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Generic Drugs Have Major Impact on Prices: FDA

05 April, 2006

Generic drugs can have a dramatic impact on prescription drug prices, says a U.S. Food and Drug Administration analysis released Tuesday.

For example, the analysis found that the introduction into the marketplace of just two generic versions of a brand-name drug can reduce the cost to consumers by nearly half, the Associated Press reported.

When there's just one generic version, it usually sells for about 94 percent of its brand name rival. However, when there's a second generic version, the average price of the generic drugs decreases to about 52 percent of the brand name medicine.

As more generic versions of the same drug are produced, the price continues to fall. When there are nine generic versions, their average price is about 20 percent of the matching brand name medicine. The analysis is posted on the FDA's Web site, the AP reported.

While the FDA's analysis shows the price reduction benefits of generic drugs, the agency faces ongoing criticism that it's too slow to approve generic drugs. Currently, the FDA has a backlog of about 800 generic drug applications.


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