Generic drug

From Wikipedia, the free encyclopedia

 

In some countries, such as Brazil (photo) and France, more than 20% of all drug sales in units are generic.

 

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 believed to be equivalent in performance. 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.

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 Non-proprietary 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. (The FDA's use of the word "identical" is a legal interpretation, not literal.) 

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.

In most cases, generic products become available after the patent protections, afforded to a 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, 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.

Manufacturers, wholesalers, insurers, and drugstores can all increase prices at various stages of production and distribution.

In 2014, according to an analysis by the Generic Pharmaceutical Association, generic drugs accounted for 88% of the 4.3 billion prescriptions filled in the United States.

"Branded generics" on the other hand are defined by the FDA and NHS 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." 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. For example, the largest revenues of Ranbaxy, now owned by Sun Pharma, came from branded generics.

Nomenclature

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

Economics

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. 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. 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 2003 and US$2.6 billion in 2014. 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 referred to by critics as "evergreening", but at some point there is no patent protection available. 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.

Large pharmaceutical companies often spend millions protecting their patents from generic competition. 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.

Generic drugs are usually sold for significantly lower prices than their branded equivalents and at lower profit margins. One reason for this is that competition increases among producers when a drug is no longer protected by patents. 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. The prices are often low enough for users in less-prosperous countries to afford them. For example, Thailand has imported millions of doses of a generic version of the blood-thinning drug Plavix (used to help prevent heart attacks) from India, the leading manufacturer of generic drugs, at a cost of US$ 0.03 per dose.

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.

India is a leading country in the world's generic drugs market, exporting US$17.3 billion worth of drugs in the 2017–18 (April–March) year. India exports generic drugs to the United States and the European Union.

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, 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. The NHS spent about £4.3 billion on generic medicines in 2016-17.

In 2012, 84% of prescriptions in the US were filled with generic drugs, and in 2014, the use of generic drugs in the United States led to US$254 billion in health care savings.

In the mid 2010s 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 2018, but in 2019 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.

Regulation

Most nations require generic drug manufacturers to prove that their formulations are bioequivalent to their brand-name counterparts.

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. However, the therapeutic effect of the drug must be the same ("pharmaceutical alternative"). Most small molecule drugs are accepted as bioequivalent if their pharmacokinetic parameters of area under the curve (AUC) and maximum concentration (C_max) are within a 90% confidence interval of 80–125%; most approved generics are well within this limit. For more complex products—such as inhalers, patch delivery systems, liposomal preparations, or biosimilar drugs—demonstrating pharmacodynamic or clinical equivalence is more challenging.

United States

Enacted in 1984, the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch–Waxman Act, standardized procedures for recognition of generic drugs. In 2007, the FDA launched the Generic Initiative for Value and Efficiency (GIVE): an effort to modernize and streamline the generic drug approval process, and to increase the number and variety of generic products available.

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. 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%. (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 1996 and 2007 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. 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.

Generic Drugs Research

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. For example, as of 2006, diltiazem hydrochloride had four equivalence groups, all using the same active ingredient, but considered equivalent only within each group.

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. 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.

When faced with patent litigation from the drug innovator or patent holder, generic companies will often counter-sue, challenging the validity of the patent. 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.

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 2011 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.

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. 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.

Acceptance

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, but many physicians are not comfortable with their patients taking branded generic equivalents. 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.

Fraud

A series of scandals around the approval of generic drugs in the late 1980s 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.

In 2007, North Carolina Public Radio's The People's Pharmacy began reporting on consumers' complaints that generic versions of bupropion (Wellbutrin) were yielding unexpected effects. 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 2012 that they were not bioequivalent.

Problems with the quality of generic drugs – especially those produced outside the United States – are widespread as of 2019. 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.

Litigation

Two women, each claiming to have suffered severe medical complications from a generic version of metoclopramide, lost their Supreme Court appeal on June 23, 2011. In a 5–4 ruling in PLIVA, Inc. v. Mensing, the court held that generic companies cannot be held liable for information, or the lack of information, on the originator's label.

