bioequivalence data fraudulently, by using the branded drug in their tests instead of their own product, and a congressional investigation found corruption at the FDA, where employees were accepting bribes to approve some generic companies' applications and delaying or denying others.[29][63][64][65]

In , North Carolina Public Radio's The People's Pharmacy began reporting on consumers' complaints that generic versions of bupropion (Wellbutrin) were yielding unexpected effects.[66] Subsequently, Impax Laboratories's 300 mg extended-release tablets, marketed by Teva Pharmaceutical Industries, were withdrawn from the US market after the FDA determined in that they were not bioequivalent.[67][68]

Problems with the quality of generic drugs &#; especially those produced outside the United States &#; are widespread as of .[69] The FDA does infrequent &#; less than annual &#; inspections of production sites outside the United States. The FDA normally gives advance notice of inspections, which can lead to cover-ups of problems before inspectors arrive; inspections performed with little or no advance notice have produced evidence of serious problems at a majority of generic drug manufacturing sites in India and China.[69]

Litigation

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Two women, each claiming to have suffered severe medical complications from a generic version of metoclopramide, lost their Supreme Court appeal on June 23, . In a 5&#;4 ruling in PLIVA, Inc. v. Mensing,[70][71] the court held that generic companies cannot be held liable for information, or the lack of information, on the originator's label.[72][73][74]

India

[edit] Main article: Pharmaceutical industry in India

The Indian government began encouraging more drug manufacturing by Indian companies in the early s, and with the Patents Act in .[75] The Patents Act removed composition patents for foods and drugs, and though it kept process patents, these were shortened to a period of five to seven years. The resulting lack of patent protection created a niche in both the Indian and global markets that Indian companies filled by reverse-engineering new processes for manufacturing low-cost drugs.[76] The code of ethics issued by the Medical Council of India in calls for physicians to prescribe drugs by their generic names only.[77] India is a leading country in the world's generic drugs market, with Sun Pharmaceuticals being the largest pharmaceutical company in India. Indian generics companies exported US$17.3 billion worth of drugs in the &#;18 (April&#;March) year. In &#;, bioequivalence studies were only required for generics of drugs that are less than four years old. Since , all generic drugs of certain classes, irrespective of age, require bioequivalence to be approved.[78]

China

[edit] Main article: Pharmaceutical industry in China

Generic drug production is a large part of the pharmaceutical industry in China. Western observers have said that China lacks administrative protection for patents.[79] However, entry to the World Trade Organization has brought a stronger patent system.[80] China remains the largest exporter of active pharmaceutical ingredients, accounting for 40% of the world market per a estimate.[81]

Bioequivalence studies are required for new generic drugs starting from , with older drugs planned as well. In addition, in vitro dissolution behavior is required to match.[82] Since , 44 classes of drugs are exempt from testing (requiring only a dissolution check), and 13 classes only require simplified testing.[83]

Industry

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As of , several major companies traditionally dominate the generic drugs market, including Viatris (merger of Mylan and Upjohn), Teva, Novartis' Sandoz, and Sun Pharma.[84] Prices in traditional generic drugs have declined and newer companies such as India-based Sun Pharma, Aurobindo Pharma, and Dr. Reddy's Laboratories, as well as Canada-based Apotex, have taken market share, which has led to a focus on biosimilars.

See also

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References

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Further reading

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Spanish Language version - Medicamentos Genéricos: Preguntas y Respuestas (PDF - 213 KB)

For more api medicineinformation, please contact us. We will provide professional answers.

• What are generic drugs?
• How does FDA ensure generic medicines work the same as brand-name medicines? 
• Why does a generic drug look different from the brand drug?
• Why do generic medicines often cost less than the brand?
• What standards must generic medicines meet to receive FDA approval?
• Is a generic of my brand-name medicine available?
• How does FDA monitor side effects or safety issues with generic medicines?
• Where can I find more information about generic medicines?

What are generic drugs?

A generic drug is a medication created to be the same as an already marketed brand-name drug in dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use. These similarities help to demonstrate bioequivalence, which means that a generic medicine works in the same way and provides the same clinical benefit as the brand-name medicine. In other words, you can take a generic medicine as an equal substitute for its brand-name counterpart.

How does FDA ensure generic medicines work the same as brand-name medicines?

Any generic medicine must perform the same in the body as the brand-name medicine. It must be the same as a brand-name medicine in dosage,  form and route of administration, safety, effectiveness, strength, and labeling (with certain limited exceptions).  It must also meet the same high standards of quality and manufacturing as the brand-name product, and it must be and quality, taken and used in the same way as well. This standard applies to all generic medicines.

