Sale

A patent on a drug prevents another individual or company from selling a generic version of the drug. The terms of the patent determine how long the original manufacturer of the product has exclusive rights to the production of the drug.

Patent Expiration

Upon the expiring of a patent on a drug, another company can produce the drug. This means the original version of the drug and generic version can exist on the market at the same time.

Cost

In most cases, the generic version of a drug is less expensive than the name-brand version. This is often because the original company is attempting to recover funds spent in the research and development of the drug along with its initial marketing campaign.

Generic Exclusivity

In some cases, the Food and Drug Administration will issue a 180-day exclusivity patent on the manufacture of a generic version of a drug. This means the first company to manufacture the generic version of the drug will have exclusive rights to do so for that time period.

FDA Approval Process

The generic version of a drug must be approved for sale by the FDA in the same manner as the original version of the drug. If a drug is not approved by the FDA, it cannot be sold.

Source:

Scienceblogs.com

Seekingalpha.com

Wilmerhale.com

Resource:

New York Times