Generic Drugs

For additional information on this topic please see our article "Branded" Generic Drugs".

Please also see our article "Patents and the Possibility of Generic Biologic Drugs"- Part III of a III Part Series

(3/4/20)- Novartis AG’s subsidiary Sandoz will pay a $195 million criminal penalty for fixing prices on generic drugs, according to an announcement from the Justice Department. Sandoz admitted it was guilty of participating in several conspiracies to rig bids and fix prices for several generic drugs.

Sandoz entered into a deferred prosecution agreement under which the four felony counts against Sandoz will be dropped after three years if it lives up top its commitments to the Justice department

(1/24/20)- The Blue Cross Blue Shield Association and 18 of its member organizations announced that ithey would invest $55 million in conjunction with Civica Rx, a non-profit organization, in an effort to sell generic drugs that were in short supply so that the cost could be reduced.. Civica placed a full-page ad in the New York Times on Thursday announcing its undertaking off the endeavor.

The joint effort hopes to have products on the market by 2020. Under the plan, Civica would create a subsidiary that would either make the generic drug itself, or contract with existing manufacturers

(5/24/16)- As we noted in our item dated 4/1/15 the Food and Drug Administration (FDA) began hearings on the question of the drug labeling by generic drug companies for their medications when they have data that indicates the possibility of adverse drug reactions to a medication.

The Supreme Court ruled in 2011 in the case of Pliva v. Mensing that generic drug companies could not be held liable for failing to warn users of their drugs about the risks of the medication since present rules do not allow them to change the label.

Brand name drug companies have the responsibility to change a label whenever it gets information about their drug’s adverse reactions. Once the brand name drug company puts a warning on a drug’s label it is up to the generic drug company to follow suit on its label.

The FDA proposed changing the rules to “create parity” between generic and brand name drug companies as to how they update their labels, but the agency has not finalized these rules.

In its latest announcement on this issue, the FDA said it would postpone until 2017 a decision on this matter.

(2/15/16)- A recent article that appeared in the NY Times, written by Katie Thomas, entitled “Web Companies Are Pulling Back The Curtain on the Prices of Drugs” highlighted two new companies that compare the cost of various generic drugs at different pharmacies.

Most pharmacies do not list the price of the drugs they sell. Incidentally, the same is true for doctors’ and dental offices.

The online comparison companies mentioned in the article  are GoodRx and Blink Health. Good Rx collects generic drug data from pharmacies around the country and connects the user to coupons that could be used to get a discount on the drug.

Blink Health not only collects the data on the cost of different generic drugs but also allows you to pay for it, and then pick the drug up at the pharmacy.

Data compiled by the drug research firm IMS Health show that generic drugs now account for nearly 90% of the total number of prescriptions filled at pharmacies in the U.S.

(4/1/15)- As we noted in our item dated 9/15/14 below, the Food and Drug Administration (FDA)is holding public hearing for comments on changing current rules that do not require generic drug companies to change the labels on their drugs, even if they have data showing that consumers may suffer adverse reactions to their medication.

This issue had arisen because of a 2011 decision by “the U.S. Supreme Court that ruled, in Pliva Inc. vs. Mensing, No. 09-993 that a generic drug company could not be sued, even it had reason to believe that a drug was unsafe under certain conditions, as long as its label matched that of the brand-name drug’s label..

Under current rules, generic drug companies are not allowed to update a drug’s labelling unless the FDA orders them to do so. The FDA proposed a rule in 2013 that gave the generic drug manufacturers the same control over their labels as the patent holding drug companies have.

The public-comment period for the proposed new rules has been extended to April 27.

At last count, there were about 3,500 generic drug applications before the Food and Drug Administration (FDA).

(12/29/14)- The verdict in a recent court case that involved a brand-name drug company paying a generic drug company to delay the introduction of its competing drug did not conclusively decide thepay-to-play issue. The Supreme Court that had ruled last year that this type of deal should face closer antitrust examination was just a generalization, but did not establish clear-cut rules on this matter.

