The Economics of Generic Drugs

One piece of good news for consumers is that generic prices are falling. However, generic prices may be falling so much that drug shortages are occurring (which is not a good thing). Data from a working paper by Sardella (2023) finds a dramatic drop in generic prices in recent years. The authors claim that shortages…

Office of Generic Drugs 2022 Annual Report

FDA’s Office of Generic Drugs issued their 2022 Annual Report. Generic drugs play a vital role in saving patients and payers money. To give an example, pregabalin capsules cost $450 for a 30-day supply during the end of its market exclusivity period, but priced dropped to $23 (a 95% decrease) during the first 12 months…

Competition in generic drug markets

There is even less competition then we may have thought according to a paper out this month by Socal et al. (2023): We identified a total of 565 facilities producing 1,379 unique generic APIs across forty-two countries. India, China, and Italy were the top producers; 14┬ápercent of APIs were manufactured in the US. About a…

Are generic drug prices too low?

Perhaps the answer is yes, if we want to have a more resilient supply chain. At least that is the argument from a commentary by Mattingly and Conti (2022): Several medications that patients need have been in short supply before and during the COVID-19 pandemic, including low-priced, off-patent generic drugs. The White House recently released…