Are Generic Drugs as Safe and Effective as Brand-Name?

This article about generic drugs is based on information from the U.S. Food and Drug Administration.

Whether you have prescription drug coverage or not, if you use generic drugs when appropriate for your health condition you can save money – often 80 to 85% less than the brand name drug. But, are generic drugs safe? According to the U.S. Food and Drug Administration (FDA), generic medications are as safe and effective as the brand-name equivalent.

This article will explain what you need to know about brand name versus generic drugs, including safety and effectiveness, availability, and why a generic drug can save you money at the pharmacy.

What Is a Brand-Name Drug?

A brand name medication can only be produced and sold by the company that holds the patent for the drug. Brand name drugs may be available by prescription or over-the-counter. For example:

• Tenapanor, a medication used to treat irritable bowel syndrome with constipation, is sold by prescription only by Ardelyx under the brand name Ibsrela.
• Oxybutynin, a medication used to treat overactive bladder, is sold over the counter by Allergan under the brand name Oxytrol.

What Are Generic Medications?

When the patent of a brand-name medication expires, a generic version of the drug can be produced and sold. A generic version of a drug must use the same active ingredient(s) as the brand name drug and it must meet the same quality and safety standards. Additionally, the FDA requires that a generic drug be the same as a brand-name drug in:

• dosage
• safety
• strength
• the way it works
• the way it is taken
• the way it should be used
• the health conditions that it treats

All generic drugs must be reviewed and approved by the U.S. Food and Drug Administration (FDA) before they can be prescribed or sold over-the-counter.

Are Generic Medications as Safe and Effective?

According to the FDA, all drugs, including brand name drugs and generic drugs, must work well and be safe. Generic drugs use the same active ingredients as their brand-name counterparts and, therefore, have the same risks and benefits.

Many people are concerned about the quality of generic drugs. To assure quality, safety, and effectiveness, the FDA puts all generic drugs through a thorough review process including a review of scientific information about the generic drug's ingredients and performance. Moreover, the FDA requires that a generic drug manufacturing plant meets the same high standards as a plant for a brand name drug. To ensure compliance with this rule, the FDA conducts approximately 3,500 on-site inspections each year.

About half of all generic drugs are made by brand name companies. They may make copies of their own medications or another company’s brand name drugs and then sell them without the brand name.

Why Does It Look Different?

Generic drugs are not allowed to look exactly like any other drugs being sold due to U.S. trademark laws. Although the generic drug must have the same active ingredient as the brand-name drug, the color, flavor, additional inactive ingredients, and shape of the medication may be different. But the drug will still have the same overall effects as a different-looking brand name version.

Does Every Brand-Name Drug Have a Generic Drug?

Brand name medications typically are given patent protection for 20 years from the date on which the application for the patent was filed in the United States. This provides protection for the pharmaceutical company that paid for the research, development, and marketing expenses of the new drug. The patent does not allow any other company to make and sell the drug. However, when the patent expires, other pharmaceutical companies, once approved by the FDA, can start making and selling the generic version of the drug.

Because of the patent process, medications that have been on the market for less than 20 years do not have a generic equivalent being sold. However, your healthcare provider may prescribe a similar medication to treat your condition that does have an available generic equivalent.

Why Are Generic Drugs Less Expensive?

It takes more than 12 years to bring a new drug to market. It costs, on average, $985 million. Since generic drug companies do not have to develop a medication from scratch, it costs significantly less to bring the drug to the market.

Once a generic medication is approved, several companies may produce and sell the drug. This competition helps lower prices. In addition, many generic drugs are well-established, frequently used medications that do not need to bear the costs of advertising. Generic drugs can cost between 30% to 95% less than brand name drugs, depending on generic competition.

Health Insurance Coverage for Prescription Drugs

Most people have prescription drug coverage as part of their health insurance plan. This means they'll get the health plan's negotiated rate on any medications that they obtain through an in-network pharmacy. And depending on how the coverage is structured—including whether a deductible has to be met—the health plan may pay some of the cost of the drug.

But generic drugs tend to be in lower tiers on health plan formularies, which means they have lower out-of-pocket costs. So on virtually all plans, the patient will pay less to obtain a generic drug. And some health plans require members to try a lower-cost (often generic) alternative before the health plan will cover a higher-priced drug. This is known as step therapy.

Healthcare Provider Preferences

Despite the fact that the active ingredient in a generic medication is the same as in the brand-name counterpart, small differences could affect how the generic medication works in your body. This may be due to how the generic medication is produced or the type and amount of inactive materials present in the medication. For some people, these slight differences may cause the drug to be less effective or lead to side effects.

An example of the controversy about generic versus brand name medication is the drug levothyroxine, used to treat people with a low thyroid condition (hypothyroidism). Since many people with low thyroid are sensitive to very small changes in the dose of their medication, switching between brand-name and generic versions of levothyroxine can cause symptoms of too little thyroid medication or side effects from too much medication.

Before switching to a generic drug, speak with your healthcare provider and make sure you are both comfortable with the change.

Resources from the FDA

• Orange Book: Approved Drug Products with Therapeutic Equivalence Evaluations – An online resource for information about all available generic drugs approved by the FDA
• First Generic Drug Approvals – A list of recently approved generic drugs, first-time generics, and tentative approvals

Summary

For the first 20 years after a prescription drug comes on the market, only the company that holds the patent is allowed to manufacture and market the drug. During that time, only that brand-name version is available. But after the patent expires, other companies can manufacture a generic version and market it at a lower cost (the original manufacturer may also choose to market a generic version, in order to compete with other companies doing the same thing).

Generic drugs are required to have all the same active ingredients and comply with all the same safety standards as brand-name drugs. But they are much less expensive, since the manufacturer didn't have to go through the initial research and development process to create the drug.

A Word From Verywell

If your doctor prescribes you a medication, it's worth asking whether a generic alternative is available, and whether your doctor has any preferences or guidance. You'll almost certainly pay less at the pharmacy when you fill your prescription if it's a generic drug. And if your health plan has step therapy rules, a generic drug will let you avoid the hassle of potential claim denials for higher-priced drugs.