The University Record, October 22, 2001

Generic vs. name brand medications

By Colleen Newvine
News and Information Services

Kirking (Photo by Marcia Ledford

Debate over substituting one drug product for another isn’t new—by some accounts, it goes back at least 100 years—but it has intensified in recent years with drug companies, insurers and health care providers at odds over rising pharmaceutical costs.

Manufacturers of brand-name pharmaceuticals trying to generate profits on the drugs they invent are loath to give over market share to cheaper generics, but insurers trying to drive costs down often push providers to prescribe and dispense generics and encourage patients to take generics through higher co-pays on brand-name medications.

A group of University researchers conducted an in-depth look at the issues of brand-name medications versus their generic equivalents. They are publishing their findings in a seven-article series in the Journal of the American Pharmaceutical Association, Three of the pieces appear in the September/October issue.

“We feel there’s a lack of knowledge on the part of employers, insurers and providers regarding generic drugs and that these changes in prescription drug benefit programs should be made based upon a better understanding of the issues,” says Duane Kirking, lead investigator on the project. The Blue Cross Blue Shield of Michigan Foundation provided $50,000 in funding toward the research.

Among their findings:

  • In spite of changes in the marketplace and projections for massive growth, generic drugs appear to have stabilized at about 40 percent of prescriptions and 10 percent of pharmaceutical sales. Kirking says he doesn’t expect that share to change substantially, because even as manufacturers bring more generics to market, brand-name manufacturers introduce more new (and often more effective) drugs, which enjoy patent protection before they have to face competition from generics.

  • The science demonstrating that generics are, in fact, bioequivalent to the name brands with which they compete has improved greatly. One argument opposing generics traditionally has been that they are not a true substitute, but now it is easier to tell if that is true scientifically, Kirking says.

  • Significant restructuring in the pharmaceutical industry has led to cases where the same company makes a brand-name drug and its generic equivalent, or owns a subsidiary that does, while those companies that make only generics are merging and consolidating.

    While drug advertising aimed directly at consumers has developed name recognition among patients, often they can be won over to generics fairly easily if there is a financial incentive, Kirking says. They might ask for the brand-name drug but they will switch to the generic if they find the brand-name version will cost them more out-of-pocket.

    If the switch to generics is part of a program implemented by a pharmacy benefits manager, these conversations can happen quickly. Kirking says that when well-known anti-depressant Prozac went off patent in early August, movement to the use of the generic product occurred even faster than the typical generic penetration rate of about 75 percent in six months.

    The Journal of the American Pharmaceutical Association published U-M articles in July/August on the historical issues of generics and on the economic and structural trends in the generic market. The July/August issue has articles about the issues and concerns of patients, physicians and pharmacists. The series will conclude with articles in the November/December publication about the scientific and regulatory environment of generic pharmaceuticals and the legal issues of whether pharmacists should dispense generics.

    Also involved in the project are Frank Ascione, professor of social and administrative sciences and associate dean for academic affairs; Caroline Gaither, associate professor of social and administrative sciences; and Lynda Welage, associate professor of clinical sciences, all at the College of Pharmacy. In addition, Welage serves as a clinical pharmacist for University Hospitals and Ascione holds an appointment as a faculty associate at the U-M Institute of Gerontology.