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Generic Drugs: What Are They And How Are They So Cheap?

Kristin Romey
Posted on Jan 15, 2010

medsWith health care costs so upwardly-mobile these days, a great place to cut spending is on prescription drugs. That’s why we want you to be aware of what your pharmacist means when she asks you if you’d like the generic form of your prescription drug.

A generic drug is an FDA-approved copy of a brand-name drug whose patent has expired. It is less expensive because, instead of just one manufacturer, multiple producers can compete to sell you their version. Plus, generic manufacturers don’t need to spend big money on costly marketing or research and development.

Although cost savings vary widely depending on specific drugs and providers, they can be considerable. On average, generic versions of drugs are 80% to 85% less expensive than the brand name versions. Thirty tablets of the antibiotic Cipro (500mg), used to treat respiratory tract infections and other ailments, can cost around $175 without insurance; the generic, ciprofloxacin, is only $10. According to the FDA, seven out of ten U.S. prescriptions are filled with generics.

But, are generic drugs as good for your health as they are for your wallet?

In most cases, the answer is a resounding “yes.” The FDA requires that the generic be as safe, pure, stable, and effective as its brand-name version. Many companies actually manufacture both brand-name and generic forms of the same drug.

A Difference.

However, while both have to meet FDA standards for efficacy and safety, the bioavailability (the amount of time it takes for the active ingredient to be absorbed by the body) of a generic version can vary slightly from the brand-name version. According to the FDA, this variance tends to be about 3%. Though this is not considered a statistically significant amount, there are some murmurings of concern from some patients with very specialized diseases. All the same, as the FDA representative told us, all generics are positively FDA approved.

Generic drugs can differ from their brand-name versions in size, shape, or color, and may contain different inactive ingredients, like dyes and fillers. All of those dyes and fillers, however, are approved by the FDA; these extra ingredients are necessary due to U.S. trademark laws that forbid generics from looking identical to brand-name drugs. Although extremely unlikely, it’s possible for users to react poorly to the generic after switching from a brand-name version, due to one of those inactive ingredients. (If this occurs, stop using the medicine and call your doctor. The FDA asks that all doctors report adverse effects through the MedWatch system.)

The Bottom Line?

Generic drugs are a safe, cost-effective way to manage your health care budget. If you have any concerns about switching from a brand-name to a generic version of a medication, the best person to talk to is your doctor or pharmacist.

For a list of FDA-approved generic drugs, click here.

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  • http://Learnvest.com Kevin

    I always get the generic drugs when I fill my prescriptions. The generic ones are approved by the FDA so whats the problem?

    • The LearnVest Staff

      Well, there have been some controversies in the media about whether the generic drugs really are the exact same thing, because of that 3% difference we talked about. The New York Times did a piece and there have been some murmurs from the epilepsy treatment community–statistics on the internet sometimes say that the difference between generics and name brand medicines is as much as 20-25%. This alarmed us, so we got the FDA on the phone! The FDA told us that those high statistics are often cited but WRONG, because the FDA would never approve generic medicines that were that different from the originals. In reality, generics aren’t packed with weird supplements: They simply have to have bits of dye and other things to prevent them from being 100% identical to the name brands (which is illegal because of copyrights). So, basically, for most people, there is no problem… just misunderstanding, misconceptions, and fear of the unknown.

  • Alina

    One type of drug that is definitely affected by the different absorption rates are psychiatric drugs- Zoloft, welbutrin, other drugs used to treat depression and mental disorders. The absorption rate is extremely important for this type of medication. If choosing to switch to a generic on such medication it is important to talk to your Dr, and also self monitor after switching. I know people who have had success with generics, and people whose medication effectively stopped working with generics- it is (like all psychiatric medication) highly personal.

    Just FYI!

    • The LearnVest Staff

      Hi Alina,

      Thanks for the heads-up. As with all medicines, everyone should definitely consult with a doctor to make sure she’s doing what’s best for her health. Generics can be a great thing, but psychiatric drugs are definitely a sensitive, highly-attuned spot for many patients, and they can vary from person to person. Thanks for sharing your experiences, and we very much agree with you on checking with your doctor. Thanks again!

  • Dee Timmons

    This is, in fact, not all exactly true. Generics are legally allowed a 20% variance in strength, both above and less than the name brand — which means a 40% variance in total. For some meds, this does not make a difference; for others, it absolutely does.

    Also, some manufacturers overseas have less oversight, and can put in additives or binders that are far different — and less acceptable — than the original.

    Since generics provide one of the best solutions to the healthcare crisis, gov. does not want to diss them, but I promise you…if it is your health, and you can afford it, get the name brand. (And I have no financial gain in saying this…)This is the absolute truth; the rest is hype.

    • The LearnVest Staff

      Hi Dee,

      Thanks for your comment. We’re going to run this by our source at the FDA, and will let you know what we find out!

    • The LearnVest Staff

      Hi Dee,

      We contacted the FDA for a rebuttal to your comment, and here’s the answer we got: There’s “a myth that the FDA lets generic drugs vary by as much as +25 percent or – 20 percent from the brand name, leading people to wrongly think the FDA lets generic drugs differ from the brand name counterpart by up to 45 percent. This claim is false.

      The FDA recently evaluated 2,070 human studies conducted between 1996 and 2007. These studies compared the absorption of brand name and generic drugs into a person’s body. These studies were submitted to FDA to support approval of generics. The average difference in absorption into the body between the generic and the brand name was only 3.5 percent [Davit et al. Comparing generic and innovator drugs: a review of 12 years of bioequivalence data from the United States Food and Drug Administration. Ann Pharmacother. 2009;43(10):1583-97]. Some generics were absorbed slightly more, some slightly less. This amount of difference would be expected and acceptable, whether for one batch of brand name drug tested against another batch of the same brand, or for a generic tested against a brand name. In fact, there have been studies in which branded drugs were compared with themselves as well as with a generic. As a rule, the difference for the generic-to-brand comparison was about the same as the brand-to-brand comparison.

      Any generic drug modeled after a single, brand name drug (the reference) must perform approximately the same in the body as the brand name drug. There will always be a slight, but not medically important, level of natural variability – just as there is for one batch of brand name drug to the next.

      All binders, fillers, additives, etc. are FDA-approved as part of a generic drug application, regardless of where the drug is made. All generic manufacturing, packaging and testing sites must pass the same quality standards as those of brand name drugs and the generic products must meet the same exacting specifications as any innovator brand name product. In fact, many generic drugs are made in the same plants as innovator brand name drug products.”

      —-

      Check out the FDA Generic Drug Facts and Myths Sheet here — http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/UnderstandingGenericDrugs/ucm167991.htm

  • http://www.cnyfinancialgroup.com/buying_health_insurance.html OMAR BARRERA

    The above article was well done. I have been searching for just this type of article.I am grateful for this information.

  • http://www.quotelongtermcare.com Noe Son

    I don’t get it.

  • Lindsayg

    I called my insurance company asking about ways to save more on my prescriptions. They said that if I went through my pharmacy benefits manager and received my prescriptions by mail order, I could get 90 days for $22. If I filled them at Walgreens, I would get 30 days for $22. Now, everything is delivered to my apartment and I am saving $44!