Brand vs. Generic
December 17th, 2007 by MikeWhy do people prefer branded consumer products over no-names, but not a branded drug over its copycat generic? Take the very popular iPod, for which there are cheaper alternatives, like Sansa. Or TVs – Sony and Panasonic come to mind – but there are plenty of cheaper alternatives, like Vizio and Olevia. Yet, I don’t think anyone would suggest that the iPod or Sony TV will go away.But, when it comes to drugs – which affect your health and well-being far more than an electronic gadget – people overwhelmingly prefer the generic. Payers clearly play a large part in this, but public sentiment still favors the generic. A recent forecast of the pharmaceutical market (IMS Health’s 2008 Global Pharmaceutical Market and Therapy Forecast) shows global growth of 5 percent to 6 percent in 2008. But it forecasts that generics will grow by 14 percent to 15 percent.
People are willing to pay more for branded consumer products because they perceive the brand provides value. Some folks suggest that branded drugs are perceived to have little or no value because the pharmaceutical industry’s reputation is so poor. What do you think?
December 29th, 2007 at 1:06 am
Some categories are more price sensitive then others. There is something about drugs and chemicals that make me not care about the brand. Perhaps the restrictions on pharmaceutical advertising have made it difficult to differentiate the compounds. Also, drugs don’t seem to live or die by the cool factor, like electronics do. Maybe it has something to to do with what your friends see you with. No one ever sees you taking the generic pharmaceutical product, but tote something other than and Ipod and you are so not cool! Maybe there is an opporunity for the drug companies.
By the way, I always buy the brand. Just proves I drink the Kool-Aide!
Jeff Hunt