India

The Indian government began encouraging more drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970. 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. The code of ethics issued by the Medical Council of India in 2002 calls for physicians to prescribe drugs by their generic names only. 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 2017–18 (April–March) year.

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. However, entry to the World Trade Organization has brought a stronger patent system.

Industry

As of 2019, several major companies traditionally dominate the generic drugs market, including Teva, Mylan, Novartis' Sandoz, Amneal and Endo International plc. Prices in traditional generic drugs have declined and newer companies such 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.

Prescription costs

From Wikipedia, the free encyclopedia

 

Prescription costs are a common health care cost for many people. Prescription costs are influenced by multiple factors such as patents, stakeholder influence, and marketing expenses. A number of countries including Canada, parts of Europe, and Brasil use external reference pricing as a means to compare drug prices and to determine a base price for a particular medication.

Definition

Prescription cost is defined as a cost which the patient has to pay to get medicines or treatments which are written as directions on prescription by a prescribers. The cost is generally influenced by a financial relationship between pharmaceutical manufacturers, wholesale distributors and pharmacies. In addition to the financial relationship, each nation has different systems to control the cost of prescriptions. In US, a pharmacy benefit manager, a third-party organization, such as private insurances or government-run health insurances will implement cost containment programs, such as establishing a formulary, to contain the cost.  In UK, a government agency, the National Institute of Health and Care Excellence (NICE), will negotiate with pharmaceutical companies to contain cost of prescription drug. Prescription costs are a regular health care cost for the sick and may mean economic hardship for the underprivileged. With a healthcare insurance, the patient in US pays co-pay (the amount the patient must pay for each drugs or medical visit), deductible (the amount the patient has to pay before the insurance starts sharing the cost) and co-insurance (the amount the patient has to pay after deductible) for prescription costs. After reaching the out of pocket maximum, the insurance company will pay 100% of the prescription cost. The amount the patient has to pay depends on the healthcare insurance plan the patient has.

As of 2017, prescription costs range from just more than 15% in high income countries to 25% in lower-middle income countries and low income countries.

Drug pricing factors

Drug costs in different countries

Drug	US	Canada	UK	Spain	Netherlands
Enbrel	$2,225	$1,646	$1,117	$1,386	$1,509
Celebrex	$225	$51	$112	$164	$112
Copaxone	$3,903	$1,400	$862	$1,191	$1,190
Cymbalta	$194	$110	$46	$71	$52
Humira	$2,246	$1,950	$1,102	$1,498	$1,498
Nexium	$215	$30	$42	$58	$23

Pricing any pharmaceutical drug for sale to the general public is daunting. Per Forbes, setting a high ceiling price for a new drug could be problematic as physicians could shy away from prescribing the drug, because the cost could be too great for the benefit. Setting too low of a price could imply inferiority, that the drug is too "weak" for the market. There are many different pricing strategies and factors that go into the research and evaluation of a future drug’s price with whole departments within US pharmaceutical companies like Pfizer devoted to cost analysis. Regardless of the pricing strategy the common theme within all factors is to maximize profits.

This chart shows discrepancies in drug pricing in different countries, which indicates differences in both market conditions and government regulation. For instance, Canada has federal Patented Medicine Prices Review Board (PMPRB), which does not set prices of drugs, but it reviews to determine if the prices are not excessive.

Marketing expenses

A study has placed the amount spent on drug marketing at 2-19 times that on drug research.

Research and development

The table shows research and development statistics for pharmaceutical companies as of 2013 per Astra Zeneca.

