A Cure for What Ails You —Or— Take Two Aspirin and Call Me in the Morning

If you're a fan of the older medical-themed TV shows, you've heard this phrase a few times. Two aspirin and a good night's sleep was the treatment most often prescribed. Times and television shows sure have changed. Now we have TV shows where the treatments and diseases are so cutting edge and advanced they border on futuristic. The doctors have transformed from kindly, old Dr. Marcus Welby-types to acerbic, acid-tongued physicians like Dr. House. These shows are interspersed with commercial breaks with happy people running in fields allergy-free, or colorful people next to equally colorful food that resemble each other.

Just as medical techniques and approaches have changed in television-land, here in the real world medicine has advanced as well and taken a number of different approaches to illness. One of the fastest growing areas of medicine is in the pharmaceutical sciences. We now have a pill for just about everything that can be wrong with us. It's simply a matter of choosing among a number of pills that do the same thing and whether to choose generic or brand name. Many people don't like generic drugs because they think it is a "knock off" of a "real" drug. Even the name sounds inferior. How many "generic" chocolate-puff cereals have our kids refused to eat? And where's all the pretty packaging? Plain white boxes don't have the kids screaming for more.

We're a nation of branding. Besides the obvious tastelessness of some "generic" food products, there's the "bling" factor as well. A purse from a discount retail store may look just as good and function as well as a Gucci purse, but given a choice, most people would prefer the Gucci if they could afford it. A recent study served wine-tasters the same wine (unknown to them); one sample was listed as a "budget" wine, the other sample (same exact wine) was labeled "premium' wine...and the participants liked the premium wine better.

Given this mind-set it's no wonder people think that generic drugs are somehow inferior to brand names. Under the law, a prescription drug must be exactly the same chemical composition as the brand-name drug they are replacing. And generic drugs cost less. A lot less. Insurance companies like less expensive. That is why they have formularies (fancy word for list) detailing which drugs they cover and for how much. Since so many drugs do the same thing (albeit some better than others), the insurance companies obviously want to choose the least expensive alternative.

The way insurance companies classify the drugs on their formularies is confusing at best. Usually it is set up in 3 tiers, with Tier 1 drugs being the least expensive. If they are the exact same chemical composition, then why are the brand name's so much more expensive? There are several reasons for this. Most pharmaceutical companies spend billions on research and development only to have a few drugs make it to clinical trials and then to the marketplace. Once it's on the shelf they are constantly on the lookout for side effects that could wind up being a class action lawsuit. If they can weather all that, they are only allowed 7-10 years to market it exclusively before the generics can come in and greatly undercut their prices. An interesting thing happened not too long ago. For the first time in history, pharmaceutical companies paid more for their advertising than for research and development. Those commercials aren't cheap.

But why can other countries like Canada charge so much less for their brand name drugs, you ask ? Price caps on drugs is a very small part of the reason why. The main reason that pharmaceutical companies charge so much more for brand name drugs is because they can. It's the law of supply and demand, as well as charging what the market will bear. American demand accounts for nearly half of the world's prescription consumers. Just as a Big Mac costs more in Hawaii than in Kentucky, Americans typically have a higher standard of living than our northern neighbor and can afford to pay more. (Tell that to a senior citizen on a fixed-income or the single working mother.) As the only industrialized nation without price controls, we're taking up the slack. Another reason is our jackpot legal system. Lawsuits are less common in Canada and the awards are decided not by juries, but by judges, who are less apt to award high dollar amounts. All of this adds up to more money out of our pockets for drugs that Canada gets for less.

So the moral of our story is generic drugs are no less effective than their brand name counterparts and allow you to save money.

Can you please pass me two acetaminophen? I feel a headache coming on.

Until next time, stay healthy!