Generic Drugs: How They Save the Healthcare System Billions

Generic drugs contain the same active ingredients as brand name drugs but cost a fraction of the price. The Hatch-Waxman Act of 1984 created the modern generic drug approval pathway in the US.

When a drug goes generic, prices typically drop by 80 percent or more. Generics save the US healthcare system over 300 billion dollars annually.

However, generic drug manufacturing quality has been questioned, particularly after recalls of contaminated valsartan and ranitidine. The FDA inspects generic manufacturing facilities, but oversight of overseas factories remains challenging..