Pharmaceutical company	# of drugs approved	Average R&D spending per drug (in $ Millions)	Total R&D spending from 1997-2011 (in $ Millions)
AstraZeneca	5	$11,790.93	$58,955
GlaxoSmithKline	10	$8,170.81	$81,708
Sanofi	8	$7,909.26	$63,274
Roche Holding	11	$7,803.77	$85,841
Pfizer	14	$7,727.03	$108,178
Johnson & Johnson	15	$5,885.65	$88,285
Eli Lilly & Co.	11	$4,577.04	$50,347
Abbott Laboratories	8	$4,496.21	$35,970
Merck & Co Inc.	16	$4,209.99	$67,360
Bristol-Meyers Squibb Co.	11	$4,152.26	$45,675
Novartis	21	$3,983.13	$83,646
Amgen Inc.	9	$3,692.14	$33,229

Severin Schwan, the CEO of the Swiss company Roche, reported in 2012 that Roche’s research and development costs in 2014 amounted to $8.4 billion, a quarter of the entire National Institutes of Health budget. Given the profit-driven nature of pharmaceutical companies and their research and development expenses, companies use their research and development expenses as a starting point to determine appropriate yet profitable prices.

Pharmaceutical companies spend a large amount on research and development before a drug is released to the market and costs can be further divided into three major fields: the discovery into the drug’s specific medical field, clinical trials, and failed drugs.

Discovery

The process of drug discovery can involve scientists determining the germs, viruses, and bacteria that cause a specific disease or illness. The time frame can range from 3–20 years and costs can range between several million to tens of millions of dollars. Research teams attempt to break down disease components to find abnormal events/processes taking place in the body. Only then do scientists work on developing chemical compounds to treat these abnormalities with the aid of computer models.

After "discovery" and a creation of a chemical compound, pharmaceutical companies move forward with the Investigational New Drug (IND) Application from the FDA. After the investigation into the drug and given approval, pharmaceutical companies can move into pre-clinical trials and clinical trials.

Trials

Drug development and pre-clinical trials focus on non-human subjects and work on animals such as rats. 

The Food and Drug Administration requires at least 3 phases of clinical trials that assess the side effects and the effectiveness of the drug. An analysis of trial costs of approved drugs by the FDA from 2015-2016 found that out of 138 clinical trials, 59 new therapeutic agents were approved by the FDA. These trials have a medium estimated cost of $19 million US dollars. A single phase 3 trial can cost upwards of $100 million.

• Phase 1 lasts several months and aims to assess the safety and dosage of the drug. The purpose is to determine how the drug affects the body.
• Phase 2 lasts several months to two years and aims to assess the efficacy and side effect profile of the drug.
• Phase 3 lasts 1 to 4 years and aims to continue assessing and monitoring the efficacy and side effects of the drug. Phase 3 aims to determine the risks and benefits of a drug to its intended patient population.
• Phase 4 trials occur after the drug is approved by the FDA and aims to continue monitoring safety and efficacy of the drug.

Of these phases, the phase 3 is the most costly process of drug development.  It accounts for about 90 percent of the cost to pharmaceutical companies to develop a medication.

Failed drugs

The processes of "discovery" and clinical trials amounts to approximately 12 years from research lab to the patient, in which about 10% of all drugs that start pre-clinical trials ever make it to actual human testing. Each pharmaceutical company (who have hundreds of drugs moving in and out of these phases) will never recuperate the costs of "failed drugs". Thus, profits made from one drug need to cover the costs of previous "failed drugs".

Relationship

Overall, research and development expenses relating to a pharmaceutical drug amount to the billions. For example, it was reported that AstraZeneca spent upwards on average of $11 billion per drug for research and developmental purposes. The average of $11 billion only comprises the "discovery" costs, pre-clinical and clinical trial costs, and other expenses. With the addition of "failed drug" costs, the $11 billion easily amounts to over $20 billion in expenses. Therefore, an appropriate figure like $60 billion would be approximate sales figure that a pharmaceutical company like AstraZeneca would aim to generate to cover these costs and make a profit at the same time.

Total research and development costs provide pharmaceutical companies a ballpark estimation of total expenses. This is important in setting projected profit goals for a particular drug and thus, is one of the most necessary steps pharmaceutical companies take in pricing a particular drug.

