What Is Increasing the Cost of Generic Drugs? (Part II: Regulatory and Legal Reasons)

The average price of a brand drug falls by about 80 percent or more within a year after it faces competition from generics. Whereas the average cost of a name-brand prescription was $268 in 2011, it was only about $33 for a generic drug. Intense competition usually holds generic drug prices in check. Oddly, during the past few years many generic drugs that have been on the market for decades have suddenly become expensive. In 2014, the price of more than one-fourth of generic drugs rose 10 percent to 100 percent or more. In other cases, old generic drugs have becomes scarce and hard to procure. Drug prices are rising due to several regulatory and legal reasons.

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