Before we start comparing both these terminologies, we need to know what we are talking about. Let's look at the definitions of Generic Drugs and Branded Drugs and take it from there.

A Branded Drug has a trade name and is drug manufactured by a well established pharmaceutical company, protected by a patent. It cannot be produced or sold by any other company. A brand name will be simpler than the generic name.

Generic Drugs can be defined as a substitute or a bioequivalent of a branded drug satisfying the pharmacokinetic and pharmacodynamic standards. A generic name is the actual chemical name of the drug with respect to the chemical ingredients present within the drug.

Generic Drugs are cheaper than Branded Drugs:-

When we look at the price of both the branded and generic drugs, generic drugs are much cheaper than branded drugs. The principal reason behind this is the huge investment incurred by the brand manufacturing company from the time of research and development till the drug reaches to its end user. To understand the amount of money spent on various processes, read the following points.

1.Brand name companies invest huge amount of money in the process of research and development of any new medicine.
2.Once the medicine is ready, it has to get approval from the government bureaucracy before people can use it. Lot of money is spent in this process.
3.Once approved by the government, the product is promoted using extensive marketing techniques through all kinds of media (print, television, internet etc) and again big money is involved in this process.

Because of this overhead cost involved in manufacturing a particular drug, the end product becomes expensive keeping in mind the profitability of the company.

On the other hand, a generic drug manufacturing company does not have to incur such big money while manufacturing generic drugs which enables them to sell their drugs at cheaper cost and keeping their profit intact.

Why generic drug manufacturers don't have such huge overhead cost?

1.A generic drug manufacturing company has enough information from the studies done by the brand manufacturing company, so they don't have to spend money on research work.
2.By claiming their drug as a bioequivalent, they don't have to spend money to put their medicine on clinical trials.
3.Also, due to extensive marketing of the innovator brand, they just claim their product to be equivalent to it and benefit from the market value of the brand name medicine.

When can generic drugs be produced? Generic medicines can be legally produced in the following conditions

1.If the patent of the brand manufacturer has expired.
2.For drugs which never held patents.
3.If the generic medicine manufacturing company certifies the brand companies patents are invalid or unenforceable or will not be breached.
4.In countries where patents are not enforceable.