Generic drugs are the same thing as brand-name medication in every way: active ingredient, dosage, intended use, effects, side effects, route of administration, risks, safety, and strength. Pharmacologically, generic and brand-name drugs are identical: for example, leflunomide vs Arava, sulfazalazine vs Azulfidine, and azathioprine vs Imuran.
The 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, meaning 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.
In truth, the only reason generic drugs are cheaper is 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.”
Ultimately, the company is granted a patent that gives the company the exclusive right to sell the drug.
However, as the patent nears expiration, manufacturers can ask the FDA for permission to make and sell generic versions of the medication. Since other companies don’t need to invest in the development of the drug, they can make and sell it more cheaply.
Furthermore, when more than one company is producing and selling the same drug, the competition between them can drive the price down even more sharply.
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:
“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.”
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.
“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 doctor or pharmacist. The FDA also offers some ways of checking whether or not your drug has generics available here.