Generic medicines use the same active ingredients as brand-name medicines and work the same way, so they have the same risks and benefits as the brand-name medicines. The FDA Generic Drugs Program conducts a rigorous review to ensure generic medicines meet these standards, in addition to conducting inspections of manufacturing plants and monitoring drug safety after the generic medicine has been approved and brought to market.

A generic drug may have certain minor differences from the brand-name product, such as different inactive ingredients. 

It is important to note that there will always be a slight, but not medically significant, level of expected variability&#;just as there is for one batch of brand-name medicine compared with the next batch of brand-name product. This variability can and does occur during manufacturing, for both brand-name and generic medicines. When a medicine, generic or brand-name, is mass produced, very small variations in purity, size, strength, and other parameters are permitted. FDA limits how much variability is acceptable.

For example, a very large research study1 comparing generics with brand-name medicines, found that there were very small differences (approximately 3.5%) in absorption into the body between generic and brand-name medicines. Some generics were absorbed slightly more, some slightly less. This amount of difference is expected and clinically acceptable, whether for one batch of brand-name medicine tested against another batch of the same brand, or for a generic tested against a brand-name medicine. 

Why does a generic drug look different from the brand drug?

Trademark laws in the United States do not allow a generic drug to look exactly like other drugs already on the market. Generic medicines and brand-name medicines share the same active ingredient, but other characteristics, such as colors and flavorings, that do not affect the performance, safety, or effectiveness of the generic medicine, may be different.

Why do generic medicines often cost less than the brand-name medicines?

Generic drugs are approved only after a rigorous review by FDA and after a set period of time that the brand product has been on the market exclusively. This is because new drugs, like other new products, are usually protected by patents that prohibit others from making and selling copies of the same drug.  

Generic drugs tend to cost less than their brand-name counterparts because generic drug applicants do not have to repeat animal and clinical (human) studies that were required of the brand-name medicines to demonstrate safety and effectiveness. This abbreviated pathway is why the application is called an &#;abbreviated new drug application.&#; 

The reduction in upfront research costs means that, although generic medicines have the same therapeutic effect as their branded counterparts, they are typically sold at substantial discounts, an estimated 80 to 85% less, compared with the price of the brand-name medicine. According to the IMS Health Institute, generic drugs saved the U.S. healthcare system nearly $2.2 trillion from to .

When multiple generic companies are approved to market a single product, more competition exists in the marketplace, which typically results in lower prices for patients.

Bringing more drug competition to the market and addressing the high cost of medicines is one of FDA&#;s top priorities. In , FDA announced the Drug Competition Action Plan (DCAP) to further encourage robust and timely market competition for generic drugs and help bring greater efficiency and transparency to the generic drug review process, without sacrificing the scientific rigor underlying our generic drug program.

What standards must generic medicines meet to receive FDA approval?

Drug companies must submit an abbreviated new drug application (ANDA) to FDA for approval to market a generic drug that is the same as (or bioequivalent to) the brand product. FDA reviews the application to ensure drug companies have demonstrated that the generic medicine can be substituted for the brand-name medicine that it copies.

An ANDA must show the generic medicine is equivalent to the brand in the following ways:

• The active ingredient is the same as that of the brand-name drug/innovator drug.
  • An active ingredient in a medicine is the component that makes it pharmaceutically active &#; effective against the illness or condition it is treating.
  • Generic drug companies must provide scientific evidence that shows that their active ingredient is the same as that of the brand-name medicine they copy, and FDA must review that evidence.
• The generic medicine is the same strength.
• The medicine is the same type of product (such as a tablet or an injectable).
• The medicine has the same route of administration (such as oral or topical).
• It has the same use indications.
• The inactive ingredients of the medicine are acceptable.
  • Some differences, which must be shown to have no effect on how the medicine functions, are allowed between the generic and the brand-name product.
  • Generic drug companies must submit evidence that all the ingredients used in their products are acceptable, and FDA must review that evidence.
• It lasts for at least the same amount of time.
  • Most medicines break down, or deteriorate, over time.
  • Generic drug companies must do months-long "stability tests" to show that their products last for at least the same amount of time as the brand-name product.
• It is manufactured under the same strict standards as the brand-name medicine.
  • It meets the same batch requirements for identity, strength, purity, and quality.
  • The manufacturer is capable of making the medicine correctly and consistently.
    • Generic drug manufacturers must explain how they intend to manufacture the medicine and must provide evidence that each step of the manufacturing process will produce the same result each time. FDA scientists review those procedures, and FDA inspectors go to the generic drug manufacturer's facility to verify that the manufacturer is capable of making the medicine consistently and to check that the information the manufacturer has submitted to FDA is accurate.
    • Often, different companies are involved (such as one company manufacturing the active ingredient and another company manufacturing the finished medicine). Generic drug manufacturers must produce batches of the medicines they want to market and provide information about the manufacturing of those batches for FDA to review.
• The container in which the medicine will be shipped and sold is appropriate.
• The label is the same as the brand-name medicine's label.
  • The drug information label for the generic medicine should be the same as the brand-name label. One exception is if the brand-name drug is approved for more than one use and that use is protected by patents or exclusivities. A generic medicine can omit the protected use from its labeling and only be approved for a use that is not protected by patents or exclusivities, so long as that removal does not take away information needed for safe use. Labels for generic medicines can also contain certain changes when the drug is manufactured by a different company, such as a different lot number or company name.
• Relevant patents or exclusivities are addressed.
  • As an incentive to develop new medicines, drug companies are awarded patents and exclusivities that may delay FDA approval of applications for generic medicines. FDA must comply with the delays in approval that the patents and exclusivities impose.

