Generic drugs are making the substantial profits to the manufacturers. Seeing the profits, even many new companies are trying to enter the generic drug manufacturing. Generic drugs are pharmacological equivalents of the brand name drugs. The formulation of the generic drugs is similar to the brand name drugs. Last year market surveys had declared that a sale of generic drugs all over the world is more as compared to the original brand name drugs. Generic drugs are capturing more than half share in the market.

Generic drugs are very cheap compared to the original brand name companies. Reasons for the cheap price of the generic drug are as follows:

•Cost of production is very less as compared with the original brand name companies.

•No investment is done for the research on generic drug as the research is already conducted by the brand name manufacturer.

•Clinical trials are not conducted by the generic drug manufacturer because they are previously conducted by the brand name manufacturer. So, the money is saved.

•No cost is involved in the advertising and marketing of the generic drug because they get the benefit of the advertising and marketing done by the original drug manufacturer.

Important points for the generic drug manufacturer are that the active constituent of the brand name drug and the generic drug should be same. Side effects of the generic drug should not be more than the original brand name drugs. The time taken by the generic drug should not exceed the time taken by the original drug to show the effect. Dosage and the concentration of the generic should be similar to the brand name drug.

Generic drug are following the simple points mentioned above and are producing the same quality of the generic drug akin to the original brand name drug. Thus, making the double profits and saving the lots of money, which lead this manufacturer to earn a lot of money. Even consumers are preferring the generic drugs because of the low prices. Insurers are also forcing the doctors to prescribe the generic drugs.

Thus taking into the consideration the market demand many pharmaceutical companies had started producing the low cost generic drugs. Because of all these profit earning strategies and seeing the growth ratio in the generic drug market many companies are attracted towards the manufacturing of the generic drugs.