Stakeholders

Patients and doctors can also have some input in pricing, though indirectly. Customers in the United States have been protesting the high prices for recent "miracle" drugs like Daraprim and Harvoni, both of which attempt to cure or treat major diseases (HIV/AIDS and hepatitis C). Public outcry has worked in many cases to control and even decide the pricing for some drugs. For example, there was severe backlash over Daraprim, a drug that treats toxoplasmosis. Turing Pharmaceuticals under the leadership of Martin Shkreli raised the price of the drug 5,500% from $13.50 to $750 per pill. After denouncement from 2016 presidential candidates Hillary Clinton and Bernie Sanders, Turing Pharmaceuticals decided to reduce the price.

With the recent trend of price gouging, legislators have introduced reform to curb these hikes, effectively controlling the pricing of drugs in the United States. Hillary Clinton announced a proposal to help patients with chronic and severe health conditions by placing a nationwide monthly cap of $250 on prescription out-of-pocket drugs.

Research for a drug that is curing something no one has ever cured before will cost much more than research for the medicine of a very common disease that has known treatments. Also, there would be more patients for a more common ailment so that prices would be lower. Soliris only treats two extremely rare diseases, so the number of consumers is low, making it an orphan drug. Soliris still makes money because of its high price of over $400,000 per year per patient. The benefit of this drug is immense because it cures very rare diseases that would cost much more money to treat otherwise, which saves insurance companies and health agencies millions of dollars. Hence, insurance companies and health agencies are willing to pay these prices.

Public policy

Policy makers in some countries have placed controls on the amount pharmaceutical companies can raise the price of drugs. In 2017, Democratic party leaders proposed the creation of a new federal agency to investigate and perhaps fine drug manufacturers who make unjustified price increases. Pharmaceutical companies would be required to submit a justification for a drug with a “significant price increase” within at least 30 days of implementation. Under the terms of the proposal, Mylan’s well-publicized price increase for its EpiPen product would fall below the criteria for a significant price increase, while the 5000% overnight increase of Turing Pharmaceuticals Daraprim (pyrimethamine) would be subject to regulatory action.

Patents

Drug developers are able to gain Patent rights to their particular medication. Two patents that are commonly used are process patents and product patents. These patents contribute to fluctuations in drug pricing. Process patents only provide developers intellectual claim to the methods in which the product was manufactured. Comparatively, product patents give the developer prime control as the "single innovating firm" of that product. Product patents allow developers to maintain exclusivity of their product for up to a decade. With this exclusivity, the developer can establish a monopoly and determine an appropriate pricing for their product.

Effect of cost on consumers

When the price of medicine goes up the quality of life of consumers who need the medicine decreases. Consumers who have increased costs for medicine are more likely to change their lifestyle to spend less money on groceries, entertainment, and routine family needs. They are more likely to go into debt or postpone paying their existing debts. High drug prices can prevent people from saving for retirement. It is not uncommon for typical people to have challenges paying medical bills. Some people fail to get the medical care they need due to lack of money to pay for it.

Consumers respond to higher drug prices by doing what they can to save drug costs. The most commonly recommended course of action for consumers who seek to lower their drug costs is for them to tell their own doctor and pharmacist that they need to save money and then ask for advice. Doctors and pharmacists are professionals who know their fields and are the most likely source of information about options for reducing cost.

Depending on the country and health policies implemented, there are also options to search for the most convenient and affordable health insurance plans without having to consult a healthcare provider or obtain insurance through the employer. However, those who seek to purchase insurance individually through the individual market are most likely to be underinsured and therefore could potentially have a higher prescription cost.

There can be significant variation of prices for drugs in different pharmacies, even within a single geographical area. Because of this, some people check prices at multiple pharmacies to seek lower prices. Online pharmacies can offer low prices but many consumers using online services have experienced Internet fraud and other problems.

