Eli5 – How do name brand drugs turn a profit?

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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?

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16 Answers

Anonymous 0 Comments

In addition to what everyone else said, naming matters. Most people know what benadryl is, but I imagine most people don’t know what the active ingredient is called (diphenhydramine). Some generic OTC formulations will say comparable to the active ingredient of benadryl or similar, but at a glance one is recognizable.

When talking about prescription drugs, some states actually by-default sub a generic equivalent unless you or your doctor say not to.

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