Manufacturing of Authorized Generics: Who Actually Makes Them

When you see a pill that looks exactly like your brand-name medication but costs half as much, you might assume it’s just another generic. But what if that generic was made by the same company that made the brand-name drug in the same factory? That’s an authorized generic - and it’s not what most people think it is.

What Exactly Is an Authorized Generic?

An authorized generic isn’t made by a separate generic drug company. It’s the exact same drug, made by the original brand-name manufacturer, just sold under a different label. No changes to the formula. No changes to the manufacturing process. No changes to the active ingredient. The only difference? The box says something else.

This isn’t a loophole. It’s a legal pathway created by the Hatch-Waxman Act of 1984. The law let brand-name companies protect their patents while still letting them sell a lower-priced version of their own drug. The FDA calls it a "listed drug" sold under a private label. That means it’s still covered under the original New Drug Application (NDA), not a generic Abbreviated New Drug Application (ANDA). So no extra bioequivalence studies. No extra testing. Just the same pill, cheaper.

As of Q3 2023, there were 217 authorized generics on the U.S. market. That’s about 7.3% of all generic drugs sold. And the number is growing. In 2018, authorized generics made up 6.1% of the generic market. By 2022, that jumped to 9.2%. Total sales? Around $4.7 billion a year.

Who Makes These Drugs? The Real Answer

Most people assume generics are made by companies like Teva or Mylan. But with authorized generics, the answer is often the same company that made the brand-name version.

Take Pfizer. They own Greenstone LLC - a wholly owned subsidiary that’s been making authorized generics since 1998. Greenstone doesn’t just make a few. They make over 70, including versions of Lipitor, Lyrica, and Seroquel. All of them are made in the same factories, with the same equipment, the same raw materials, and the same quality checks as the branded versions. The only difference? The label says "Greenstone" instead of "Pfizer."

Here’s the breakdown of who actually makes authorized generics:

• 68% are made in the exact same facility as the brand-name drug
• 52% are made directly by the brand-name company under a private label
• 31% are made by wholly owned subsidiaries (like Greenstone)
• 17% are made by third-party contract manufacturers

That last group - the 17% - still has to follow the original NDA. The brand-name company can’t just hand off production to any generic maker. They have to file paperwork with the FDA, either a Prior Approval Supplement (which takes about 22 months) or a Change Being Effected in 30 Days (CBE30). And even then, the brand company remains legally responsible for every pill that comes out of that factory.

Why Do Brand Companies Do This?

It sounds counterintuitive. Why would a company that just spent billions developing a drug turn around and sell a cheaper version of it?

The answer is control - and timing.

When a patent is about to expire, generic companies start preparing to launch their versions. But if the brand company launches its own authorized generic first, it can capture most of the generic market before competitors even get started. It’s a smart play: they keep the revenue, keep the quality control, and keep their customers from switching to a competitor’s generic.

Take the case of Lyrica. When Pfizer’s patent was about to expire, Mylan (now Viatris) started making an authorized generic version under contract. Pfizer still owned the NDA. The formula was identical. The factory was the same. But now, instead of losing market share to Mylan’s own generic, Pfizer kept the business - and the profit.

It’s not just about money. It’s about trust. Patients and doctors know the brand. They trust it. An authorized generic keeps that trust - even at a lower price.

How Is This Different From Regular Generics?

Regular generics are made by companies that file an ANDA. They have to prove their drug is bioequivalent to the brand. That means testing to show it works the same way in the body. But they don’t have to use the same ingredients, the same factory, or even the same fillers.

Authorized generics? They’re identical. Same active ingredient. Same inactive ingredients. Same manufacturing process. Same facility. Same lot numbers. The only thing different is the label.

That’s why the FDA says authorized generics are therapeutically equivalent - even if the brand-name drug has no other generics approved. They’re not just "similar." They’re the same.

And the data backs it up. In 2022, FDA inspections found that facilities making authorized generics had a 98.7% compliance rate with good manufacturing practices (cGMP). Regular generic manufacturers? 96.2%. That gap isn’t small. It shows that authorized generics are held to the same - if not higher - standards.

Who Benefits From Authorized Generics?

At first glance, it looks like the brand companies win - and patients lose. After all, they’re delaying true generic competition.

Dr. Aaron Kesselheim from Harvard Medical School argues exactly that. In a 2021 JAMA Internal Medicine paper, he said authorized generics create "artificial competition" that keeps prices higher than they should be. Why? Because when a brand company launches its own generic, it often scares off other generic makers. They see the market is already taken and decide not to enter.

But here’s the flip side. For patients who need the drug right now, an authorized generic is often the cheapest option available. It’s cheaper than the brand. And because it’s made by the same company, there’s no guesswork about quality. No concerns about switching. No fear that the pill won’t work the same way.

And for pharmacies and insurers? Authorized generics are a win. They’re cheaper than the brand. They’re reliable. And they’re covered under the same formularies.

Take Nexium. AstraZeneca’s authorized generic, made by their own subsidiary Az generici, hit $1.2 billion in sales in 2022. That’s not because patients were tricked. It’s because they got the same drug they trusted - at a price they could afford.

What’s Changing in 2024 and Beyond?

The FDA is making authorized generics more transparent. Starting January 1, 2024, companies must disclose whether their authorized generic is made in the same facility as the brand-name drug.

This change came after the Government Accountability Office raised concerns in 2022 about hidden manufacturing sources. Patients and providers deserve to know if the "generic" they’re getting is really the same pill they’ve always taken.

And with $127 billion in brand-name drugs set to lose patent protection by 2030, the number of authorized generics is expected to rise 15-20% by 2025. One of the biggest upcoming cases? Humira. AbbVie has already set up Soliris Generics - a subsidiary - to produce an authorized generic version when the patent expires.

The FDA’s GDUFA III rules, updated in 2023, now include streamlined processes for notifying the agency about authorized generics. But the core rule stays the same: the brand company remains responsible. No shortcuts. No compromises.

What This Means for You

If you’re taking a brand-name drug and you see a cheaper version with the same name on the label - check the manufacturer. It might be the same company. It might be your doctor’s favorite brand, just in a new box.

There’s no reason to fear it. In fact, if you’re looking to save money without risking quality, an authorized generic might be your best option. It’s not a compromise. It’s the same drug, just priced differently.

And if you’re wondering why your pharmacy keeps switching your prescription? Ask. You have a right to know. You might be getting an authorized generic - and that’s not a bad thing. It’s the system working as intended.