Some consumers lower costs by asking their doctor for generic drugs when available. Because pharmaceutical companies often set prices by pills rather than by dose, consumers can sometimes buy double-dose pills, split the pills themselves with their doctor's permission, and save money in the process

By region

United States

Prescription drug prices in the United States have been among the highest in the world. The high cost of prescription drugs became a major topic of discussion in the new millennium, leading up to the U.S. health care reform debate of 2009, and received renewed attention in 2015. High prices have been attributed to monopolies given to manufacturers by the government and a lack of ability for organizations to negotiate prices.

Individuals are able to enroll in health insurance plans, which often include prescription medication coverage. However, insurance companies decide which drugs they will cover by creating a formulary. If a medication is not on this list, the insurance company will usually not be willing to pay for it. There are also often tiers within this approved drug list, as the insurance company may be willing to cover a portion of one drug but prefer and completely cover a cheaper alternative.

United Kingdom

Most people in the countries of the United Kingdom get prescriptions partly or totally paid for by the National Health Service.

Developing world

In many developing countries the cost of proprietary drugs is beyond the reach of the majority of the population. There have been attempts both by international agreements and by pharmaceutical companies to provide drugs at low cost, either supplied by manufacturers who own the drugs, or manufactured locally as generic versions of drugs which are elsewhere protected by patent. Countries without manufacturing capability may import such generics. 

The legal framework regarding generic versions of patented drugs is formalised in the Doha Declaration on Trade-Related Aspects of Intellectual Property Rights and later agreements.

People and governments in developing countries have far fewer financial resources to bear high monopoly prices and drug prices even for patent-protected medicines in these countries are often considerably lower. Profits are often insubstantial and do not proportionally cover development costs. In many cases, a patent holder will license generic manufacturers to sell to low-income countries at low cost. India has less restrictive patent regimes which make the manufacture of generic medications possible sooner, for sale domestically or in other countries where the patent protections do not apply. Typically the cost of making small-molecule drugs is only a very small portion of a developed-country market monopoly price, which makes generic manufacturing very cheap. In contrast, some drugs are inherently expensive to produce, such as the biopharmaceutical drug Cerezyme, typically costing $200,000 per year in the United States.

Prescription drug

From Wikipedia, the free encyclopedia

Photo of the packaging of four medicines registered in the UK, showing their Product Licence Numbers and symbols denoting if they are Prescription Only Medicine (POM) or Pharmacy Medicine (P)

A prescription drug (also prescription medication or prescription medicine) is a pharmaceutical drug that legally requires a medical prescription to be dispensed. In contrast, over-the-counter drugs can be obtained without a prescription. The reason for this difference in substance control is the potential scope of misuse, from drug abuse to practicing medicine without a license and without sufficient education. Different jurisdictions have different definitions of what constitutes a prescription drug. 

"Rx" (℞) is often used as a short form for prescription drug in North America - a contraction of the Latin word "recipe" (an imperative form of "recipere") meaning "take". Prescription drugs are often dispensed together with a monograph (in Europe, a Patient Information Leaflet or PIL) that gives detailed information about the drug.

The use of prescription drugs has been increasing since the 1960s.

Regulation

Australia

In Australia, the Standard for the Uniform Scheduling of Medicines and Poisons (SUSMP) governs the manufacture and supply of drugs with several categories:

• Schedule 1 – Defunct
• Schedule 2 – Pharmacy Medicine
• Schedule 3 – Pharmacist-Only Medicine
• Schedule 4 – Prescription-Only Medicine/Prescription Animal Remedy
• Schedule 5 – Caution
• Schedule 6 – Poison
• Schedule 7 – Dangerous Poison
• Schedule 8 – Controlled Drug (Possession without authority illegal)
• Schedule 9 – Prohibited Substance
• Unscheduled Substances

Like in the UK, the patient visits a health practitioner, (doctor, nurse, dentist, pediatrist, etc.,), who may prescribe the drug. 

