February 18, 2021
5 min. read

Generic vs. Brand Name Drugs: The Definitive Guide


It’s a question our pharmacists get all the time: what’s the difference between generic and brand name drugs?

Pharmacologically, generic and brand-name drugs are identical: they contain the same active ingredients, should be taken in the same dose, and have the same intended use, effects, side effects, route of administration, risks, safety, and strength. But there are a few important differences that, as a patient, it can help to be aware of.

patient provider

Do generic drugs work the same way as brand-name drugs?

The Food and Drug Administration, or FDA, mandates that generic medications must be able to be used in place of brand-name drugs and must offer the same benefits as their brand-name equivalents. Because of this mandate, generic drugs are not lesser knock-offs or counterfeits of their brand-name counterparts.

The FDA also requires that generic drugs match brand-name medication in every way – except for appearance, due to trademark laws. There is no truth to the idea that generic drugs are manufactured in facilities of lesser quality or are in any way inferior to brand-name drugs.

Many companies manufacture both brand-name and generic drugs, and the FDA applies the same standards for all drug manufacturing facilities.

generic vs brand name

Why are generic drugs cheaper than brand-name medication?

One of the biggest differences between brand name drugs and generic medications is the price you’ll pay for them. Generic drugs are almost always cheaper because the manufacturers have not had to invest in developing and marketing a brand-new drug.

When a company is bringing a brand-new drug onto the market, it has already spent a lot of money on research and development, as well as marketing and promotion of the drug. They have spent time and money on clinical trials, and they pass some of the costs of those trials onto the consumer.

“Brand name medications will always cost more than generic drugs due to the need for pharmaceutical companies to recoup the money spent on research and development. In recent years, however, there are more factors that come into play that are causing drug prices to skyrocket. In recent news drugs like daraprim and epinephrine, very old drugs, have had their prices increased to astronomical levels due to unscrupulous drug companies,” says Stella Badalova, Director of Healthcare Relations and Clinical Development at Medly Pharmacy.

“Other factors like the middlemen of medicine, insurance companies and PBMs (pharmacy benefit managers), are reimbursing drug prices at lower and lower rates causing drug companies to further increase their prices to make up the difference. This creates a chicken and the egg situation where drug companies blame increased pricing on low reimbursements from PBMs and PBMs lowering reimbursement due to what they find as unjustly high costs.”

generic drugs

When should I pick a brand-name drug over a generic medication?

Because a generic drug is cheaper and does the exact same thing as a brand-name drug, you might think that you should take the generic drug every time.

This is true most of the time, with the following exceptions:

• There’s no generic available. (But even if this is the case, talk to your doctor. They may be able to prescribe you a cheaper alternative or recommend cost-saving programs to help you afford your co pay.)

• When you take a drug with a narrow therapeutic index — which includes lithium, blood thinners, thyroid, and anti-epileptic drugs — if your doctor prescribes you a generic, you should take the generic, and if your doctor prescribes you the brand-name, you should take the brand-name. That’s because when it comes to these drugs, tiny differences in the dose or blood concentration of the medication can cause serious reactions.

• When you don’t do as well on the generic. While this is very rare, there are some individuals who respond poorly when switching to a generic, possibly due to minor changes in how the tablet is made and therefore how that person’s particular system absorbs the drug.

“The FDA has a rating system to determine if a generic medication is a valid substitute for a brand name version. A generic manufacturer seeks to obtain an ‘AB’ rating from the FDA to market it as an equivalent generic,” Badalova explains.

“What an AB rating from the FDA means is that the active ingredient is both bioequivalent and therapeutically equivalent to the brand-name version and that the inactive ingredients used must be proven to be safe for use in humans. This is where individual sensitivities come into play. Just because the FDA has given a generic option an AB rating does not mean that you personally might tolerate that drug. If a generic company uses a different dye or preservative that is deemed safe for human use but you are allergic to, this can spell trouble.”

brand name drugs

How do I get my insurance to pay for brand-name medication?

Insurance companies are naturally interested in increasing the use of cheaper generics over more expensive brand-name drugs in order to protect their bottom line. However, if your doctor recommends you take a brand-name medication, there are ways to get your insurance to pay for them.

• Just choose the drug. Under some plans, you can choose the brand-name drug but will simply pay more. Depending on your plan, that may mean you have to pay the copay for the generic drug plus the cost difference between the brand-name and generic medication.

• Go through step therapy. “Step therapy” requires you to check that other, cheaper drugs don’t work for you first, which means you will try less expensive alternatives before your insurance approves the brand-name. Step therapy is another form of prior authorization. It can take multiple rounds, with multiple drugs, before your insurance approves the brand-name medication.

• Ask your doctor to write to the insurance company. Sometimes your doctor can convince the insurance company that the brand-name drug be added to the insurance company’s preferred drug list.

• See if there is a manufacturer copay card. These cards help people on private insurance pay for brand-name drugs. There are also manufacturer patient assistance programs, which help people who meet certain requirements afford reduced-cost medications. Medly Pharmacy automatically applies copay cards and other coupons to your cart at checkout.

“Luckily there are options available to alleviate some of these issues such as drug samples, free trials, patient savings programs, and drug coupons. If a patient can receive a sample or free trial offer for a drug to see if it is efficacious and tolerated it can save a lot of time and money,” says Badalova.

To find out whether there is a generic version of your drug available, speak to your provider or pharmacist.

Want to keep updated with Medly? Subscribe to our monthly newsletter!

UTM Source:UTM Campaign:UTM Content:UTM Medium:UTM Term:UTM Device:Landing Page:Company:Last Name:
Join Medly