Why Are Generic Medicines Cheaper Than Branded? (Real Price Data)

Despite being dubbed as the ‘Pharmacy of the World’, the grassroot situation for India is rather grim. The population struggles to access medicines for common chronic diseases like diabetes, high blood pressure, renal, and gastric issues. Medicines account for up to 90% of healthcare spending and a substantial portion of out-of-pocket (OOP) expenses. Many even have to take loans to bear the cost.

When spending on medicines gets this high, it’s natural to look for more affordable options and that raises an important question: why are generic medicines cheaper? This blog explores the answer using real price data, comparing branded medicines, generic medicines, and lab-tested generics.

Looking for how branded and generic medicines actually differ? See the full comparison: Difference between branded and generic medicines.

Why Are Generic Medicines Cheaper?

Generic medicines are cheaper than branded one for five main reasons:

No Research and Development Cost: Generic medicines are cheap because they copy the research of the branded/patent medicines. These are the original innovator drugs – wherein large companies spent years in research to discover and test salts.

No Patent Monopoly Premium: While a medicine is under patent, only the original company can sell it, at whatever price it sets. Once the patent expires, competition from multiple manufacturers brings prices down.

Low Market Spend: Generic medicines aren’t promoted to doctors and pharmacies the way branded drugs are, so that cost never gets passed on to the patient.

Short Supply Chain: Generic medicines pass through, fewer middlemen on their way to the patient, so fewer commissions are added along the way, keeping prices lower.

Economies of Sale: Once a patent expires, multiple manufacturers can produce the same medicine, increasing competition and allowing production at higher volumes. This competition can help bring down the cost per unit.

Branded generics, however, can still be sold at, roughly 10-20 times the manufacturing cost, largely due to the cost of incentivizing doctors to prescribe that specific brand. A doctor could just as easily prescribe the same medicine by its salt name, but there’s no incentive to do so [1].

To provide trustworthy trade-generics, the Pradhan Mantri Jan Aushadhi Yojana (PMBJP) was introduced. The scheme provides generic medicines at really affordable rates through Jan Aushadhi Kendras. 11,000+ Jan Aushadhi Kendras are currently operational. Although the scheme is successful in curing the problem of affordability, the age-old problem in government of quality and accessibility are ever present.

To solve the three major problems of Affordability, Accessibility, and Quality in the Pharmaceutical industry, SayaCare comes into play. We provide simple and bold solutions. Our mission is to provide Affordable Medicines at Your Doorsteps with Quality Assurance.

The government of India spends nearly 3% of its GDP on healthcare. India has a mixed-economy wherein both the government and private players provide some degree of healthcare to the populace. While the public healthcare system is plagued with quality and accessibility concerns, the private system is marred by high costs. Therefore, people need to know the options they have in terms of getting quality generic medicines because knowledge can promote high quality treatment at affordable cost.

COST COMPARISON: SAYACARE, GENERIC AND BRANDED MEDICINES 

METHOD: To conduct a comparative study on prices, the top 50 purchased drugs from SayaCare and their respective highest priced branded counterparts were taken into consideration. [Prices were recorded as of 30 April 2024] The mean of all the prices available for branded and SayaCare’s medicines was calculated, and the percentage difference in the mean costs of generic and branded medicines was calculated.

Here brand name meds are either patented drugs or medicines marketed by big pharma companies. Generic medicines are medicines marketed by small players who copy the formulation from the original innovator, without repeating R&D costs.

RESULT

BRANDED AND GENERIC

Salt (Active Ingredient)	Brand Name	Brand MRP (₹)	Generic MRP (₹)	% Savings
Domperidone (SR) 30mg + Pantoprazole (Gastro-Resistant) 40mg	Pantodac DSR	202.71	129	36.30%
Dapagliflozin 10mg	Forxiga	362.8	180	50.30%
Pantoprazole (Gastro-Resistant) 40mg	Pansec	144	70	51.38%
Telmisartan 40 mg	Tellzy 40	70.67	72.24	2.32%
Acetaminophen 650mg	Calpol 650	33.6	20.16	40.00%
Levocetirizine 5mg + Montelukast 10mg	Montair LC	246	27	89.02%
Telmisartan 40mg + Amlodipine 5mg	Telma AM	307.5	22.95	92.53%
Metformin (SR) 500mg + Glimepiride 2mg	Glimy M2 PR	263	140	46.76%
Amlodipine 5mg	Amlodac 5	42	23	23.09%
Vildagliptin 50mg + Metformin 500mg	Vildala-M 50/500	346	115	66.76%

