Comments on: The Truth About Generic Drugs

By: Kaiser Permanente

Kaiser Permanente — Wed, 27 Jan 2010 09:18:37 +0000

Wired ran an interesting article on how new drugs in clinical trials are finding it harder to outperform placebos. For some reason, placebos have become more effective over the last generation!

By: Adrian

Adrian — Sun, 27 Dec 2009 07:35:50 +0000

I have spoken to two different MD’s who are both in agreement with the theme of this post: generics are usually just as effective, or very close to the brand version, but there are exceptions and you just have to educate yourself on what those exceptions are (and they may vary from person to person).

By: MichaelM

MichaelM — Sun, 27 Dec 2009 03:07:00 +0000

Another possibility is that placebo power makes the branded version more effective. Wired ran an interesting article on how new drugs in clinical trials are finding it harder to outperform placebos. For some reason, placebos have become more effective over the last generation!

http://www.wired.com/medtech/drugs/magazine/17-09/ff_placebo_effect

By: MarkL

MarkL — Sat, 26 Dec 2009 00:24:31 +0000

You haven’t considered the possibility of simple fraud. Many generic drugs are produced in the same country that included Certain Highly Inexpensive Non-nutritional Additives <- (and some poisonous ones) in human and pet products to increase short-term profits with no consideration whatever for the health of their customers or the reputation of the producers. Such practices appear to be normal in that country, so why assume that generic drugs produced there are produced according to adequate standards?

By: kevindick

kevindick — Thu, 24 Dec 2009 07:04:17 +0000

I have a solution. What you want to do is make sure that the generic companies have the incentive to make sure their generics are as close to the original as possible.

So you have a challenge system. Third parties can put up the money to do a “challenge trial”. They pay a neutral laboratory to run a clinical trial of the generic versus the original. We set some sort of statistical confidence bounds to determine if the challenge “succeeds” or “fails”.

If it fails, the challengers have to eat the cost. But if it succeeds, the generic company has to pay 3x the cost of the trial to the third party (or 2x or 10x–whatever an economic study shows is the optimal deterrent).

My guess is that the generic companies would make darn sure they have good products. And if they ever slipped up, third parties backed by investors would jump at the opportunity.

By: danielhorowitz

danielhorowitz — Wed, 23 Dec 2009 22:54:15 +0000

I’m not all that familiar with the history of the industry, so I don’t know exactly how we got where we are today. But here is my take. There is a conspiracy to provide inexpensive drugs to people. (not all conspiracies are bad) I don’t know when the best time to lobby congress/fda was, but I don’t think it’s a battle they can win today. The FDA wants to allow people access to low cost medications and big pharma and their patents are in the way.

WRT patent-holders (mostly big pharma,) their only option would be to

1) Run clinical trials against generics (costly)
2) Run more clinical trials against more generics until the results come out in their favor (costly)
Consequently:
3) FDA makes it harder to get generic drugs approved. (costly)

I think in this situation the aggregate supply of generic drugs is temporarily reduced, but in the long run this only raises the costs to produce generic drugs. Competition decreases and everyone loses. Many people manufacture generics that are almost identical to the original. Assuming a fair trial, these generics will come out as good as the brand name. Perhaps a generic will fare better than a brand name in a clinical trial, then what?

My guess is that over time the quality of generic drugs has decreased as the number of manufacturers has increased.

Also, the business of patent holders and generics are now intertwined. Many big pharma have used their hordes of cash to purchase generic drug manufacturers. And the real kicker? The company may now produce both the brand name and generic that are significantly different. (The generic manufacturing subsidiary operates separately)

By: Rafe Furst

Rafe Furst — Wed, 23 Dec 2009 21:59:14 +0000

Great post, Daniel. I’m curious though — excuse my not having read the original article, but that’s what a great summary is supposed to do: save me the time — the incentives are counterintuitive to me…

I would assume that patent-holders don’t want any generics and thus they would lobby Congress / FDA hard to make the conditions impossible to comply with so they strangle the market.

I’m clearly missing some key insight into the industry, please shed some light here…