Your Complete Guide To The Generic Drug Industry

On Monday, embattled drugmaker Mylan NV (MYL – Analyst Report) announced that it will launch a generic version of the EpiPen at a 50% discount to the branded version as the company continues to respond to widespread criticism surrounding the pricing structure of the popular allergy medication.

Mylan’s new generic EpiPen not only offers patients a more affordable treatment option, but it also adds to the company’s massive generics portfolio. Regardless of the recent criticism the company has faced, Mylan’s generics business is one of the largest in a very competitive global industry.

With the spotlight on Mylan and the oftentimes absurd price hikes that have become commonplace in today’s pharmaceutical industry, some attention has to be given to generic drug manufacturers that attempt to offer medications at lower costs to the consumer (also read: Here’s How Drug Companies Justify Massive Price Hikes).

With that said, sometimes it feels like the generic drug industry exists in the shadows, with new options sprouting out from seemingly nowhere and making a major impact on the overall pharmaceuticals market. Today we’ll take a look at how generics are developed and how they affect the drug industry today.

Same Standards

Generic drugs are defined by the U.S. Food and Drug Administration (FDA) as being equivalent to the brand-name product in dosage, strength, route of administration, quality, performance, and intended use. Generics are required to have the same active ingredients as their branded counterparts, although they do not need to contain the same inactive ingredients.

A potential generic drug manufacturer is required to prove that its drug is bioequivalent to the brand name drug. A wide range of bioequivalence data is collected and reviewed by the FDA during the approval process. For instance, after a patient takes the generic drug, they will be tested to see whether the same levels of the drug are found in their bloodstream.