Generic vs. brand-name drugs: Is price the only difference?

If you've recently filled a prescription, your pharmacist may have asked if you wanted a generic version of your medicine. You may have wondered why generics cost less, and do they work as well as brand-name drugs?

So what's the difference between brand-name and generic drugs? The short answer: There's not much of a difference, but there are a few things to consider.

What is a generic drug?

According to the Food and Drug Administration (FDA), a generic drug is identical — or bioequivalent — to a brand-name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. This means that a generic drug acts the same way in the body that the brand-name drug would, is intended to treat the same conditions, and is taken the same way. Generic drug manufacturers must ensure that their product is the same as a brand-name drug in order to get FDA approval.

How are generic drugs different from brand name drugs?

The most obvious difference between generic and brand-name drugs is the price. Generic drugs are usually significantly less expensive, typically 80–85%, than the brand-name counterparts. In fact, taking FDA-approved generic drugs saved American consumers $158 billion in 2010 alone.

While the active ingredients are the same in generics as they are in brand-name drugs, the inactive ingredients are not required to be identical. So, some people may experience different side effects when taking the generic version, but this is not common.

On the other hand, some people can have adverse reactions to brand-name drugs, with no reaction to generics.

Why do generic drugs cost less than brand name drugs?

Generic drugs come at a lower price point because they are made by drug companies after the original patent for the brand-name alternative expires. This means that the companies making the generic version do not have to pay for research and development, marketing or promotion. This allows them to price the drug at a lower rate, benefiting the consumer.

The use of generic drugs has been on the rise, with nearly 8 in 10 prescriptions filled in the United States being generic. This has helped patients and hospitals save billions of dollars every year and it’s estimated that patients could save at least two-thirds of their drug costs if they opted for generic drugs.

Do generic drugs work differently than brand-name drugs?

No. Since the FDA requires that generic drugs pass the same tests for quality, potency, side effects, etc., that are required of brand-name drugs this means that, even though generics cost much less, they are of the same quality as any brand name drug.

The FDA continues to investigate and research any differences between brand name drugs and generics, in an effort to eliminate even the smallest of differences.

The FDA has also made it easy to check medication options. Patients can search for generic equivalents by using the Electronic Orange Book and search by the brand-name, and then by the active ingredient name. If other manufacturers are listed with the brand-name manufacturer when searching the active ingredient, they are the generic product manufacturer.

If you are currently taking a prescription, or are prescribed one in the future, ask your doctor about a generic option and if it would work well for you. Also, Cost Estimator will have prescription drug information available in the future, which will make it easy to compare your costs.