The Justice Department brought a case against AstraZeneca PLC and Ranbaxy Laboratories Ltd in federal court in Boston because of a deal between those two companies whereby Astra agreed not to sell an authorized generic version of its drug Nexium until May 2014 even though its patent for the drug had expired. Ranbaxy, which had the right to begin selling its generic version of the drug would not begin selling it until after May 2014.

The jury in this case ruled that there was no harm done because Ranbaxy had manufacturing problems that prompted the FDA to ban products made by the company at certain of its plants that the agency had found to be unsafe.

(12/7/14)- A recent report issued by the Centers for Medicare and Medicaid Services (CMS), that was published in the journal Health Affairs said that the share of prescriptions filled with generic drugs climbed to 80% in 2013, up from 73% in 2011. Micah B. Hartman, a statistician with the CMS, was the lead author of the study.

(11/27/14)- The Senate Subcommittee on Primary Health and Aging, which is chaired by Senator Bernard Sanders (Ind.-Vt) is currently holding hearings on why generic drug cost are soaring. Senators Amy Kornbuchar and John McCain are separately introducing legislation to allow some prescription drugs to be imported from Canada. For more information on this issue, please see out item: “Crossing the Border to Buy Prescription Drugs”

The law allowing its residents to purchase prescription drugs from licensed pharmacies in Canada, Britain, Australia and New Zealand was passed last fall, but it is being legally challenged by some state pharmacies, and the lobbying arm of the drug industry, The Pharmaceutical Research and manufacturers of America, has been very vocal in opposing the law.

(11/15/14)- Why are the prices of generic drugs increasing such large percentages? The writer of this item used to pay $1.80 for a 90-day supply of hydrochlorothiazide (HZT-a diuretic), under my employer’s drug coverage plan. Earlier this month, it cost me $4.80 for the 90-day supply.

As of early last month, there were 3,552 applications waiting before the FDA to be processed as opposed to the 1,359 in October 2013.

(9/15/14)- As we noted in our item dated 11/11/13 below, the Food and Drug Administration was considering changes in the labels for generic drugs when the producer becomes aware that new information questions the safety of these drugs.

This issue had arisen because of a 2011 decision by “the U.S. Supreme Court that ruled, in Pliva Inc. vs. Mensing, No. 09-993 that a generic drug company could not be sued, even it had reason to believe that a drug was unsafe under certain conditions, when its  label matched that of the brand-name drug’s label”.

A case now before the Supreme Court is asking for a review of that decision that permitted generic drug manufacturers to avoid responsibility for the adverse side effects of a generic drug, when the manufacturer was aware of the risks involved in taking that medication. Generic drug companies have argued that federal law precludes them from changing the labels on a medication from what the FDA had approved for that drug.

The case involves Olga Pikerie, a California resident who had been prescribed a generic version of Fosamax (Merck & Co.) to treat her osteoporosis. The label for Fosamax was changed in 2010 and 2011 to warn about the risk of femur fractures. Changes to the generic version of the drug were made to the labels within 6 weeks of the brand name updated labels.

Ms. Pikerie suffered a femur fracture in April 2011. Teva Pharmaceutical and Caraco Pharnaceutical, a unit of Sun Pharmaceutical manufactured the generic version of the drug. A California appeals court ruled against the generic drug companies, saying her claims were permitted under state law.

(7/11/14)- The price rise for branded name drugs continues to increase at a pace far in excess of the yearly rise in inflation, but now it seems as if the price of generic drugs is also increasing at a rate also that is far in excess of the rise in inflation.

As an example of the increase in the cost of generic drugs is shown by what has happened with the rise in the price of digoxin, one of the most commonly used and oldest of the heart medications. With only 3 companies producing digoxin, the price they charge pharmacies has doubled since late last year, according to EvaluatePharma, a London based consulting company.

Two of the generic drug companies that produce digoxin are the Lannett Company and Global Pharmaceuticals, a division of Impax Laboratories. The third company that produces the drug is the Swiss manufacturer Covis, which began producing an “authorized generic” version of the drug in January.

