Brand-name drugs, also known as brand-name medicines, are drugs that have been developed and approved by the original pharmaceutical company. This company is the developer of the new active pharmaceutical ingredient or the new dosage form and therefore also the patent holder.

The most important characteristics of brand-name drugs:

• Research and development: Brand-name drugs (translation into German: Originalarzneimittel) require extensive research and development work in order to develop new chemical compounds or biological substances that have the desired therapeutic effect.
• Clinical trials: They undergo a series of clinical trials (German translation: klinische Prüfungen) on humans to prove their efficacy and safety. This can take many years and requires considerable investments. It usually takes around ten years for a new drug to actually come onto the market and start yielding a profit.
• High costs: Research into new active pharmaceutical ingredients and the subsequent development and marketing authorization of brand-name drugs is associated with high costs for the pharmaceutical company conducting the research. In addition, not every active pharmaceutical ingredient makes it onto the market, meaning that a company can invest a lot of money in a potential API candidate that never becomes a drug.
• Patents: After successful research, development and marketing authorization, a company can obtain the patent rights (German: Patentrechte) to a new active pharmaceutical ingredient or a new manufacturing method, which grants it the prerogative to manufacture and sell this drug for a certain period of time. This ensures that the manufacturer can cover its drug development costs.
• Branded packaging: Brand-name drugs often have unmistakable trade names and packaging that contribute to their recognition value and thus to customer loyalty.

After the patent expires, other manufacturers can start producing and selling generic versions of these drugs (generic drugs) after they have undergone a simplified approval process. The brand-name drug usually serves as a reference listed drug. Generic drugs are analogs to the brand-name drugs that contain the same active pharmaceutical ingredient in the same dosage, but are sold under a different name and usually cost much less.

Brand-name drugs play a key role in medical innovation and are therefore indispensable, but their high cost can mean that they are only available to a limited number of patients.

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