Many prescriptions issued by health practitioners in Australia are covered by the Pharmaceutical Benefits Scheme, a scheme that provides subsidised prescription drugs to residents of Australia to ensure that all Australians have affordable and reliable access to a wide range of necessary medicines. When purchasing a drug under the PBS, the consumer pays no more than the patient co-payment contribution, which, as of January 1, 2019, is A$40.30 for general patients. Those covered by government entitlements (low-income earners, welfare recipients, Health Care Card holders, etc.) and or under the Repatriation Pharmaceutical Benefits Scheme (RPBS) have a reduced co-payment, which is $6.50 in 2019. The co-payments are compulsory and can be discounted by pharmacies up to a maximum of A$1.00 at cost to the pharmacy.

United Kingdom

In the United Kingdom, the Medicines Act 1968 and the Prescription Only Medicines (Human Use) Order 1997 contain regulations that cover the supply of sale, use, prescribing and production of medicines. There are three categories of medicine:

• Prescription-only medicines (POM), which may be dispensed (sold in the case of a private prescription) by a pharmacist if they are prescribed by a prescriber
• Pharmacy medicines (P), which may be sold by a pharmacist without a prescription
• General sales list (GSL) medicines, which may be sold without a prescription in any shop

The possession of a prescription-only medicine without a prescription is legal unless it is covered by the Misuse of Drugs Act 1971.

A patient visits a medical practitioner or dentist, who may prescribe drugs and certain other medical items, such as blood glucose-testing equipment for diabetics. Also, qualified and experienced nurses and pharmacists may be independent prescribers. Both may prescribe all POMs (including controlled drugs), but may not prescribe Schedule 1 controlled drugs, and 3 listed controlled drugs for the treatment of addiction; which is similar to doctors, who require a special license from the Home Office to prescribe schedule 1 drugs. Schedule 1 drugs have little or no medical benefit, hence their limitations on prescribing. District nurses and health visitors have had limited prescribing rights since the mid-1990s; until then, prescriptions for dressings and simple medicines had to be signed by a doctor. Once issued, a prescription is taken by the patient to a pharmacy, which dispenses the medicine.

Most prescriptions are NHS prescriptions, subject to a standard charge that is unrelated to what is dispensed. The NHS prescription fee was increased to £9.00 per item in England on 1 April 2019; prescriptions are free of charge if prescribed and dispensed in Scotland, Wales and Northern Ireland, and for some patients in England, such as inpatients, children, those over 60s or with certain medical conditions, and claimants of certain benefits. The pharmacy charges the NHS the actual cost of the medicine, which may vary from a few pence to hundreds of pounds. A patient can consolidate prescription charges by using a prescription payment certificate (informally a "season ticket"), effectively capping costs at £29.10 per quarter or £104.00 per year.

Outside the NHS, private prescriptions are issued by private medical practitioner and sometimes under the NHS for medicines that are not covered by the NHS. A patient pays the pharmacy the normal price for medicine prescribed outside the NHS. 

Survey results published by Ipsos MORI in 2008 found that around 800,000 people in England were not collecting prescriptions or getting them dispensed because of the cost, the same as in 2001.

United States

In the United States, the Federal Food, Drug, and Cosmetic Act defines what substances require a prescription for them to be dispensed by a pharmacy. The federal government authorizes physicians (of any specialty), physician assistants, nurse practitioners and other advanced practice nurses, veterinarians, dentists, and optometrists to prescribe any controlled substance. They are then issued unique Drug Enforcement Act numbers; many other mental and physical health technicians, including basic-level registered nurses, medical assistants, emergency medical technicians, most psychologists, and social workers, for example, do not have the authority to prescribe any controlled substance.

The Controlled Substances Act (CSA) was enacted into law by the US Congress of the United States in 1970. It is the federal drug law that regulates manufacture, importation, possession, use, and distribution of certain substances. The legislation classes substances into five schedules, with varying qualifications for each schedule. 

The safety and the effectiveness of prescription drugs in the US are regulated by the 1987 Prescription Drug Marketing Act (PDMA). The Food and Drug Administration (FDA) is charged with implementing the law.

