How do companies in this industry differentiate themselves from one another?

The pharmaceutical market is a very competitive one; many different companies are currently in place distributing generic drugs that essentially differentiate very little in terms of the final product. However, this is why more successful companies find that most profits are to be attained through means of innovation. What this means is that an excellent way for a company to stand out in the pharmaceutical world is by developing new drugs to meet a demand. This is an expensive process however as tedious research and testing is required in order to put a medicine on the market. This is why for the most part, new drugs are simply spin-offs of previously developed ones but either with a few well advertised advantages or a lower price. In terms of generic pharmaceuticals, it is key to have the lowest price; this is simply because consumers are more likely to buy the same product for the lowest price if possible. However, there are some brands such as Tylenol or Advil that are trusted over other companies by many consumers and they are willing to pay a premium for these drugs over the competing-cheaper generic drugs.
A specific example is the ADHD drug Vyvanse and the ADHD drug Adderhal. They are both amphetamines used to help people with ADD and ADHD, however, recently, vyvanse being a newer drug has been a favorite for consumers over the previous popular drug, Adderhal. What is the reason for this? According to the article "Vyvanse vs Adderall-Benefits, Problems," Vyvanse is a safer drug to take than adderhal because Vyvanse is less affected by the user's diet as opposed to Adderall which can be dangerous to take if drinking orange juice in instance. Another reason more doctors are prescribing Vyvanse over Adderhal is because Vyvanse cannot be abused by snorting or injecting it while Adderhal has been abused for years. In summation, the minor inovations used to create Vyvanse create an increase in purchase incentive for consumers, and while Adderhal has been trusted in the past, buyers look to see the modernness of medications and attempt to reduce negative side affects whenever possible, even if they are insignificant.

Stephen Kessler
Source:
http://healthlifeandstuff.com/2009/07/vyvanse-vs-adderall-simple-vs-complex/