Pharmacy Benefits Glossary
A guide to general pharmacy benefits terminology.
What Are Generic Drugs?
Generic drugs are medications containing the same active pharmaceutical ingredient (API) as brand-name drugs. Generics must have the same dosage, strength, route of administration, and effect as the brand-name they are comparable to.
Generic drugs must also be in the same dosage form as the brand-name drug. For instance, if the brand-name drug is manufactured in tablet, capsule, or liquid form, the generic has to be produced in the same form.
The Food and Drug Administration (FDA) rigorously tests and approves the generic version of a medication to ensure it is a safe and effective medical equivalent.
Inactive Ingredients
Generics may have different inactive ingredients than the brand-name, like coloring additives, flavoring, preservatives, or fillers. Inactive ingredients may lead to a different taste or color than the original brand-name, but as long as these ingredients don’t impact the drug’s effectiveness, they are usually approved.
What Is the Difference Between Generic Drugs and Brand-Name Drugs?
Pharmaceutical companies develop brand-name drugs after years of extensive Research and Development (R&D) and clinical trials. They can only be brought to market after rigorous FDA approval to prove safety and effectiveness.
These brand-name drugs are patented by the developing pharmaceutical company and manufactured, marketed, and sold solely by the patent owner. This lasts for a set period until the patent expires, at which point, other drug companies are allowed to seek approval for a generic drug version. The FDA approval process is easier, quicker, and less expensive for generics, but manufacturers must uphold the same standard of effectiveness and safety to patients as brand-names.
Generic drugs are identical to brand-name drugs in their active ingredients, forms of delivery, safety, and effectiveness. Multiple manufacturers can develop generics, which are sold at significantly lower prices.
The Benefits of Generic Drugs
The main benefit of generic drugs is the price. Generic drugs are significantly less expensive than brand-name drugs.
Much of the cost savings come from the original drug manufacturer already investing in R&D, clinical trials, and marketing. Drug manufacturers that produce generic equivalents don’t bear these expenses, so they cost considerably less to produce, and it is easier for generic manufacturers to start seeing a profit in a shorter time.
Other benefits of generic drugs include:
- They provide the same effectiveness as brand-name drugs.
- Generic drugs bring competition to the market, helping to drive down prices.
- Generic offerings help to make drugs more available to everyone who needs them.
- They help reduce the cost of healthcare at multiple other vectors across the industry.
- They encourage innovation as drug manufacturers invest in developing new drugs they can patent.
- Affordable costs mean patients are more likely to adhere to their physicians’ instructions consistently.
Generic Drug FAQs
What kinds of conditions do generic drugs treat?
There are generic medications for treating a wide range of medical conditions like the following:
- Lowering cholesterol
- Lowering blood pressure
- Treating angina, heart failure, and heart rhythm issues (beta blockers)
- Thyroid health
- Asthma and COPD (bronchodilators)
- Regulating blood sugar levels in type 2 diabetes (biguanides)
- Ulcers and GERD (proton pump inhibitors (PPIs))
- Reducing pain, fever, and inflammation (nonsteroidal anti-inflammatory drugs (NSAIDs))
How do you know if a medicine is generic or branded?
Generic drugs typically say “same active ingredient” and use the word “generic” in the labeling. To be certain, you should ask your physician or pharmacist.