GlaxoSmithKline, the British drug company held the original patent for the drug. “Authorized generic” or “branded generic” are exact copies of the original drug. The price of the “authorized generic” was about $1.10 per pill, versus about 40 cents for the other two regular generic versions of the drug, which was about double what it had been 6 months prior to this new version entering the market.

The Federal Trade Commission has been investigating anticompetitive practices in the generic drug industry, but has not disclosed its findings yet.

(1/11/14)- A report issued by the Centers for Medicare and Medicaid Services concluded that almost three-fourths of all prescriptions filled in 2012 cost $10 or less per prescription. Anne B. Martin, an economist was the principal author of the report.

Generic drugs accounted for 77% of all prescriptions filled in 2012, up from about 70% in 2011.

(11/11/13)- In 2011 the U.S. Supreme Court ruled, in Pliva Inc. vs. Mensing, No. 09-993 that a generic drug company could not be sued, even it had reason to believe that a drug was unsafe, when its drug’s label matched that of the brand-name drug’s label. The Food and Drug Administration announced a proposed ruling that, if adopted, will change that injustice.

The proposed ruling would permit generic drug companies to update a drug’s label if it receives information about potential safety problems with a medication. Until now, only brand-name pharmaceutical companies had the ability to independently update a drug’s label if new information arises as to the safety of a drug.

If the FDA agreed that the new data warranted a change in the label, then generic drug companies would be required to update the label. It is estimated that more than 80% of prescriptions in the U.S. are currently dispensed as generic drugs.

If the proposed rule is adopted by the FDA, it will be a whole new ballgame for generic drug companies being sued for unsafe products that they had become aware of.

(6/29/13)- The Supreme Court ruled this week that a generic drug company could not be sued for the defective design of a drug that had been approved by the Food and Drug Administration (FDA).

In our item dated 12/26/12 below we discussed the background for the case Mutual Pharmaceutical Co. v. Bartlett. Mutual subsequently became a subsidiary of Sun Pharmaceutical of India.

The 5-4 decision overturned the verdict, which awarded $21 million to Ms. Bartlett, who developed a disastrous skin disease after taking a generic version of the pain medication sulindac.

The court ruled that Mutual Pharmaceutical was required by federal law to make a copy of the band-name drug Clinori, and that it could not be held liable for claims that the drug was unsafe.

Generic drug companies now have a responsibility to mirror the safety label of the brand name drug, but should alert the FDA whenever it becomes aware of an adverse event related to their product. It is then up to the FDA to decide whether or not to change the label.

(3/17/13)- In our item dated 3/29/12 below we wrote: " In our item date 7/7/11 we wrote: ' The U.S. Supreme Court, by a 5-4 vote, reversed the decision of the lower court in the Pliva Inc. vs. Mensing, No. 09-993, a case that we discussed in our item dated 4/4/11. 'Generic drug companies can not change the label for the drug as written by the branded name drug company, and therefore can not be held liable if the drug in question harms the user."

In our item dated 12/26/12 below, we wrote about how the U.S. Supreme Court has agreed to consider the appeal by Mutual Pharmaceutical Co. in a suit brought by Karen L.Bartlett. Ms. Bartlett's suit is based on the theory that a generic drug company has a legal obligation to cease selling a "defective product", even if it has been approved by the FDA.

The U.S. government supported the position of Mutual in this matter, arguing in its brief that sulindac was a safe product when it was approved by the FDA and is a safe product today. It is only the rare exception that caused Ms. Bartlett's disastrous condition of developing Sevens-Johnson Syndrome.

It boils down to a question of "sovereignty", or can a state override the authority of a federal agency's decision.

(12/26/12)- The U.S. Supreme Court has agreed to hear a case that deals with the issue of suing a generic drug company over the label used that conforms to the one approved by the Food and Drug Administration. For additional info on this issue, please see our item dated 3/29/12 below.

