An Analysis of the Factors Affecting the Production of Generic Drugs

An analysis of the factors affecting the production of generic drugs

Generic drugs are the replicas of original drugs. These can be divided into two categories, authorized and unauthorized. Authorized generic drugs are the medicines which comply with the international code, Trade-Related aspects of Intellectual Property Rights (TRIPS), while the drugs which infringe the patents of brand-name drugs and do not comply with this code are regarded as unauthorized generic drugs. Recent publications by scholars (Ryan, 2009; Kaplan et al., 2012; Gonzalez

et al., 2008; Grabowski et al., 2011) have discussed the advantages and disadvantages of manufacturing authorized and unauthorized generic drugs. This issue is controversial because it involves the interests of a wide range of stakeholders, such as pharmaceutical companies, governments and the general public. Although there are numerous factors involved, opinions on the situation can be divided into four general areas, political, economic, health-related and technological. Those who support manufacture of generic drugs, such as Ford et al. (2007, cited in Kaplan et.al.,2012 , p.215) and Gonzalez et al.(2008), primarily agree with the potential benefits of alleviating the monopoly of branded remedies in the market and providing alternative medicines with lower prices. Those who support the opposite view, however, like Ryan (2009), point out the possible consequences of triggering diplomatic conflicts and a lower incentive of investments in the pharmaceutical development. The purpose of this essay, therefore, is to examine the pros and cons of manufacturing generic drugs from these four aspects, taking a supportive stance on the manufacture of authorized generic drugs and a stance against the production of unauthorized generic drugs.

Sell (1995, 1988, cited in Ryan, 2009, p.1083) notices the favorable policies of developing countries for the production of unauthorized generic drugs. Ryan (1995, cited in Ryan, 2009,...