The ANDA process does not, however, require the drug applicant to repeat costly animal and clinical (human studies) on ingredients or dosage forms already approved for safety and effectiveness. This allows generic medicines to be brought to market more quickly and at lower cost, allowing for increased access to medications by the public.

In addition to asking your local pharmacist for assistance, there are three ways to find out if there is a generic of your brand-name medicine available:

• Use Drugs@FDA, a catalog of FDA-approved drug products, including their drug labeling.
  • First, search by brand name.
  • Second, select the brand name product and note which products are listed under the section labeled &#;Therapeutic Equivalents for ...&#;
  • Products that include an ANDA (not NDA) number next to the name are generic products.
• Use the online version of the Orange Book.  
  • First, search by proprietary or brand name. Note the active ingredient name.
  • Second, search again by the active ingredient name.
  • Scroll right to find the dosage form (for example: tablet) and strength.
  • Next, scroll right to the TE Code column. If the TE column contains a code beginning with &#;A,&#; FDA has approved generic equivalents.
  • Finally, look at the column &#;Appl No.&#; If the letter &#;A&#; appears before the number, that product is an FDA-approved generic for the brand-name drug.  
  • For very recent approvals, consult First Generic Drug Approvals.

If you are unable to locate a generic of your brand-name medicine, it may be that the brand-name medicine is still within the period of time when it has exclusive rights to the marketplace, which allows drug companies to recoup their costs for the initial research and marketing of the brand-name or innovator drug. It is only after both patent and other periods of exclusivity are resolved that FDA can approve a generic of the brand-name medicine.

How Does FDA monitor side effects or safety issues with generic medicines?

FDA takes several actions to ensure safety and quality before and after a new or generic medicine is approved. When a generic drug application is submitted, FDA conducts a thorough examination of the data submitted by the applicant and evaluates information obtained by FDA investigators while inspecting the related testing and manufacturing facilities to ensure that every generic drug is safe, effective, high quality, and substitutable to the brand name drug.

FDA staff continually monitors all approved drug products, including generics, to make certain the medicines at all levels of the supply chain, from active pharmaceutical ingredients (APIs) to products being sold to consumers, are safe, effective, and high quality.

FDA also monitors and investigates reports of negative patient side effects or other reactions. The investigations may lead to changes in how a product (brand-name and generic) is used or manufactured, and FDA will make recommendations to health care professionals and the public if the need arises.

MedWatch is the FDA&#;s medical product safety reporting program. Health professionals, patients and consumers can use MedWatch to voluntarily report a serious adverse event, product quality problem, product use/medication error, or therapeutic inequivalence/failure that is suspected to be associated with the use of an FDA-regulated drug, biologic, medical device, dietary supplement or cosmetic.

Additional Resource

• Postmarketing Surveillance of Generic Drugs
  Download a high-resolution, printable PDF of this infographic (PDF - 282 KB)

Where can I find more information about generic medicines?

Contact your doctor, pharmacist, or other health care provider for information on generic medicines. For more information, you can also:

• Visit the FDA Generic Drugs Program
• Call 1-888-INFO-FDA

1Davit et al. Comparing generic and innovator drugs: a review of 12 years of bioequivalence data from the United States Food and Drug Administration. Ann Pharmacother. ;43(10):-97.

2Association for Accessible Medicines. Generic Drug & Biosimilars Access & Savings in the U.S. Report. Available from: http://www.imshealth.com/en/thought-leadership/quintilesims-institute/reports

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