Observations Yankee Doodling

What’s happening to cheap generic drugs?

BMJ 2015; 351 doi: https://doi.org/10.1136/bmj.h5329 (Published 05 October 2015) Cite this as: BMJ 2015;351:h5329
  1. Douglas Kamerow, senior scholar, Robert Graham Center for policy studies in primary care, professor of family medicine at Georgetown University, and associate editor, The BMJ
  1. dkamerow{at}aafp.org

Clever business deals lead to big profits on older generic drugs

When I was in medical school in the 1970s I learned all I thought I needed to know about generic drugs from the esteemed (and wonderfully named) pharmacologist Louis Lasagna.1 He taught us not to worry too much about bioequivalence and save our patients some money by prescribing generics most of the time. Exceptions were rare, such as digoxin, where bioavailability variations could actually be clinically important. Good advice.

Patients could save money on generics because drug pricing used to follow a fairly predictable path. Drugs were expensive when first introduced and under patent. They became less expensive once the patent expired and generic versions were introduced. When there were more generic versions and a little time had passed, drugs often became very inexpensive, with the price drifting down as more and more generics (and new patented competitors) hit the market.

The word “market” should be underscored here, because drug prices (as opposed to most of the rest of healthcare costs) usually followed the laws of supply and demand. More versions of the …

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