Generic competition helps slash drug prices

Figure 1: The Effects of Generic Competition Click on table to see full version
In May 2000, the price of a brand-name antiretroviral (ARV) drug cocktail was $US10,400 per patient per year. It was only in October 2000 when a generic producer offered to sell a triple combination cocktail at $US800 that things began to change. Within a UN-led initiative to cut prices of AIDS cocktails for a small number of developing countries, pharmaceutical companies dropped their price to $US931. In February 2001, the generic price dropped again to $US350, which set off a price war between branded and generic drug makers, reducing the prices of both brand-name and generic drug cocktails. In October 2001, the best world price for a triple-combination drug cocktail had come down to $US295.