Why Do Name Brands Cost More?

Published August 25th, 2015 by USA Rx
Fact Checked by
Chris Riley

Why Do Name Brands Cost More?Whether you’re looking through the racks of your local pharmacy or you’re ordering a prescribed medication from the man or woman behind the counter, there’s one thing you’ll notice early and often: name-brand drugs cost a whole lot more than the generic store-brands sitting next to them. So what’s the difference, and what’s with the pricing?  


Patent Protection

Whether you’re discussing drugs, software, or other inventions, the way that American innovators protect their creations is by filing a patent with the United States government. This patent guarantees the holder the exclusive right to manufacture the patented product (or else to grant permission to others in exchange for a licensing fee).

In exchange, the knowledge of how to create the invention enters the public record, and after a few years, the patent expires and everyone is allowed to make and sell it. In the case of drugs, this span is usually around 20 years. The reason for this expiration is to encourage technological innovation, both by encouraging people to share their techniques in the process of patenting them and by encouraging those on the cutting edge to continue pushing forward in order to earn more patents.  


Generic Competition

As far as the drug store goes, what this means is that every medication older than 20 years or so has a generic counterpart which sells for much less because they aren’t paying for research, advertising, or whatever other reasons drug companies may have for marking up the brand-name price.

While brand-name foods are often distinct from store-brands because of slightly different formulas and cooking methods, drugs are far too dangerous to allow for this sort of variation. FDA rules are very strict on this matter, and so generic drugs are required to be as identical to the brand-name drugs as possible, at least as far as the active ingredients are concerned. This means there’s no effective difference between the two beyond the name slapped onto the side of the pill container.

Still, some people (and even some doctors) maintain the theory that brand-name drugs are more effective than generics, and so they keep the branded products alive even after their cheaper competition shows up. Either way, the USA Rx pharmacy discount card covers both brand names and generics, and it can help you save up to 75 percent on the list price whether your health insurance covers it or not. For further information, you can contact us at [email protected] or else call us at 888-277-3911.

Put drug prices & coupons in your pocket!

We'll text you a link to download our free Android or iPhone app