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

They effectively copyright the drug; generics can’t be made right away when a drug is invented (unless the drug maker doesn’t patent it). Instead, they get to produce and make profits off the brand name for 20-30 years until the generic comes out.

See: my $300 Vyvanse prescription