Final answer:
Generic drugs are cheaper than brand-name drugs because they do not require the same investment in R&D and marketing. The FDA requires these drugs to be equivalent to the brand-name versions, ensuring their therapeutic efficacy. Regulatory processes, while ensuring safety, can delay the availability of new treatments.
Step-by-step explanation:
Lower-cost generic drugs tend to be sold to purchasers eligible for these prices under specific regulations such as the Nonprofit Institutions Act. These drugs are less expensive than their name-brand counterparts primarily because they do not require the same level of investment in research, development, and marketing that the original drug went through. Once the patent of a brand-name drug expires, other manufacturers can produce and market generic versions, which have the same active ingredients and are required by the U.S. Food and Drug Administration (FDA) to be therapeutically equivalent to the brand-name drug.
The availability of generic drugs can drastically lower prescription costs for consumers, particularly after the introduction of legislation such as the Medicare Prescription Drug and Modernization Act of 2003, which aimed to make prescription drugs more affordable, especially for the elderly and disabled. Though the FDA ensures safety and efficacy through regulation, lengthy drug approval processes can be a downside for companies trying to bring new drugs to market and for patients waiting for new treatments.