Question

What pricing strategies do generic drug manufacturers use?

Answer 1

Generic drugs are created to provide alternative for already approved brand name drugs in the markets . Both are of same quality and effectiveness , the only difference being in price . The lower price of generic drugs makes them more affordable for consumers .

Because generics are almost similar to brand name drugs , the costs associated with introducing them to the market are lower because there are less research and development expenditures that manufacturers must recover from the market . For this reason, there have traditionally been many generic manufacturers supplying products, because of lower entry costs in the market and the resulting product volume has tended to keep acquisition costs low . The price of generic drugs is based on the product volume in the market or the degree of competition . More the number of firms manufacturing generic drugs lesser is the price . Also due to lower cost of production generic drug manufacturers always keep prices lower than brand name drugs to attract consumers more and increase profits .