Misuse or abuse of prescription drugs can lead to adverse drug events, including those due to dangerous drug interactions.

The package insert for a prescription drug contains information about the intended effect of the drug and how it works in the body. It also contains information about side effects, how a patient should take the drug, and cautions for its use, including warnings about allergies. 

As a general rule, over-the-counter drugs (OTC) are used to treat a condition that does not need care from a healthcare professional if have been proven to meet higher safety standards for self-medication by patients. Often, a lower strength of a drug will be approved for OTC use, but higher strengths require a prescription to be obtained; a notable case is ibuprofen, which has been widely available as an OTC pain killer since the mid-1980s, but it is available by prescription in doses up to four times the OTC dose for severe pain that is not adequately controlled by the OTC strength.

Herbal preparations, amino acids, vitamins, minerals, and other food supplements are regulated by the FDA as dietary supplements. Because specific health claims cannot be made, the consumer must make informed decisions when purchasing such products.

By law, American pharmacies operated by "membership clubs" such as Costco and Sam's Club must allow non-members to use their pharmacy services and may not charge more for these services than they charge as their members.

Physicians may legally prescribe drugs for uses other than those specified in the FDA approval, known as off-label use. Drug companies, however, are prohibited from marketing their drugs for off-label uses.

Large US retailers that operate pharmacies and pharmacy chains use inexpensive generic drugs as a way to attract customers into stores. Several chains, including Walmart, Kroger (including subsidiaries such as Dillons), Target, and others, offer $4 monthly prescriptions on select generic drugs as a customer draw. Publix Supermarkets, which has pharmacies in many of their stores, offers free prescriptions on a few older but still effective medications to their customers. The maximum supply is for 30 days. 

Some prescription drugs are commonly abused, particularly those marketed as analgesics, including fentanyl (Duragesic), hydrocodone (Vicodin), oxycodone (OxyContin), oxymorphone (Opana), propoxyphene (Darvon), hydromorphone (Dilaudid), meperidine (Demerol), and diphenoxylate (Lomotil).

Some prescription painkillers have been found to be addictive, and unintentional poisoning deaths in the United States have skyrocketed since the 1990s according to the National Safety Council. Prescriber education guidelines as well as patient education, prescription drug monitoring programs and regulation of pain clinics are regulatory tactics which have been used to curtail opioid use and misuse.

Expiration date

The expiration date, required in several countries, specifies the date up to which the manufacturer guarantees the full potency and safety of a drug. In the United States, expiration dates are determined by regulations established by the FDA. The FDA advises consumers not to use products after their expiration dates.

A study conducted by the U.S. Food and Drug Administration covered over 100 drugs, prescription and over-the-counter. The results showed that about 85% of them were safe and effective as far as 15 years past their expiration date. Joel Davis, a former FDA expiration-date compliance chief, said that with a handful of exceptions—notably nitroglycerin, insulin, some liquid antibiotics; outdated tetracyclines can cause Fanconi syndrome—most expired drugs are probably effective.

The American Medical Association (AMA) issued a report and statement on Pharmaceutical Expiration Dates. The Harvard Medical School Family Health Guide notes that, with rare exceptions, "it's true the effectiveness of a drug may decrease over time, but much of the original potency still remains even a decade after the expiration date".

The expiration date is the final day that the manufacturer guarantees the full potency and safety of a medication. Drug expiration dates exist on most medication labels, including prescription, over-the-counter (OTC) and dietary (herbal) supplements. U.S. pharmaceutical manufacturers are required by law to place expiration dates on prescription products prior to marketing. For legal and liability reasons, manufacturers will not make recommendations about the stability of drugs past the original expiration date.

Cost

Prices for prescription drugs vary widely around the world. Prescription costs for biosimilar and generic drugs are usually less than brand names, but the cost is different from one pharmacy to another.

Prescription drug prices including generic prices are rising faster than the average rate of inflation. To subsidize prescription drug costs, some patients have decided to buy medicine online.

