In a small percentage of these settlements, in order to reach agreement (without going to court) about the date that the generic version of the drug can come to market, the brand-name drug
company agrees to pay the generic drug maker a sum of money.
TUESDAY, July 30, 2019 (HealthDay News) -- Three drug companies will pay a total of nearly $70 million to California to settle charges of delaying the sale of generic drugs to keep brand-name drug
prices high, the state's attorney general said Monday.
The provisions would have allowed insurers to remove brand-name drugs
from a formulary midyear when a generic became available or move the drug to a higher tier, and allowed insurers to not count certain drug copayments toward the annual limits if the patient selected a brand-name drug
when a generic was available.
The average cost of a brand-name drug
was 18.6 times higher than its generic equivalent in 2017, and the size of that gap has more than tripled since 2013, according to a report from the AARP Public Policy Institute.
 A generic drug product has the same active ingredient, strength, and dosage form, route of administration, quality, performance characteristics, and intended use as the brand-name drug
. Furthermore, the cost of a generic drug is about 20-80% lower than the brand-name product.
Couple that with the average cost of regular use for one brand-name drug
, which rose to over $5,800, and that brings average annual drug costs to around $26,100.
In some cases, however, a more expensive drug is prescribed when patients are unable to achieve desired effects from the generic drug or another brand-name drug
is found equally effective.
Once the patent on a brand-name drug
expires, generic drugmakers enter the market and can drive down prices by creating competition.
Physicians who considered generics when prescribing a brand-name drug
were more likely to inform patients that it may be exchanged for a cheaper generic, which illustrates how the behavior of the physician may influence the patient to choose a cheaper drug at pharmacy level, making generics more accessible.
In essence, generic drug manufacturers are required to use the same language as in the warning labels of the reference listed drug ("RLD") identified by the FDA (generally, the brand-name drug
In Fulgenzi, the brand-name drug
Reglan received approval from the Food and Drug Administration to add the phrase "Therapy should not exceed 12 weeks in duration" to its label.
The battle between generic and brand-name drug
companies has escalated.