The current case involves a New Hampshire resident Karen L.Bartlett's claim that the generic-drug sulindac was unreasonably dangerous and thus designed defectively. She won the case in the lower court and was awarded $21 million in a judgment against Takeda Pharmaceutical Co., a subsidiary of Mutual Pharmaceutical Co.

Mutual appealed the case to the First U.S. Circuit Court of Appeals in Boston, which ruled that her claim was not preempted by federal drug regulations. Mutual claims that a generic drug company has no option but to use the label for usage as approved by the FDA.

Oral arguments in Mutual Pharmaceutical Co. v. Bartlett will be heard in March.

(12/18/12)- Brand-name drug prices increased roughly 13% from 2011 to 2012 , which is a rate more than six times the price inflation of consumer goods, according to the New York Times. Meanwhile, the price of generic drugs dropped nearly 22% in the same period, creating the biggest gap yet between brand-name and generic drugs.

(4/24/12)- Democrats in both the House and Senate have introduced companion legislation that would permit generic drug companies to update warning labels, so that in case something goes amiss, users of generic drugs could sue the manufacturers, just as they can sue the producers of brand name drugs.

The proposed legislation is aimed at correcting the situation created by the U.S. Supreme Court's ruling in the case of Pliva Inc. vs Mensing, that we discussed in our item dated 3/29/12 below.

Senator Patrick J. Leahy of Vermont who sponsored the legislation along with 6 other Democratic senators stated: "If a consumer takes the brand-name version of a drug, she can sue the manufacturer for inadequate warnings. If the pharmacy happens to give her the generic version, she will not be able to seek compensation for her injuries."

Two Democrats in the House, Chris Van Hollen of Maryland and Bruce Braley of Iowa, introduced an identical bill, but it is unlikely that the legislation will pass the Republican controlled House.

(3/29/12)- In our item date 7/7/11 we wrote: " The U.S. Supreme Court, by a 5-4 vote, reversed the decision of the lower court in the Pliva Inc. vs. Mensing, No. 09-993 case that we discussed in our item dated 4/4/11. Generic drug companies can not change the label for the drug as written by the branded name drug company, and therefore can not be held liable if the drug in question harms the user."

In our item dated 4/4/11 we wrote: " In the case of Wyeth vs. Levine, the court ruled that makers of brand-name drugs could be sued under state law for failure to warn consumers about the risks associated with a particular drug. The court relied heavily on the fact that brand-name drug companies can sometimes change the labels on their products without permission from the FDA."

A recent article in the N.Y. Times, written by Katie Thomas, entitled "Generic Drugs Prove Resistant to Damage Suit", the author discusses the seemingly incongruity between the result from being harmed by a brand name drug versus being damaged by the generic version of the same drug.

"More than 40 judges have dismissed cases against generic manufacturers since the Supreme Court ruled last June, including some who dismissed dozens of cases consolidated under one judge" was one of the comments in Ms. Thomas' article.

She went on to write about the fact that Public Citizens, a consumer advocacy group having petitioned the Food and Drug Administration to allow generic drug companies to have greater control over the labeling of their drugs, but that the agency has postponed any decision on this matter. If the generic drug company could have greater control over the labeling of their drugs, they would therefore have a measure of liability similar to what the brand name drug companies are now subjected to.

(9/9/11)- Ralph G. Neas has been named the new chief executive of the Generic Pharmaceutical Association, a Washington-based industry group representing generic drug makers and suppliers.

Mr. Neas, 65, is best known for leading the fight against President Ronald Reagan's nomination of Judge Robert H. Bork to the Supreme Court. He was a past executive director of the Leadership Conference on Civil Rights for more than a dozen years, and he also served as president and chief executive for People for the American Way until a few years ago.

His last position was as the chief executive of the National Coalition on Health Care, a group with broad support from business, unions and others.

Mr. Neas succeeds Kathleen Jaeger, who left the association last year.

(8/18/11)- It now appears likely that an agreement that was reached between the federal government and the generic drug industry will lead to periodic routine inspections of overseas drug ingredient plants. The agreement has to be approved by Congress but most political experts think that the legislation will be forthcoming.