Generics undergo strict scrutiny to meet the equal efficacy, safety, dosage, strength, stability, and quality of brand name drugs. Generics are developed after the brand name has already been established, and so generic drug approval in many aspects has a shortened approval process because it replicates the brand name drug.

Brand name drugs cost more due to time, money, and resources that drug companies invest in in order to repeat research clinical trials that the FDA requires for the drug to remain in the market. Because drug companies have to invest more in research costs to do this, brand name drug prices are much higher when sold to consumers.

When the patent expires for a brand name drug, generic versions of that drug are produced by other companies and are sold for lower price. By switching to generic prescription drugs, patients can save significant amounts of money: e.g. one study by the FDA showed an example with more than 50% savings of a patient's overall costs of their prescription drugs.

Drug cost containment strategies in the US

In the United States there are many resources available to patients to lower the costs of medication. These include copayments, coinsurance and deductibles. The Medicaid Drug Rebate Program is another example.

Generic drug program lowers amount of money patient has to pay when picking up their prescription at the pharmacy and as their name implies they only cover generic drugs.

Co-pay assistance programs are program to help patient lower costs of specialty medications: i.e. medications that are on restricted formulary, limited distribution, and with no generics available. These medications can include drugs for HIV, hepatitis C, and multiple sclerosis. Patient Assistance Program Center (RxAssist) has a list of foundations that provide co-pay assistance programs. It is important to note that co-pay assistance programs are for the under-insured patients. Patients without insurance are not eligible for this resource, however they may be eligible for patient assistance programs.

Patient assistance programs are funded by the manufacturer of the medication. Patients can often apply to these programs through the manufacturer's website. This type of assistance program is one of the few options for the uninsured patient.

The out of pocket costs for patients enrolled in co-pay assistance or patient assistance programs are $0. It is a major resource to help lower costs of medications – however, many providers and patients are not aware of the resources.

Environment

Traces of prescription drugs — including antibiotics, anti-convulsants, mood stabilizers and sex hormones — have been detected in drinking water. Pharmaceutically active compounds (PhACs) discarded from human therapy and their metabolites have been found to not be completely eliminated by sewage treatment plants and have been found at low concentrations in surface waters downstream from those plants. The continuous discarding of incompletely treated water may interact with other environmental chemicals and lead to uncertain ecological effects. Due to most pharmaceuticals being highly soluble, fish and other aquatic organisms are susceptible to their effects. The long term effects of pharmaceuticals in the environment may affect survival and reproduction of such organisms. However, levels of medical drug waste in the water is at a low enough level that it is not a direct concern to human health. However, processes, such as biomagnification, are potential concerns in impacting human health.

On the other hand, there is clear evidence of harm to aquatic animals and fauna. Recent advancements in technology have allowed scientists to detect smaller, trace quantities of pharmaceuticals in the ng/ml range. Despite being found such low concentrations, female hormonal contraceptives have been documented to cause feminizing effects on males of vertebrate species, such as fish, frogs and crocodiles. A promising model has been developed to further study the effects on the aquatic environment. The biological read across model combines the concepts of mechanism of action (MoA) and adverse outcomes pathway (AOP). In other words, the species being studied needs to have similar mechanisms by which the pharmaceutical acts on the species and reach similar concentrations that would be enough to cause an effect in humans. Studying these relations may give us more quantifiable information on the effects of pharmaceuticals in the environment.

Currently, research is being done on various methods of reducing chemical waste in the environment. In addition, the U.S. Food & Drug Administration (FDA) established guidelines in 2007 to inform consumers should dispose of prescription drugs. When medications do not include specific disposal instructions, patients should not flush medications in the toilet, but instead use medication take-back programs. This aims to reduce the amount of pharmaceutical waste that gets into sewage and landfills. If no take-back programs are available, prescription drugs can be discarded in household trash after they are crushed and/or dissolved and then mixed in a separate container or sealable bag with undesirable substances like cat litter or other unappealing material (to discourage consumption).