Why Generic Drugs are cheaper then Branded Drugs ?

Generic drugs are cheaper than branded (innovator) drugs because of several scientific, regulatory, and economic reasons — not because they are inferior in quality.

1️⃣ No Research & Development (R&D) Cost

• Branded drugs spend years and crores of rupees on:

  • Drug discovery

  • Animal studies

  • Clinical trials (Phase I–III)

• Generic manufacturers do not repeat these costly trials.
  They only prove bioequivalence with the branded drug.

👉 No R&D cost = lower price

2️⃣ Patent Expiry

• Branded drugs enjoy patent protection for ~20 years

• After patent expiry, multiple companies can manufacture the same drug

👉 More manufacturers = competition = price reduction

3️⃣ Lower Marketing & Promotion Cost

• Branded companies spend heavily on:

  • Medical representatives

  • Doctor sponsorships

  • Advertisements

• Generic drugs have minimal or no promotion

👉 Less marketing = cheaper medicine

4️⃣ Same Active Ingredient, Same Effect

• Generics contain the same API (Active Pharmaceutical Ingredient)

• Same:

  • Strength

  • Dosage form

  • Route of administration

• Approved only after bioequivalence studies

👉 Same efficacy & safety at lower cost

5️⃣ Price Control Policies (India)

• Many generic drugs fall under DPCO (Drug Price Control Order)

• Government regulates their maximum selling price (MSP)

👉 Controlled pricing = affordability

6️⃣ Bulk Production & Simpler Packaging

• Generics are often produced in large quantities

• Packaging is simple (no fancy branding)

👉 Reduced production cost

🔍 Common Myth

❌ Generic drugs are low quality
✅ FALSE — They must meet the same regulatory standards (CDSCO/USFDA/WHO-GMP)

📌 One-Line Summary (Perfect for exams & shorts)

Generic drugs are cheaper because they avoid R&D costs, face high market competition, spend less on marketing, and are often price-controlled — while offering the same therapeutic effect as branded drugs.