Under the landmark agreement, the generic drug industry would pay $299 million in annual fees to underwrite the cost of the inspections of foreign manufacturing plants every two years, the same frequency required of domestic plants.

The agreement will not affect the manufacturing of over-the-counter drugs or vitamins. Aspirins and vitamin C supplements for example are now made almost entirely in uninspected plants in China.

The funding will also be used to expedite the approval time for generic drugs since it now takes about 31 months for the agency to approve a generic drug. There are now 2,458 applications awaiting approval, up from 2,361 at the end of last year. The new funding is expected to bring the approval time down to 10months.

The generic drug fees will be included in a package of fees for the branded drug industry, as well as the medical device industry that is expected to be presented to Congress by the Obama administration in early January.

The funding legislation must pass before October 2012, or numerous FDA functions will halt.

(7/7/11)- The U.S. Supreme Court, by a 5-4 vote, reversed the decision of the lower court in the Pliva Inc. vs. Mensing, No. 09-993 case that we discussed in our item dated 4/4/11. Generic drug companies can not change the label for the drug as written by the branded name drug company, and therefore can not be held liable if the drug in question harms the user.

Brand name drug companies can be sued under state law for failing to update a drug's label when its adverse affects become known after the FDA approves its usage. Under the Pliva ruling, generic drug companies can't be sued for failing to change a drug's label, even though it may have become aware of negative side effects from usage of the drug.

The drug in question was metoclopramide, a drug used to treat digestive tract problems like reflux and originally sold after its 1980 approval under the brand name of Reglan. Evidence showed that the drug's long term usage caused tardive disorder that is characterized by repetitive and involuntary movements.

(4/4/11)- The Supreme Court recently heard oral arguments in 3 consolidated cases involving the question as to whether or not generic drug makers can be sued in state courts for failure to warn users of their products as to the negative side effects, even though the Food and Drug Administration (FDA) has approved the label for the drug.

Generic drug makers are not allowed to change the particulars contained in the drug label that has been approved by the FDA.

A generic drugs must be the "bio-equivalent" of its brand-name drug.

In the three consolidated cases that were heard by the court, including Pliva Inc. vs. Mensing, No. 09-993, women who took the generic equivalent of Reglan for stomach ailments developed a serious neurological disorder. The lower appeals court ruled against the generic drug manufacturer, saying that the federal regulatory regime did not block claims under the state law.

In arguing for the generic drug company, Jay P. Lefkowitz said: "Generics can't simultaneously comply with a federal duty to be the same and a state duty to be different."

(2/24/11)- With the brand name drug companies facing the loss of patent protection within the next 2 years of 5 blockbuster drug patents, the generic drug industry now strongly supports the payment by its industry of user fees system to be used to speed up the approval of generic drugs and generic plant inspections similar to what already exists for the brand name drug industry.

The generic drug industry estimates that it now takes about 2 1/2 years on average to gain FDA approval to sell their drugs. Negotiations between the industry and the Food and Drug Administration are scheduled to begin on February 28.

Generic drugs accounted for about 75% of all prescription medications sold in this country in 2010.

According to figures from the FDA, U.S. drug plants are inspected about every two years after they have been certified, while foreign facilities are not inspected for much longer periods of time. The latest figures from the FDA show that about 40% of the drugs in the U.S. are imported.

A government report in 2010 stated that about 64% of the 3,700 foreign drug facilities may never have been inspected by the agency. The Obama administration has supported user fees for generic drugs, as shown by the fact that his proposed budget included $40 million in anticipated revenue from such fees in 2012.

(4/22/10)- For the second time within a year, the U.S. Food and Drug Administration (FDA) sent a warning letter to Apotex Inc., Canada's biggest drug company concerning safety violations at its manufacturing plant in Toronto. The earlier violations had occurred at the company's manufacturing facility in Etiobicoke, Ontario in 2008.

