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

Marketing is everything. With the correct PR team and advertisers, people will prefer the name brand they trust over the “simple generic option.” Few consider or know how the two are one in the same, rather preferring to stick with the name brand through brand-loyalty from advertising or previous experience.