Eli5 – How do name brand drugs turn a profit?

Question

Might sound like a loaded question, but hear me out.

In the Good ol’ USA, generic drugs are required by the FDA to have the exact same make up as the name brand drug (ie. Benadryl vs generic Diphenhydramine). I’d imagine this is also a requirement in other countries.

So how exactly do those companies turn a profit when a generic version of their drug can swoop in and undercut them?

In: 0

Answer 1

Plot twist: often times those “generic” brands are actually owned by the same company. They change the packaging and the look of the pill, but you money is going to the exact same people it was before. It’s the same concept of Ticketmaster also owning the scalping sites.