Apotex is the eighth-largest provider of generics in this country with sales last year of $879 million, according to IMS Health, the drug-data firm. The letter also said the company had failed t notify regulators in a timely fashion about the problems.

In 2009, Apotex filled 94 million prescriptions in the U.S., according to IMS. Generic drugs account for 75% of the total prescriptions filled in this country in 2009.

According to the law, it is illegal to bring Canadian drugs into this country even if it is for your own use. Whenever legislation has been introduced in Congress to allow the importation of Canadian drugs into the country, opponents have used the safety of foreign drugs to defeat passage of the law.

(9/23/08)- The U.S. Food and Drug Administration banned imports of more than 30 generic drugs made by Ranbaxy Laboratories Ltd., of India, because of concerns about the "seriousness and extent" of violations at two Ranbaxy plants in India. Consumers will not be affected by the bans because the drugs can be supplied by other generic drug makers, with the exception of the company's AIDS drug called Ganciclovir for which the company is the sole supplier in the United States.

Ranbaxy is the largest generic drug manufacturer in India with worldwide sales of $1.62 billion in 2007, of which $400 million took place in the U.S. The Japanese drug company Daiichi Sankyo Co., is in the process of taking over Ranbaxy in a $4.6 billion deal that is awaiting Indian governmental approval.

Ranbaxy is presently under investigation by the U.S. Justice Department for allegations of improperly manufacturing HIV drugs that were given to thousands of AIDS patients in Africa.

It is unclear whether the ban might affect Ranbaxy's six-month exclusivity deal to produce Lipitor, Pfizer Inc.'s blockbuster cholesterol drug that comes off patent protection in 2011

Indian pharmaceutical exports are projected to hit $10 billion this year, up from $1.9 billion in 1999, according to Global Trade Information Systems, a U. S. supplier of international trade data, and IDFC-SKKI Securities, a Mumbai brokerage firm.

(5/2/08)- Melinda Beck wrote a recent article in the Health Journal column of the Wall St Journal entitled "Inexact Copies: How Generics Differ From Brand Names"

In the article Ms. Beck discusses the fact the human body may have different reactions to generic drugs from their reaction to brand name drugs. A main part of the article discussed what has what happened after Wellbutrin, the antidepressant drug made by Biovail Corp. of Canada, and marketed by GalxoSmithKline PLC of England, the generic version of this drug, named Budeprion XL 300 came onto the market. Budeprion XL is distributed by Teva Pharmaceuticals USA, the American subsidiary of the Israeli generic drug company Teva Pharmaceuticals.

The FDA approved a Budeprion XL in December 2006, and the drug immediately impacted the sales of Wellbutrin. The article pointed out, "But patients soon started logging complaints about Budeprion at PeoplesPharmacy,com, a Web site that has become a clearing house for medication gripes."

Joe Graedon, a pharmacist who runs People's Pharmacy with his wife alerted the FDA and also asked to run a test on Budeprion. Consumer Labs found that Budeprion dissoves faster, releasing 34% of the drug within the first two hours, compared with 8% for Wellbutrin.

Generics must have the same bioequivalency as the brand name drug, and thus they avoid the strenuous testing requirements that the FDA imposes before it will approve a drug for usage in the market. According to FDA guidelines the generic can produce blood levels as much as 20% below or 25% above the branded drug.

According to data from the Generic Pharmaceutical Association, a trade group for the generic drug industry, about 65% of all prescription drugs dispensed are for generic versions of the drugs.

The FDA conducted an investigation of the Wellbutrin matter and found that there was only "small differences" between it and the generic drug. Critics of the FDA report however said that the FDA relied on tests comparing a lower dosage of Wellbutrin and Budaprion- 150 mg-when it first approved the 300 mg version in 2006. The agency therefore did not have specific bioequivalence data on the 300- mg dose that had generated the complaints.

Bioequivalence tests are conducted on healthy people, not those who need the medication, according to FDA officials. 


Allan Rubin
updated March 4, 2020

To e-mail: or

Return to Home