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Most Americans are unhappy about the cost of drug prices.

In 2016, the U.S. spent $450 billion on prescription drug costs, and spending is projected to increase to $610 billion by 2021.

Even though 90 percent of prescriptions filled in the U.S. are for generic medications, brand-name medications account for 74 percent of spending on medications in the U.S.

Generics save Americans billions every year. In fact, generics saved U.S. consumers $253 billion in 2017 and over $1 trillion in the past decade.

In this article you’ll learn about the main differences between generic and brand-name medications.

Fast facts: generic and brand-name medications
  • All brand and generic medications go through FDA approval to show the medications are safe and effective before sale in the U.S.
  • Not all medications have generic versions.
  • A brand medication is the “innovator” or pioneer, and gets patent and exclusivity protection so generics can’t compete right away.
  • Generic medications must meet the same quality, strength, and purity standards as brands, so they have the same benefits and effects.
  • Generics must have the same strength, dose, route of administration, and active ingredient(s) as the brand
  • Brands and generics don’t look exactly alike (color, size, shape, packaging), but they work the same.
  • Generic medications cost a lot less than brand names.

Generic medications are a chemical copy of the original brand, with the same active ingredients. Generics are also available at a lower cost than brand-name medications. In fact, generic drugs cost 85 percent less than the brand version on average.

FDA gives patent and exclusivity protection to brand manufacturers to allow them to profit from their innovation and research for several years. During this time, no generics can compete with the brand.

Once the patent has expired, generics can enter the market through a shortened FDA approval process. Generic medications need to meet the same quality, safety, and effectiveness standards as brands.

Most active pharmaceutical ingredients (API) and generic medications are made outside the U.S. in countries like China, India, and various other countries.

Yes. Generic medications must meet the same quality standards for approval by the FDA as brand-name medications.

Generics have to prove they are bioequivalent to the brand version. Bioequivalence means the generic works the same way and provides the same benefits.

It’s the FDA’s job to monitor drug safety. They inspect over 3000 drug manufacturer facilities around the globe every year. The FDA also monitors generic medication safety after drug approval.

If the FDA discovers problems with safety or quality, a recall is issued for the affected medication to keep the public safe.

For example, if there are reports of a medication causing side effects, or adverse reactions, FDA investigates and acts when needed.

You may have heard about different blood pressure medications being recalled, as well as and the heartburn medication Zantac. These medications had trace amounts of cancer-causing impurities.

FDA issued recalls on these medications to remove them from the market. FDA also increased safety checks to prevent contamination problems in the future.

How to report a problem

If you ever experience a problem with a medication, you can report it to FDA’s MedWatch program. You can also subscribe to get reports of problems.

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A bigger concern with medication safety is purchasing treatments from unsafe online pharmacies. Many online pharmacies sell unapproved brand and generic medications directly to consumers without a doctor’s prescription.

For example, FDA sent a warning letter to Global Drug Supply which operated, for selling many misbranded and unapproved new drugs.

Some examples of medications sold by potentially unsafe online pharmacies include:

If you’re considering buying medications online, FDA has tips on how to buy safely online. It’s also important to tell your doctor and pharmacist about all your medications to avoid adverse reactions.

Generic medications go through testing for quality, strength, purity, and potency to show effectiveness before approval by FDA. They must have the same active ingredient and provide the same benefits.

There are a few differences, however. Generic and brand medications don’t look the same. Generics may have slightly different inactive ingredients (fillers, binders, flavors, etc.). These don’t affect how the medicine works.

Many people have concerns about switching to generics and prefer brands. Some doctors also have concerns with certain medications. To be clear, this is a preference. These concerns might include:

  • worsening of symptoms or condition
  • side effects
  • adverse reactions
  • effectiveness
  • safety
  • quality

There are no laws that restrict the substitution of any FDA-approved generic or brand medication. It’s up to you and your doctor to decide what’s best for you.

You and your doctor can discuss if a brand or generic is the best option for you based on your comfort and budget. If you switch from a brand to a generic, you may need closer monitoring to make sure the medication is suitable for you.

If you have a question about a specific medication, ask your pharmacist.

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Cost is one of the main reasons a generic is the better choice. Generic medications are a lot less expensive than their brand counterpart.

