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JLeslie's avatar

Why don’t drug manufacturers lower their prices to compete with the generic brands?

Asked by JLeslie (65335points) July 27th, 2022 from iPhone

Once the patent is over the drug companies most likely have made back their initial investment and then some. Why don’t they lower their price to compete with generic brands? I understand the original brand might use more expensive ingredients, but even if it were close to the price of the generic a lot of people might opt for it. Would you?

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7 Answers

RayaHope's avatar

That makes perfect sense. Because I think the active ingredients are usually the same stuff in both drugs. They probably just get used to the profits and as long as they are selling them at a higher price that’s fine by them.

JLoon's avatar

Oh but they do – In the BizarroPharma Universe. For the at least the past 6 years big drug companies have been using a jacked up strategy called “authorized generics” that floods the market with fake unbranded versions of their own drugs – at inflated prices.

Here’s an example:
“In 2016, under political and public pressure to lower drug prices, Mylan introduced the authorized generic of EpiPen priced at $300 for a two-pack. That’s half the price of a two-pack of the brand-name version, which has a list price of around $600. But it’s still a staggering hike from EpiPen’s original cost of around $50 per injector in 2007.”
https://arstechnica.com/science/2019/08/big-pharma-is-using-faux-generics-to-keep-drug-prices-high-critics-say/

Blackberry's avatar

Money, keeping up with your community, rising cost of living.

People aren’t joking when they talk about unfettered capitalism and corruption.

We’ve been repeating ourselves since Marx lol.

People should be rewarded for innovation, though, right? Having a lot of money and influence makes innovation worth it if you have a weak ego and soul.

Lightlyseared's avatar

Because advertising works.

JLeslie's avatar

@JLoon I completely forgot about that! I was aware of this practice. Crap! The drug business is such a racket. Thank you for your answer.

@Blackberry Does the advertising work? Most insurance companies force people into generics. The patients have to demand the brand, and most people I know talk in terms of the chemical name of their medication, which to me is a big change in the last 20 years.

ragingloli's avatar

You might as well ask “Why make more money, when you could make less?”
To maximise your market share, you could either:
– lower your prices, so that people choose your brand over others.
Or
– bribe doctors/hospitals/insurace agencies to use your brand exclusively
– lobby lawmakers to suppress generic competitors
– oversaturate the media with advertisements so that customers will be aware of only your brand, and consider generic brands as being inferior.

The latter option is clearly more profitable.

JLeslie's avatar

@ragingloli The latter, I don’t see this happening so much. Once drugs go generic I don’t usually see a lot of advertising, but maybe my awareness isn’t there.

Maybe some jellies can point out some products where this is happening. Maybe it just isn’t happening in medications I’m more familiar with.

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