Why are brand-name drugs more expensive?
Brand-name drugs are generally more expensive than generics because drug makers invest money to support the research, development and marketing of each new medication. They look to recover some of these costs with higher pricing. Because there are no pricing controls, manufacturers can set their own prices on patent-protected drugs. When a patent expires on a brand-name drug, generic manufacturers can produce a generic version. Because generic drug makers are not introducing a new drug, they avoid the expenses of developing it. This is reflected in the lower price.
Brand-name drugs are more expensive than generics because the manufacturers have spent years on research and clinical studies in developing a new medication. As a result, drug manufacturers look to recover some of these research and development costs through drug pricing strategies. Because there are no drug price controls, manufacturers can set the price of their drug at whatever level they want. However, once a patent on a brand-name drug expires, generic manufacturers may produce an equivalent generic drug. Because generic drug manufacturers are not introducing a new drug, they avoid the related expenses associated with developing a new medication, which is reflected in the lower price.
