Due to limited resources, FDA is unable to perform independent clinical studies, and the agency lacks the regulatory authority to require the generic industry to conduct such studies. FDA will, however, continue to investigate these reports to ensure that it has all the facts about these possible treatment failures and will make recommendations to health care professionals and the public if the need arises. Currently, to better understand what may cause problems with certain formulations if, in fact, they are linked to specific generic products, FDA is encouraging the generic industry to investigate whether, and under what circumstances, such problems occur.
When a company develops a new drug and submits it for FDA approval, a 20-year patent is issued, preventing other companies from selling the drug during the life of the patent. As a drug patent nears expiration, any drug manufacturer can apply to the FDA to sell its generic version. Because these manufacturers didn’t have the same development costs (such as years of expensive research), they can sell the drug at a discount. Once generics are allowed, the competition keeps the price down. Today, almost half of all prescriptions are filled with generics.