FDA: Market Entry of Generics Can Reduce Prices Versus Brand-Names

The market entry of at least two generic versions of a medication can reduce the price of the treatment by almost half compared with the price of the brand-name version, according to an FDA analysis released on Tuesday. For the analysis, FDA examined retail data from 1999 to 2004 on single-ingredient medications collected by IMS Health. According to the analysis, the market entry of one generic version of a medication can reduce the price of the treatment by 6% compared with the price of the brand-name version, and the market entry of a second generic version can reduce the price by 48%. In addition, the market entry of nine generic versions of a medication can reduce the price of the treatment by 80% compared with the price of the brand-name version, the analysis finds. FDA recently has received criticism from lawmakers over concerns that a backlog of more than 800 applications for generic medications has led to higher prices for consumers.