Public skepticism exists about generic drugs. However, not everyone understands what these drugs are. Generic medicines are those whose patents on the active ingredient have expired. A major characteristic of these drugs is that they are sold at relatively lower prices as compared to the already established branded drugs. In the U.S., in all with the exception of a few cases, the responsibility of certifying generics lies with the Food and Drug Administration (FDA). The responsibility of the FDA is based on the generics’ ability to serve as perfect substitutes to the branded drugs as their active ingredient is usually identical. Generic drugs are also bioequivalent in that they are statistically indistinguishable from the established or branded product in key areas such as therapeutic use. However, variations between generic and branded drugs can exist in terms of color, shape, labeling, and packaging. In the U.S., generics are a critical component of the healthcare system, accounting for almost 90 percent of all U.S. prescriptions that are dispensed.Desai et al. 2019 indicate that there is improved adherence with generic drugs compared to brand-name drugs with this being attributed to price. Generics go through a rigorous approval process carried out by the U.S. FDA; hence, the existing public skepticism lacks basis. It is believed that much of the public skepticism is based on a biased perception of generics linked to the lack of generic drug promotion, lower cost, and generally a different look and feel of the drugs. These issues and concerns surrounding generic drugs serve as grounds for studying this topic.
Currently, gaps exist in literature on the topic due to the lack of knowledge or understanding of what generic drugs are or their purpose. Thus, the research seeks to explore how drugs impact the healthcare sector.
This proposal entails a statement of purpose of the study indicating why this particular study was chosen. It also includes a review of literature exploring the topic.
There is public skepticism about generic drugs, even though not everyone understands what these drugs are. It is believed that much of the public skepticism is based on a biased perception of generics linked to the lack of generic drug promotion, lower cost, and generally a different look and feel of the drugs. To make matters worse, there is limited research on the outcomes of generic drug use in the global healthcare sector. Generally, care providers and patients believe that generic medicine is not only less effective but also less safe as compared to brand-name drugs. As a result, observational studies comparing outcomes of generic drugs and brand-name drugs have been subjected to bias in favor of the latter. This study seeks to explore the overall generic drugs in the healthcare sector. It seeks to answer the research question: what is the impact of generic drugs on the healthcare sector?
Generic drugs are critical components of the healthcare system, and they account for about 90 percent of prescriptions dispensed in the U.S. alone. They contain equivalent amounts of the same active ingredients as brand-name drugs. The difference is that generic drugs cost far less as compared to brand-name drugs. There are different perceptions of whether generic drugs should be accepted across the global healthcare sector. Generic drugs have significant impacts on the global healthcare sector, particularly when it comes to the reduction of healthcare costs. A number of studies and literature explore the impact of these drugs on the healthcare sector, and some of these are examined in this literature review. The review is done under three themes in line with the research question. The first theme deals with the definition and description of generic drugs. The second theme is about the effectiveness of generic drugs. The third theme focuses on the impact of generic drugs on the healthcare sector.
Generic drugs refer to medicine whose patents on the active ingredients have expired. A major characteristic of the drugs is that they are sold at a lower price as compared to established and branded drugs (Ferrándiz 1999, 599). In most cases in the U.S. context, it is the responsibility of the Food and Drug Administration (FDA) to certify generic drugs and ensure that they are perfect substitutes for brand-name drugs in that their active ingredient is identical (Ferrándiz 1999, p. 599). These drugs are believed to be bioequivalent in that they are statistically indistinguishable from the established products in major areas such as therapeutic use. However, there could be variation between these drugs and their branded-name counterparts in terms of shape, packaging, color, and labeling. Generics are a critical component of the healthcare system, particularly in the U.S., where they account for almost 90 percent of all prescriptions that are dispensed (Desai et al. 2019, 3). Desai et al. 2009 demonstrate improved adherence with generic drugs compared to brand-name drugs, which can be attributed to price. Generally, patients and care providers believe that generics are less effective and less safe as compared to brand-name drugs (Desai et al. 2019, 3). In America, there have been concerns among some patients about how effective these drugs are when it comes to treating serious illnesses. The definition of the term “generic drug” varies from one market to another. However, the World Health Organization has come up with a common definition of the term. The WHO argues that a generic drug is a pharmaceutical drug that is usually intended to be interchangeable with an innovator product; is manufactured without a license being provided by the innovator company; and is marketed after the patent's expiry date or after the expiry of other exclusive rights (Dunne 2013, 2). For approval, FDA requires that generic drugs meet a number of conditions, including containing the same active ingredient as the originator medicine; being identical in strength, dosage form, and route of administration; having the same use indications; being bioequivalent; meeting the same batch requirements for identity, strength, purity, and quality; as well as being manufactured under the same strict standards of FDA’s good manufacturing practice regulations required for originator products.
Desai et al. 2019 compared the effectiveness of brand-name versus generic products and found equivalent or better clinical outcomes among patients who used generic drugs. Many patients with psychiatric conditions often shun generic drugs for brand name drugs. A valid explanation for this perspective is the residual confounding or generic perception bias. In as much as generics have been proven effective and their use has increased rapidly in the past two decades, recent national surveys indicate that about one-third of physicians, pharmacists, and patients are still classified as skeptics in the perception of the safety, quality, and effectiveness of generics (Alatawi et al. 2017, 3). Such biased or negative perceptions among individuals usually lead to patients switching back to brand-name products after generic substitution (Desai et al. 2019,12). Switching back to brand-name products after a brand-name to generic drug switch is prevalent. The decision by many people to switch back to brand-name drugs despite the availability of less expensive generic drugs can lead to an increase in unnecessary costs for patients and the healthcare system as a whole. In the U.S., for instance, the use of generic has been effective since the U.S. has saved approximately $1 trillion over the last decade (Desai et al. 2019, 14). Investigations on comparative effectiveness suggest broadly equivalent clinical outcomes with the use of generics and brand-name products for serious conditions such as hypertension, diabetes, depression, anxiety, as well as osteoporosis (Alatawi et al. 2017, 6). The equivalent clinical outcomes with the use of generics and brand-name drugs point to how effective generics are in the healthcare sector just as brand-name drugs are.
The use of generic drugs is hampered by public skepticism that exists about the drugs. Mush of the public skepticism is attributed to a biased perception of generics linked to factors such as the lack of generic product promotion, lower cost, and the fact that people have a different look and feel of generics compared with brand-name drugs (Alatawi et al. 2017,2). A significant impact of generics on the healthcare sector is that they reduce health care costs. As a result, both payers and providers recommend their use (Alatawi et al. 2017, 5). The fact that generics lessen health care costs has spurred growth in their market to more than 80 percent of the drug market. Efforts are underway to ensure that attention is paid to monitoring the safety and efficacy of generics as well as promoting public confidence in the use of these drugs. Moreover, generic drugs account for the majority of dispensed prescriptions for drugs in the U.S. thus; patients have an alternative other than brand-name drugs (Alatawi et al. 2017,6). With this in mind, incidences of shortages of brand-name drugs cannot adversely impact patients.The use of generic drugs has increased around the world in the past decade. In 2015, for instance, the global percentage of the use of generic drugs was found to be high, ranging between 60 and 90 percent. However, high generic drug use is not witnessed in all countries. For example, Japan has a significantly low percentage of generic drug use at 54.6 percent (Tachi et al. 2018, 1). This has adversely impacted the Japanese society as medical costs have continued to augment with the increase in age. In 2015, the national cost of medical care in Japan was reported at 4.1 billion yen. This amount has put significant pressure on Japan’s national health care financing. Japan’s Ministry of Health, Labor, and Welfare drew a plan pushing for the use of genericsto solve this challenge (Tachi et al. 2018, 1). Part of the plan was to increase the numerical share of generic drugs in the country to at least 60 percent of all drugs as of March 2018. The bottom line is that greater use of generics in any given country results in a greater reduction in drug prices (Tachi et al. 2018, 7). The low drug prices translate to a reduction in the overall cost of health care, thus answering the question of the impact of generic drugs on the healthcare sector.
In recent years, the cost of prescription drugs has accounted for an increasingly large percentage of health care costs. As a result, governments and other third-party payers have been forced to focus on the problem. The support of stakeholders such as governments and other third-party payers has facilitated the ability of manufacturers of generic drugs to bring generic versions of prospection drugs to the global market (Pitt 2004, 10). One of the positives of this move is that delaying tactics that were previously used by manufacturers of prescription drugs have become limited. However, the pressure to further facilitate and push for the availability of generic is likely to increase in the coming years with the expectation that some form of prescription drug benefits will become part of Medicare. A significant impact of the initiative is that health care costs will be reduced, and significant attention will be paid to the maintenance of quality care across health care settings. The achievement of these objectives depends on various factors that must be addressed. It will be important for stakeholders, especially the government, to deal with the possible misuse or underuse of generic drugs that could arise. There will also be a need for stakeholders to address the issues of the lack of patent protection that may hamper efforts to use generics in place of brand-name drugs that result in increased health care costs.On July 9, 2012, Generic Drug User Fee Amendments of 2012 (GDUFA) was enacted in the U.S. to allow timely access to safe, affordable, and high-quality generic drugs (Howard 2018, 619). The policies pushed for increased use of generic drugs, thus making a significant contribution to increasing the availability of affordable prescription drugs. The success of the policies and maximizing the use of generic drugs depend on the public’s positive perception and meeting their information needs about generic drugs (Howard 2018, 620). Generally, generic drugs play an important role in cost containment and patient outcomes, thus underlying their impact on the healthcare sector as asked by the research question.
Saleh et al. 2017 argue that one of the pivotal components of all healthcare systems is ensuring patients' prompt and convenient access to effective and reasonably priced medications. Unfortunately, health care systems around the world face a high economic burden that is caused by increasing pharmaceutical expenses. Many governments have been forced to consider initiatives that minimize the said expenditures, with the leading initiative being the generic drug substitution (Saleh 2017,1101). Initiatives that promote the use of generic drugs tend to serve as long-term regulations of the healthcare expenditures that are allocated to pharmaceuticals(Howard 2018). A major impact of the policy of generic drugs is the decrease in the growth rate of pharmaceutical expenditures. This perspective thus answers the research question on the impact of generic drugs on the healthcare sector.
Generic drugs are undoubtedly critical components of the healthcare system, accounting for about 90 percent of prescriptions dispensed in the U.S. alone. In the past decade, the use of generics increased as stakeholders such as government and other third-party payers sought to reduce healthcare costs. Generic drugs contain equivalent amounts of the same active ingredients as the brand-name drug. The difference is that generic drugs cost far less as compared to brand-name drugs. There are different perceptions of whether generic drugs should be accepted across the global healthcare sector. In the U.S., public skepticism exists about generics. Generic drugs have significant impacts on the global healthcare sector, particularly when it comes to the reduction of medical costs.This study seeks to explore the overall impact of generic drugs in the healthcare sector. It seeks to answer the research question: what is the impact of generic drugs on the healthcare sector?
Research design is defined as the researcher's plan for the selection of various sources and information that help in answering the research question. The research design serves as a framework used by the researcher to specify relationships existing between variables. It also enables the researcher to give an outline for every procedure undertaken from the hypothesis to the data analysis point. For this study, the correlational field study design will be used. This research design determines the correlation between the two variables. This implies studying whether an increase or decrease in one variable corresponds to an increase or decrease in the other variable. For this study, one variable will be generic drugs, and the other will be the healthcare sector. The study will mainly focus on positive and negative correlation. Regarding positive correlation, it will determine whether an increase in generic drug use leads to an increase or improvement in the healthcare sector. Regarding the negative correlation, the study will determine whether a decrease in generic drug use leads to a decline in the situation in the healthcare sector.
This study targets care providers and patients who purchase and use generic drugs for treatment purposes. A total of 20 participants will be selected to take part in the study. Out of this number, ten will be care providers from different healthcare facilities, and ten will be patients who purchase and use generic drugs for treatment purposes. The selection of the participants in a large population of care providers and patients will rely on purposive sampling. A reason for the use of this sampling technique is the study's interests in care providers and patients who purchase and use generic drugs. The sampling technique is also appropriate in this study because of the interest in participants with knowledge and understanding of generic drugs.
Surveys will be used in this study as they will help to determine the correlation between the two mentioned variables. The surveys will be conducted in person by the researcher. The researcher will issue the respondents with the survey questionnaires, and they will be expected to give complete and accurate answers to the questions (see appendices section).
The survey questionnaire that will be issued to each respondent will contain five questions, including closed- and open-ended questions. The respondents will be given ten minutes to respond to the questions and give back the survey questionnaires to the researcher. The researcher will then carefully analyze the data and come up with findings in line with the research question.
The study will focus on generic drug use in the healthcare sector. It will be guided by the research question: What is the impact of generic drugs on the healthcare sector. The study hypothesis is that generic drugs have significant impacts on the global healthcare sector, particularly when it comes to the reduction of healthcare costs. The anticipated results, if the study were to be implemented, can be examined based on the research question and the survey questions.
It is anticipated that respondents will agree that generic drugs have significant positive impacts on the global healthcare sector, particularly from the perspective of reducing healthcare costs for patients and healthcare facilities. This will be a confirmation of the research hypothesis.
One of the questions in the survey questionnaire will explore whether respondents use generic drugs when themselves or a person close to them has a health complication. It is anticipated that most of the respondents will confirm that they use generic drugs when they have health complications or when people close to them have health complications.
Another question in the survey questionnaire will explore the respondents’ preference for generic or branded medicines. It is expected that many respondents will affirm their preference for generic rather than branded medicines. However, it is expected that a few respondents will also find it difficult to determine their preference for either generic or branded medicines.
The survey will also delve into the reason behind the respondents' choice of either generic or branded medicines. In this regard, most of the respondents will mention the low-cost of generic drugs as a major reason for their choice of the same. A good number of the respondents are also expected to mention the fact that generic drugs account for the majority of dispensed prescriptions for drugs as their reason for choosing generic medicines over branded medicines. Another reason that could be highlighted by most respondents for their preference for generic drugs is their important role in cost containment and patient outcomes. Moreover, it is anticipated that many respondents will mention how the introduction of generic drugs in the market has paved the way for prompt and convenient access to effective and reasonably priced medications.
An important question that will be posed to the respondents if the study is implemented is how they pay for their medicines. Some of the options that will be given to respondents include Medicaid, private/self, company, government, and others. There is no doubt that many of the respondents will confirm that they pay for medicines from their pockets. Many would argue that paying for medicines from their pockets is expensive, implying that low-cost generic drugs is the only solution.
The survey questionnaire will also seek to determine the type of medicines preferred by respondents if they were paying by themselves and from their pockets. In this regard, it anticipated that many will attest to preferring generic medicine because of their low-cost that would make them easily affordable.
The survey questionnaire will also require respondents to give their recommendations regarding the use of generic drugs. To this effect, it is expected that many respondents will push for the widespread use of generic drugs across the global healthcare sector. Their push would mainly be because of generic drugs’ relative affordability.
The anticipated findings above respond to the research question of what impacts generic drugs have on the healthcare sector. The implication of the findings is that the global healthcare sector will reconsider its stand regarding the use and sale of generic drugs as prescription drugs. Another possible implication of the findings is that government authorities will consider coming up with policies and legislations favoring generic drugs as a way of reducing healthcare expenditure. Thus, the potential users of the information from the study would include patients, healthcare facilities, and government agencies and authorities.
Alatawi, Yasser, Motiur Rahman, Ning Cheng, Jingjing Qian, Peggy L. Peissig, Richard L. Berg, C. David Page, and Richard A. Hansen. 2017. "Brand vs. Generic Adverse Event Reporting Patterns: An Authorized Generic-Controlled Evaluation of Cardiovascular Medications." Journal of Clinical Pharmacy and Therapeutics 43 (3): 327–35. https://doi.org/10.1111/jcpt.12646
Desai, Rishi J., Ameet Sarpatwari, Sara Dejene, Nazleen F. Khan, Joyce Lii, James R. Rogers, Sarah K. Dutcher, et al. 2019. "Comparative Effectiveness of Generic and Brand-Name Medication Use: A Database Study of U.S. Health Insurance Claims." PLOS Medicine 16 (3). https://doi.org/10.1371/journal.pmed.100276
Dunne, Suzanne, Bill Shannon, Colum Dunne, and Walter Cullen. 2013. “A Review of the Differences and Similarities between Generic Drugs and Their Originator Counterparts, Including Economic Benefits Associated with Usage of Generic Medicines, Using Ireland as a Case Study.” BMC Pharmacology and Toxicology 14 (1). https://doi.org/10.1186/2050-6511-14-1
Ferrándiz, Jorge Mestre. 1999. “The Impact of Generic Goods in the Pharmaceutical Industry.” Health Economics 8 (7): 599–612. https://doi.org/10.1002/(SICI)1099-1050(199911)8:7<599::AID-HEC479>3.0. C.O.;2-K
Howard, Jennifer N., Ilene Harris, Gavriella Frank, Zippora Kiptanui, Jingjing Qian, and Richard Hansen. 2018. “Influencers of Generic Drug Utilization: A Systematic Review.” Research in Social and Administrative Pharmacy 14 (7): 619–27. https://doi.org/10.1016/j.sapharm.2017.08.001
Pitt, Bertram. 2004. “Generic Drugs in Cardiology: Will They Reduce Health Care Costs?” Journal of the American College of Cardiology 44 (1): 10–13. https://doi.org/10.1016/j.jacc.2004.04.016
Saleh, Shadi, Clara Abou Samra, Stewart Jleilaty, Joanne Constantin, Nour El Arnaout, Hani Dimassi, and Dania Al-Bittar. 2017. “Perceptions and Behaviors of Patients and Pharmacists towards Generic Drug Substitution in Lebanon.” International Journal of Clinical Pharmacy 39 (5): 1101–9. https://doi.org/10.1007/s11096-017-0509-4
Tachi, Tomoya, Kosuke Saito, Hiroki Esaki, Ikuto Sugita, Aki Yoshida, Yuta Kanematsu, Yoshihiro Noguchi, et al. 2018. “The Adoption of Generic Drugs by a Hospital: Effects on Drug Dispensation among Community Pharmacies.” Journal of Pharmaceutical Health Care and Sciences 4 (1). https://doi.org/10.1186/s40780-018-0102-6
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