Pharmaceutical Practices - Generics

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Obstruction of Generic Pharmaceuticals in the Marketplace

It has been estimated that most of the major pharmaceutical companies have engaged in some unusual practices to keep generic equivalents of their products from entering the marketplace. These measures usually have a negative effect on consumers and health care plan providers, prohibiting them from buying equally effective products at a discounted rate. The objective of the major pharmaceutical companies in attempting to prevent generics from entering the market is clearly to provide their shareholders with exceptional profits. Some would argue that there is a morality argument to be made against “big pharma” in these cases of market manipulation. We will explore the moral argument as well as the effects on the stakeholders of major pharmaceutical companies.

Generic drug equivalents can be considered a key to the availability of modern pharmacotherapy in the world. Usually, they may enter the market after the expiration of the patent coverage of the original products takes place allowing cheaper, but still highly effective treatments to be spread worldwide at a great discount. Generics usually command a price that is 20 – 80% lower than those of the original drugs.

The process of innovation in the pharmaceutical industry has been supported by forming a competitive environment for the original products. The original patent drug usually has a monopoly position and the company tries desperately to maintain this position as long as possible. Over the years there have been several practices employed by these pharmaceutical companies to delay the introduction of generics in the marketplace, in fact there has even been legislation on this issue, most notably in 1984 and 2...

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... the flow of generic drugs into our marketplace. The US government believes that the flow of these generics, not all of which are approved generics for use in the US, is dangerous to the population and must be stopped. Canada, Israel, and many Asia-Pacific countries produce generic alternatives to US based patent drugs which violate US law.

In closing, it is my opinion that the marketplace will ultimately fix this problem. This has become increasingly clear in the results already obtained by major health care providers, taxpayers, and most notably big-box retail stores like Target and Wal-Mart. The consumer demands generic alternatives be made available in a reasonable timeframe and “big pharma” is starting to bend more easily. Legislation has certainly helped to pave the way, however, the stakeholders of the industry will ultimately fix these perceived injustices.
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