Data indicates the use of low-cost generics improves health outcomes, and one reason is people taking generics are more likely to take their prescribed medications.

Medication affordability is one of the biggest concerns for many Americans today. A recent Kaiser Family Foundation survey found 79 percent of people surveyed said drug prices were “unreasonable.”

If you don’t have insurance, cost may be a big reason a generic medication could be a better option.

In some cases, you may need to take a brand-name medication if there’s no generic available.

You may also need to stay with a brand-name if you didn’t respond to the generic, your symptoms got worse, or you had an allergic reaction or side effect from an inactive ingredient.

Doctors sometimes prefer not to switch medications that have a narrow therapeutic index (NTI), or safe range. This means there’s a smaller window between the benefits and the harmful effects of the drug.

Doctors do regular blood tests to make sure you’re in the safe window. Some examples include blood thinners like warfarin (Coumadin), thyroid medications like levothyroxine (Synthroid), the heart medication digoxin, medications for epilepsy or seizures.

Again, this is a personal choice between you and your doctor. Be sure to talk with your doctor about your options.

Brand medications are new discoveries developed through research and clinical trials. New drugs go through years of testing on animals and humans to prove they are safe and effective before they are ready for us to use.

This takes a lot of money so brand companies get patent and exclusivity protection from competition for several years. The manufacturer of the brand can set any price for that medication to profit from their new discovery.

Only after the patent has expired and several generic companies enter the market does price come down, often to less than 20 percent of the brand price through competition.

The best way to understand more about a medication your doctor has prescribed is to speak with your pharmacist. Brands and generics don’t look alike because brands have trademark protection.

The color, shape, or other traits may be different, but the active ingredient for brands and generics are the same. You can also tell the difference by the name. The generic name is also the active ingredient, like the sedative diazepam for the brand Valium.

You can also check with FDA’s website to see if a medication has a generic at Drugs@FDA by entering the name of the medication.

You can check the “Orange Book” by searching under the brand name or the active ingredient.

Some medications are only available as a brand. But if a medication has a generic version, many states have laws that require pharmacists to switch to a generic when one is available.

Rules about switching to generic drugs

  • In most states, pharmacy staff must notify you about switching to the generic.
  • Your doctor can write “do not substitute,” “dispense as written,” or “brand medically necessary” to avoid generic switching.
  • You can refuse a generic substitution.

Keep in mind though, if you have insurance, only the cost of the generic medication may be covered. Most insurance companies have drug formularies or lists of approved medications.

Generic medications are just as safe as brands. They must go through the same testing to show they work before approval by FDA.

Brand and generic medications have the same effects. This includes any side effects and adverse reactions. Your pharmacist can give you information on everything you need to know to take the medication safely.

In rare cases, you might have a reaction to an inactive ingredient in a generic medication.

The inactive ingredients are fillers, binders, colors, flavors, and preservatives. These ingredients don’t affect how the medication works, but sometimes you might have a reaction to one of these ingredients.

If you have a question about your generic medication, you can ask your pharmacist, or call the Poison Center at 800-222-1222 or go to PoisonHelp.

Note: If you ever have an allergic reaction to a medication, call your doctor. If your symptoms are severe, call 911 right away.

How to tell if your insurance or Medicare plan covers a generic or brand-name drug

Most insurance companies, including Medicare Part D drug plans, have a formulary, or list of preferred drugs, in a step system of five or six tiers

  • The lower tiers have preferred generics and are usually just a few dollars.
  • The highest tier has specialty brand medications that usually require prior authorization or approval from your insurance company because they are expensive.
  • Medicare, Medicaid, or private insurance usually requires a generic substitution if one’s available.
  • If you want a brand when a generic is available, you may have to pay full price.
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Brand and generic medications must prove they are both safe and effective for FDA approval. If you choose to take a brand medication over a generic, your insurance may require you to pay full price.

Generics are the less expensive option in most cases. For certain medical conditions, your doctor may prefer sticking with a brand to keep your levels steady.

Your pharmacist can answer any concerns you have about brand or generic medications. To learn more about generic medications, you can visit the FDA website here or call 1-888-INFO-FDA.