Generic drugs are required to meet the same standards as their Brand name counterparts. Generic drugs may differ from the Brand name version in shape, color, packaging and labeling. Generic drugs must have the equivalent active ingredient, strength, use and effect, ability to reach the blood stream with the same effectiveness and undergoes the same testing standards as Brand name medications. Generic medication may have different inactive ingredients, this would only affect the color, shape or tasteof the drug. Generic medications are bio-equivalent to Brand name medications, as they have comparable active ingredients. Drug manufacturing is a strictly regulated industry, therefore the Generic medication must provide the same therapeutic effects as the Brand name medication.
Effectively, Generic medication can be viewed as copies of the Brand name medication as they have the same dosage, intended use, effects, side effects, route of administration, risks, safety,and strength as the original drug.
Generic medication is cheaper than Brand name medication because the manufacturers have not had the expense of developing and marketing a new drug. When a new drug is brought to the market by a company, the company has already spent a considerable amount of money on research and development, marketing and promotion for that drug. The company that created that drug would also have a patent granted for that drug that allows them exclusive rights to sell the drug while the patent is in effect.
Once that patent is set to expire,other manufacturers can apply for permission to make and sell a generic version of the drug. These manufacturers do not have the startup costs associated for development of the drug, so these companies can make the drug and sell it cheaper than the original manufacturers. Additionally, when multiple companies begin making and selling a drug there is greater competition among them which also drives the pricedown further.