As Generic Drug Competition Increases, So Do Product Recalls, Study Finds

Generic drug price competition may come at the cost of relaxed manufacturing standards, according to a study published in the Journal of Operations Management.

“In other words, you get what you pay for, and eventually, a relentless focus on price reduction can lead to cost cutting in areas that should not have costs cut, such as quality control,” the study’s lead author George Ball, an assistant professor at the Indiana University Kelley School of Business, told FDAnews.

Generic drugmakers are not permitted to change the design of a product but they do have more discretion in manufacturing decisions. "This may explain why firms producing a higher proportion of generic products may have higher rates of recalls," co-author Rachna Shah, an associate professor at the University of Minnesota's Carlson School of Management, said in a statement accompanying the study.