Simple but Salient

  • by: |
  • 04/04/2006

It’s not a “stop-the-presses” moment, in truth it’s kind of a “duh,” but here’s a story that crossed the wires today that speaks to, among other things, the power of the FDA’s bully pulpit.

And here’s to more use of it.

AP — Prescription drug prices soften dramatically even with moderate competition, the Food and Drug Administration said Tuesday in an analysis that shows the arrival in the marketplace of just two generic versions of a brand-name medicine can nearly halve the price consumers pay.

When a brand-name drug faces just one generic competitor, that challenger typically sells for 94 percent of the cost of its branded rival. More competition quickly widens that discount: Once a second generic manufacturer appears, the average price of a generic drug drops to just 52 percent of the brand-name version’s cost per dose, according to the analysis posted on the FDA Web site.

Prices continue to tumble, albeit more slowly but almost without exception, as more manufacturers join the market, the analysis shows. By the time nine manufacturers are producing generic versions of a drug, their products typically sell for just 20 percent of the price of the brand-name medicine, according to the federal analysis of 1999-2004 retail sales data on single—ingredient drug products collected by IMS Health Inc.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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