At the same time, Yaffe sees a surge in expiring patents. That means that makers of generics can sell their own, less costly versions of these popular medications. Generic drugs, which can cost 30 percent to 50 percent less than their branded counterparts, have become a significant weapon in the fight against rising drug costs. In 1999, more than 1 billion US prescriptions were filled by generics, according to Mylan Laboratories, which says nearly 45 percent of all pharmacy-dispensed drugs today are generics. Drug companies are now spending millions on consumer marketing to persuade patients to ask for products by name, rather than accepting generics.
Biotech companies create new drugs by manipulating genes.
In 1999, the Food and Drug Administration granted a record 22 approvals for new biotech drugs, and more than 350 biotech medicines are now in late-stage clinical trials. It is the smaller upstarts that are often drawing the most attention from investors. Many pharmaceutical companies help fund biotech development. Major drug manufacturers are also buying biotech companies.