Brand-name vs. generic drugs: What’s the difference?

Choosing generic versions of over-the-counter and prescription medications can save you money. But why are generic drugs cheaper, and are you missing out by not paying more? Here’s what you need to know about brand-name vs. generic drugs.

We hear about brand-name medications all the time. Friends, family members, and healthcare providers talk about them. Ads on television, radio, and the Internet sing their praises. Yet 9 out of every 10 prescriptions in the U.S. are filled using generic drugs, according to the Food and Drug Administration (FDA). When it comes to brand-name vs. generic drugs, why are generics so much more common than the household names?

Generic drugs have the same active ingredients as the brand-name drugs they’re modeled after. But they can net you big savings: They cost anywhere from 20% to 70% less than name-brand ones. Generics aren’t only prescription medications, either. From painkillers to antihistamines to sleep aids, drugstore aisles are filled with generic options for over-the-counter (OTC) remedies as well. And just like brand-name medications, generics must be okayed by the FDA.

Still, like many people, you may be on the fence about using them. To help address your concerns, here are answers to 6 of the most asked questions about generics.

Why do generic medicines often cost less than the brand-name choice?

Creating a new drug is expensive. But generic drugmakers aren’t making a drug from scratch. So the costs to bring it to market are less. Studies that were required for the brand-name meds, for example, don’t have to be repeated to prove that the generic version works and is safe. 

There’s the competition factor too. “By the time a drug becomes generic, it’s no longer protected by a patent. So other companies can come in and make the drug,” says Mahek Shah, M.D. Dr. Shah is an associate faculty member at the Harvard School of Public Health and Brigham Health, Ariadne Labs. “This typically drives down the price for patients because there is competition and no longer an exclusive maker of the drug.”

Do generic medicines work the same as brand-name medicines?

In short, yes. A generic drug uses the same active ingredients as its brand-name counterpart, and it works the same way, says Dr. Shah.

The only thing that may be different is the inactive ingredients. These are ingredients that don’t affect the therapeutic action of the drug. One study did find, though, that there were small differences in how the body absorbed generic and brand-name medicines. Some generics were absorbed slightly more. Others were absorbed slightly less. 

While this is fine for most drugs, there are some where it may make a difference, notes Dr. Shah. One example: Those that involve replacement of hormones. “Many women with hypothyroidism who are treated with the hormone drug levothyroxine [Synthroid] end up staying on the brand because they started on it and prefer it to the generic,” Dr. Shah says. Your doctor can tell you if one might be better than another for you. 

Many health plans offer 3-month refills, prescription coverage, and other benefits that help you save on your medications. Ask your health plan if you’re eligible.

What standards must generic medicines meet to get FDA-approval?

Drug companies need to submit an abbreviated new drug application (known as ANDA) to the FDA for approval to market a generic drug. “It’s a very rigorous process,” says Dr. Shah. The company needs to show that compared to the brand-name version, its generic has the same: 

  • Active ingredient.
  • Strength.
  • Type of product (pill or injectable).
  • Route of administration (oral or topical).
  • Life span (it must work as intended for a reasonable amount of time before expiring).
  • Manufacturing standards. FDA inspectors will even go to the manufacturer’s facility to make sure it’s making the medicine correctly.
  • Drug label to inform consumers about usage, dosage, and more. (There may be some small differences, such as uses that are protected by a patent.)

Why does a generic drug look different from the brand-name drug?

Trademark laws in the United States don’t let a generic drug look exactly the same as other drugs already on the market. “Oftentimes, a generic manufacturer has a different way to make the medication. But as long as the active ingredients are the same and the inactive ingredients are safe and effective, the FDA gives its okay,” says Dr. Shah.

But the FDA has asked drug companies to make generic drugs that look similar to the brand product. This is done to stop patients from getting confused. It’s especially helpful for people who take multiple meds and sort them by shape, color, and size. 

Why aren’t there generic versions of every medicine?

When new drugs are first made, they have drug patents. “This helps the company that made the drug recoup some of the research and development costs, plus all the costs that were invested in drugs that failed in clinical trials, as is often the case,” says Dr. Shah. “This is a common reason pharmaceutical companies give for their higher prices for brand-name medications.” Once a patent expires, other drug companies can start selling a generic version of the drug. But only after any necessary testing and FDA approval.

How do I know if a generic of my brand-name medicine is available?

There are a few ways to do this. The easiest is to use a digital health management tool like Wellframe. The Wellframe app is offered by many health plans as a free benefit to its members. It can connect the member to a customer service representative to assist with pharmacy and benefits questions. And a nurse care manager can talk to you about your medications and personal needs, says Susan Beaton, RN. Beaton is vice president of Health Plan Strategy at Wellframe.

You can also search a few different websites. Two to try: 

  • Drugs@FDA. Search by brand name. Then click on the brand-name product. Drugs that include an ANDA number next to the name are generic products. (Be sure it’s not an NDA, which is a new drug application number.)
  • Orange Book. Search by the brand name and note the active ingredient. Now search again by the active ingredient name. When the list of drugs comes up, look at the column “Appl. No.” Does the letter “A” appear before the number? If so, that product is an FDA-approved generic for the brand-name drug.  

As always, make sure you double-check any information you find online with your doctor before making any medical decisions. 

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