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Generic vs. Brand-Name Drugs

Generic vs. Brand-Name Drugs


colorful prescription drugs There is a great deal of confusion and misinformation regarding the difference between generic and brand-name medications. This confusion leads millions of Americans to pay hundreds of dollars more than necessary for their medical drug treatment.

The main difference between brand-name and generic medications is the cost. According to the National Association of Chain Drug Stores, in 2008 the average cost of a brand-name drug was $137.90. The average cost for a generic was $35.22.

Brand-name and generic drugs are both developed under the oversight of the Food and Drug Administration (FDA), and follow regulations of the Food, Drug and Cosmetic Act. Generic drugs must meet the same FDA requirements as their brand-name counterparts.

What is the difference between brand-name and generic medications?

A brand-name medication is a drug that is the first of its kind. After research and development, the FDA must test and approve the drug. While in development, the company that owns the new drug will apply for a patent and give it a trade (brand) name. Examples of brand-name drugs include Abilify, Nasonex, Lipitor and Zoloft. As long as the patent persists – 20 years from time of development, but during many of those years the drug is in development and trials – the recipe for the patented medication’s chemical formula is secret. When the patent expires, other companies can copy the recipe and develop the generic alternatives.

Sometimes the brand-name company will produce a generic copy, as well. A generic drug is one that uses the same active-ingredient chemical formula as the brand-name drug. According to the Center for Drug Evaluation and Research, a generic drug is "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use."

In other words, FDA requires that generic drugs must have the same quality and performance – they must give the same treatment – as the brand-name drug. Research has shown only a 2-3% variation between brand-name and generic drug batches. In fact, there is often this 2-3% percent variation between different batches of the same brand-name drugs.

While the active ingredients must be comparable between brand-names and generics, the inactive ingredients may be different. An inactive ingredient includes things like fillers and dyes that create the physical pill or medication. The dye is in the pill, but is not an active part of the treatment. Inactive ingredients, however, may cause different side effects in generic vs brand-name drugs.

If a patient has a sensitivity to a certain dye or a certain other inactive ingredient in the brand-name, they might experience fewer side effects on the generic. And vice versa. While a brand-name and generic are not identical, there is no distinction between two types of drugs in terms of the quality and effectiveness of their active ingredients and thus how they treat a condition. This has been independently and scientifically proven. For example, Kesselheim (2008) demonstrated the clinical equivalence of generic and brand-name cardiovascular drugs.

Why are brand-name drugs so expensive and why are the generics so much less expensive? The cost difference has nothing to do with the quality of the medication. Brand-name drug costs are largely determined by the following factors:

  • Research and Development costs. The brand--name drug’s company researched and developed the formula. Therefore, the cost of the medication also includes the cost of the scientists and teams that developed it for years before it was put on the market.
  • Branding costs. The branded drug is marketed. Marketing campaigns include both media marketing (such as commercials with Nasonex’s French bee) and pharmaceutical sales representatives who visit providers directly. The cost of a brand-name medication includes these marketing costs.
  • Demand. Due to the brand-name drugs being first on the market, and the loyalty inspired by use and marketing, consumers are often willing to pay more for the name they recognize.
There is a widespread assumption that the cost of generics is lower because they are of lower quality. The FDA regulates the medications to ensure this is not true. Rather, the branded drug has associated costs – and a market strength – that the generic drug does not, leading to the higher cost.

What can a consumer do?

Talk to your Provider. Talk to your Pharmacist. Be candid. Providers are also often unaware of the final cost of medication to their patients. If a physician prescribes brand-name medication, ask if there is a generic alternative, and what the pros and cons of taking it might be. Talk to your pharmacist, as well. Generics can often be requested at the pharmacy. And feel free to call the Pharmacy representatives for RMHP or your health insurance provider to get more information.

Generic medications are a safe, effective and less expensive way to get patients the care they need.