Drug development is a difficult task; it requires a large amount of money to be invested in many processes related with drug development. These processes include drug development in laboratory, testing on animal, testing on human volunteers, negotiation with governmental agencies for getting approval and marketing of drug. According to an estimate around $800,000,000 is generally required to be spent on the development of a drug. With such a huge cost it is not possible for drug developing pharma-company to sell pills on loss cost. Patent laws protect the company from any theft of its intellectual property i.e. copying of drug. The span of this protection differs country to country. An estimated timeframe for a drug development is generally around 20 years.

Once line of functioning of a drug is understood other companies are also able to invent bioequivalent of the branded drug, which will have similar traits and efficacy. These bioequivalent of a drug are known as generic drugs. Any company can produce generic drug when patent of drug developing company has expired or generic drug producing company can prove patent of drug developing company is invalid or the country where generic company is producing drug doesn’t come under enforcement of patent laws.

Whatever the reason for producing generic drug will be, generic drug is beneficial for users. Generic drug companies have everything ready for the production of drug like knowledge about line of action of chemical, knowledge about its substitute, and readiness of market for sale because of publicity campaign carried by original drug. Moreover generic drug companies do not have to waste their time, energy and money in clinical testing of drug. Because of all these privileges enjoyed by generic drug companies their products are available on much lower price.

FDA ensures efficacy and safety of generic drug so that consumer doesn’t have to suffer because of any malpractice. Generic drug manufacturer also have to maintain the same standard as maintained by branded drug manufacturer therefore safety is not a concern while switch over from branded drug to generic drug. Trademark laws in many countries do not let generic drug manufacturer to keep the same brand name for their product as used by branded drug manufacturer. However, most of them try to drive an equivalent name for their product as use by branded drug manufacture. They also try to keep same look of the medicine like colour, flavour and size etc.

To protect themselves from generic drug companies branded drug manufacturers have adopted a new concept. They most of the time sell license for producing generic version of drug to their subsidiaries. This is particularly done in a nation, which does not come under international patent laws. Generic drug produced under such system is known as authorized generic drug. There is the similarity of a great degree in branded drug and its authorized generic version.

From customer point of view it better to switch over to generic product if the doctor prescribes for it.