Why the Price Difference?

When a pharmaceutical company formulates a new drug, it patents it before bringing it to market. It is their right too, as they use their research and development resources to find a particular formula for a medicine. Hence, the company tries to recover its costs on the years of research through sales of the medicine, enjoying exclusivity in the market until its patent expires.

When the patent expires, other drug companies can start selling a generic version of the drug after due approval of the regulatory authority. Since generic drugmakers do not develop a drug from scratch, the costs to bring the drug to market are less; therefore, generic drugs are usually less expensive than branded or patented drugs. For example, one of the common medicines across Indian households is Crocin. In fact, the brand Crocin itself sounds like a medicine though it is a brand name. The generic form of Crocin is paracetamol or acetaminophen. When Crocin’s patent expired, its much cheaper yet equally effective generics thronged the shelves of pharmaceutical stores across the country. From an affordability perspective, availability of more generics makes a difference to healthcare costs for consumers.