Biggest price difference: Rs 2552 

Smallest price difference: Rs 0.96 

Average price difference: Rs 147

Of the 50 medicines, 27 (54%) branded and generic medicines have up to 40% price difference. About 18 (36%) medicines have around 80% price difference and  5 (10%) medicines have a price difference of more than 80%.

43 (86%) branded medicines are costlier than their generic counterparts, and the rest 7 (14%) are slightly cheaper than generic drugs. The mean cost of generic drugs is Rs 100 while that of branded medicines is Rs 247.

BRANDED AND SAYACARE

Salt (Active Ingredient)	Brand Name	Brand MRP (₹)	SayaCare MRP (₹)	% Savings
Domperidone (SR) 30mg + Pantoprazole (Gastro-Resistant) 40mg	Pantodac DSR	202.71	24	88.10%
Dapagliflozin 10mg	Forxiga	362.8	34	90.60%
Pantoprazole (Gastro-Resistant) 40mg	Pansec	144	13	90.90%
Telmisartan 40 mg	Tellzy 40	70.6	13	81.50%
Acetaminophen 650mg	Calpol 650	33.6	19	43.40%
Levocetirizine 5mg + Montelukast 10mg	Montair LC	246	22	91.00%
Telmisartan 40mg + Amlodipine 5mg	Telma AM	307.5	25	91.80%
Metformin (SR) 500mg + Glimepiride 2mg	Glimy M2 PR	263	28	89.30%
Amlodipine 5mg	Amlodac 5	42	7	83.33%
Vildagliptin 50mg + Metformin 500mg	Vildala-M 50/500	346	77	77.70%

Biggest price difference: Rs 2595 

Smallest price difference: Rs 14.6 

Average price difference: Rs 219.46

Of the 50 medicines, none of the SayaCare and branded medicines have a 0-40% difference in their cost. About 17 (34%) has a difference of 40-80%, and the remaining 33 (66%) SayaCare and Branded medicines have a price difference of more than 80%.

All 50 (100%) Branded medicines are costlier than their SayaCare counterparts. The mean cost of SayaCare drugs turned out to be Rs 27.6, significantly less than brand name medicines which had a mean cost of Rs 247. But affordability only matters if the medicine is genuinely safe to take, which is why every batch we sell goes through independent lab testing before it reaches you.

CONCLUSION

Brand name medicines cost a fortune, preventing the poor from receiving adequate healthcare support. On the other hand, generics eliminate the gap between the poor and the rich by allowing them to easily access medicines without worrying about their finances. And SayaCare takes this to another level.

1. On average, you save around 80%-90% when purchasing from SayaCare as opposed to branded medicines stores.
2. On average, you save around 50%-70% when purchasing from SayaCare as opposed to generic stores/ e-pharmacies.
3. SayaCare and Jan Aushadhi medicines have hardly any difference in price.
4. SayaCare gets all its generic medicines tested from a government-authorised third-party laboratory for quality assurance, making it more reliable.

Ready to start saving? You can buy generic medicine online directly through SayaCare and get every order delivered with its lab test report. Prefer to order on the go? The SayaCare generic medicine app lets you browse, compare, and reorder in a few taps.

This is just one piece of the picture, for the full picture on generic medicines in India, including how they’re made and how to be sure yours are safe, see our complete guide to generic medicines.

FAQ’s

1- Are generic medicines effective as branded ones?

Generic medicines are as effective as branded ones because they contain the same active ingredients in the same doses. The only difference between them is that branded medicines are highly marketed in comparison to generic medicines.

2- Why Generic Medicines cheaper?

Generic prices are typically 40–90% lower than their branded equivalents because generic manufacturers do not bear the costs of drug discovery, clinical trials, and heavy marketing. Furthermore, once a patent expires, competition among multiple licensed manufacturers drives prices down even further, according to SayaCare’s comparison of 50 commonly purchased drugs.