Generic vs Brand Name Drugs: What’s the Difference?

Approximately 90% of prescriptions filled in the U.S. are for generic drugs. Yet, brand name drugs account for approximately 75% of the total prescription costs because they are much more expensive than generics.

Please continue reading to find out the key differences between brand name and generic drugs. Understanding brand name and generic drug facts and differences will help you make an informed choice when filling your prescriptions.

What is a brand name drug?

When a pharmaceutical company first develops and manufactures a medication, they propose the medication’s brand name to the U.S. Food and Drug Administration (FDA). Once approved, the brand name of the medication is the exclusive property of the company that develops it. For example, the generic drug lisinopril, a commonly prescribed blood pressure medication, is also available under the brand name drug Zestril.

When a brand name drug is first introduced to the market, the new drug is often protected by a patent. During the time a brand name drug is patented, other companies cannot make or sell it without permission from the original manufacturer. The patent, therefore, gives the drug manufacturer time to recoup some of the upfront costs of developing the drug by selling the brand name medication exclusively.

The goal is to allow pharmaceutical companies to generate a reasonable profit. Many pharmaceutical companies reinvest some of their profits into developing new drugs, some of which are life-saving medications. Therefore, patents of brand name drugs are necessary to fund the development of new drugs to treat illnesses.

What is a generic drug?

When a brand name drug’s patent expires, other pharmaceutical companies can apply to the U.S. Food and Drug Administration (FDA) for permission to manufacture generic versions of the original drug without going through the lengthy approval process. This makes generic drugs cheaper.

The FDA investigates the manufacturing process and reviews the application. If approved, the generic drug manufacturer can make the medicine. Unlike the initial lengthy and costly process to develop a new drug, generic drug manufacturers do not have to invest time and money on discovering, developing, researching, testing, and getting FDA approval. They can, therefore, sell the generic version for lower prices. There is no limit on how many generic versions of a drug can be produced. As a result, many pharmaceutical companies produce generic versions of one brand name drug, which creates competition.

Generic medicines contain the same active ingredient as the brand name medication. They are regulated by the FDA for safety and efficacy. The FDA also mandates that generic medications are offered in the same strength and dosage form (such as a tablet or an injectable medicine) and route of administration (such as oral, topical, or into a vein) as the original brand name drug.

Why are brand name drugs more expensive than generics?

As mentioned, generic drugs contain the same active ingredients as their brand name counterparts. However, a generic drug manufacturer does not have to spend money on upfront research costs and clinical trials for generic drug approvals. This makes generic drugs considerably cheaper than brand name drugs.

Why choose generic over brand name drugs?

Again, generic medicines are essentially the same drug with the same active ingredient, and the manufacturing process of generic drugs have to meet the same strict standard as the brand name drugs. However, they can be significantly cheaper than the brand name drug. Therefore, choosing generic drugs can result in substantial cost savings. Moreover, generic competition between drug companies can help bring prescription costs down further.

Why choose name brand over generic?

Many people choose name brands over generic drugs because of familiarity. As mentioned, brand name drugs are introduced to the market first, and generic drugs are introduced once the patent expires, which can be 10-20 years later. However, trademark laws prevent drug companies from making a generic drug look exactly the same as a brand name medication. Therefore, even though brand name and generic drugs have the same use, active ingredient, strength, dosage form, route of administration, and labeling, they look different (for example, the color, shape, and size of the pills). People sometimes choose the brand name because they are familiar with how it looks.

There are a couple of other reasons for choosing brand name medications over their generic alternative despite the higher costs:

The generic equivalent of a drug contains the same active ingredient, but it may have different inactive ingredients (fillers or preservatives). Therefore, you may find that while you get the same benefits, you tolerate a brand name medicine better or have fewer side effects on a brand drug because of the differences in inactive ingredients.
Your healthcare provider may recommend a brand name product for a medication that has a narrow therapeutic index (NTI). NTI drugs, for example, anti-epileptic drugs (carbamazepine, phenytoin), blood thinner (warfarin), and thyroid medication (levothyroxine), are those where a very small difference in dose or blood concentration can lead to therapeutic failure or serious adverse effects, which can lead to serious or even life-threatening health complications. In other words, the window between the benefits and harmful adverse effects of the drug is very narrow. The FDA measures the average bioequivalence of the brand name and generic version, but there can still be small differences between brand names and generic medications. Therefore, your healthcare professional may recommend that the prescription for a narrow therapeutic index (NTI) drug be refilled using the same brand name product from the same manufacturer to ensure safety and efficacy.

Why do generic drugs not work the same?

Generic products work equally well as their brand name counterparts. However, there can be a perception of added authenticity when a familiar brand name and a well-known pharmaceutical company’s name is on the packaging or label.

A placebo is a procedure or medical treatment that does not contain any active ingredient or a sugar pill. It is designed to be given to participants of the control group in clinical trials. Studies have shown that when given a placebo, branding medication is associated with more treatment benefits and fewer side effects. More specifically, the brand name versions are reported as being more effective and causing fewer side effects than the generics, even though the medication was either a placebo or a generic medication.

As mentioned, the U.S. FDA ensures that generic manufacturers are held to the same strict standards when manufacturing a generic medicine as its brand name counterparts. These same standards ensure generic and brand name drugs are made in the same way with the correct amount of the active substance, strength, dosage form (pill, solution), route of administration (oral, topical, injection), and indication. While generic and brand name drugs may have different inactive ingredients, these inactive substances in the generic equivalent must be acceptable and should not affect how the medicine works.

Can my doctor prescribe brand name drugs even if equivalent generic drugs are available?

When your doctor prescribes a medicine, they can indicate on your prescription, “no generics,” “brand name only,” or the equivalent term required by the state you live in, and your pharmacy will be required to dispense the brand name even if a generic medication is available.

References: