A generic drug is a bioequivalent to a brand name drug in dosage form, safety, strength, route of administration, performance characteristics, and intended use.
After Patents or other periods of exclusivity expire, companies can apply to the FDA to sell generic versions in the United States. However, the approval process for generic drugs differs from the approval process for new drugs. To market a generic drug, drug companies must submit an abbreviated new drug application (ANDA) for approval. The ANDA process does not require the drug sponsor to repeat clinical research on ingredients or dosage forms already approved by the FDA for safety and effectiveness.
The United States represents approximately 40% of the global generics market. In the United States, nearly 35 "blockbuster drugs" are expected to lose exclusivity by 2012. Similar trends are expected in other major markets such as France, Germany, and the United Kingdom.
While a generic drug is equivalent to its branded counterpart, the generic version is usually sold for less than the branded price. As a result, generic medicines account for approximately 70% of all prescriptions dispensed in the United States, while only representing 20% of all dollars spent on prescriptions.