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

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.

Learnvest

Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!