What's the Difference Between Generic and Brand Name Drugs?

December 30, 2019

12.30 - AM

We’ve all been there: our doctor writes a prescription and we bring it to the pharmacy. The pharmacist offers two choices: the brand name and the generic version of the drug we need. Often, it looks something like this: 

  • Name brand: $240 for a 30-day supply ($8 per dose)
  • Generic: $24 for a 30-day supply ($0.80 per dose)

It’s the quintessential no-brainer, right? 

Interestingly, there are actually a lot of people who swear by a name brand prescription and insist the generic version doesn’t work as well. The big pharmaceutical companies selling their patented, heavily marketed name brand drugs push that same view, even if it’s just subconsciously. Is it true? Are name brand drugs better? Or is choosing generic drugs a great way to save a ton of money?

Let’s dive a little deeper into these questions to determine once and for all what the difference is between generic and brand name drugs.

Why are there two kinds of drugs in the first place? 

The first thing that needs to be understood is the reason these two classes of drugs exist in the first place. 

When a pharmaceutical company releases a brand new prescription medication, it’s the end of a long and expensive research, development, and testing process. New drugs can easily take years to develop and the process can cost billions of dollars, all of which the pharmaceutical company pays up front. When the product they’ve created is finally ready to be released to the medical community, these companies will usually protect their investment with a host of patents, trademarks, and other legal protections that ensure they have the best possible chance of recouping the huge investment they’ve made. 

As a result, no other companies are legally allowed to manufacture medications using the same active ingredients and composition for as long as the initial patent remains in force. And, no company will ever be allowed to use the trademarked brand name or make a medication that looks exactly like that trademarked original. While their intellectual property is protected and they’re the only company that can sell it, they set a price that will allow them to cover their expenses and make a profit as quickly as possible.

Once the drug’s initial patent expires, however, other companies are allowed to create what we call generic prescription drugs: medications with the same active ingredients, in the same dosage options, and designed to work exactly the same as the brand name drug to treat the same conditions. 

Why are generic drugs so much cheaper than brand name drugs?

Generic drugs are almost always dramatically less expensive than their brand name equivalents. There are two prime reasons for this: 

  1. Unlike the original pharmaceutical company that developed the brand name drug, generic drug manufacturers incur no upfront expenses that need to be recouped. As a result, they can pass huge savings on to the customer while still making a healthy profit. 
  2. Since many different companies can manufacture generic drugs which are, by definition, essentially identical, the only thing they can use to compete with each other is price. This naturally brings the price down on popular generic medications.

Are brand name drugs better or safer than generics?

At the grocery store, we’re used to choosing between brand name and “store brand” foods, and more often than not, the brand name version is better. However, the same rule does not apply to prescription drugs. 

That’s because the Food and Drug Administration (FDA) has established stringent standards that generic medications need to meet to be approved for sale in the United States. As part of that approval process, generic drugs must:

  • Contain the same active/key ingredient
  • Have the same strength
  • Use the same dosage form (for instance, a tablet, capsule, or liquid)
  • Use the same route of administration (for instance, oral, topical, or injectable)

As a result, “generic medications perform the same way in the human body and have the same intended use as the name brand medication. All generic drugs approved by the FDA have the same high quality, strength, purity, and stability as brand-name drugs.” In addition, the FDA inspects the facilities where generic drugs are made to make sure the manufacturing, packaging, and testing sites pass the same quality standards as those of their brand name counterparts.

Is there anything different about generic drugs compared to brand name?

Generic drugs must look different than the brand name versions they’re based on, since the shape, color, and other design elements of the medication itself and its packaging are all protected by permanent trademarks and copyrights. 

Likewise, the inactive ingredients that make up the generic version — such as coloring, flavoring, or coatings — are necessarily different. But, only if they have no impact on the strength or effective delivery of the active ingredients.

And, of course, they’re far less expensive for reasons we’ve already discussed. 

Is there any good reason to use brand name medications?

Perhaps surprisingly, there are some legitimate reasons to settle on the brand name prescription:

  • When no generic is available - During the initial patent-protected period, no generic version of a drug will be available. If your doctor recommends trying the drug, you find it to be effective, and you can afford it, it wouldn’t make sense to wait for the generic version to come out.
  • When the generic version doesn’t work as well - It’s rare, but it does happen. Despite being nearly identical, the minor differences between the brand name and the generic may impact how well it works for you. If you’ve had success with the brand name in the past and find the generic doesn’t work as well, it makes sense to stick with the brand name. 
  • You take a “narrow therapeutic index” drug - A few classes of drugs are more susceptible than most to serious reactions caused by minor fluctuations in dose or blood concentration. Known as narrow therapeutic index drugs, many patients who use them find that switching from the brand name to the generic version creates serious side effects. Here’s a list to reference

Which should you choose, brand name or generic?

So, that brings us back to that “quintessential no-brainer” described in our introduction. As you can see, it’s not quite that simple. But, it does usually come down to an easy decision.

In most cases, if your doctor prescribes a brand name drug, the pharmacy has the option to substitute the generic version instead. If there’s a compelling clinical reason why your doctor feels the brand name drug should be used, they will write the prescription accordingly and you should discuss their reasoning with them. All other factors being equal, it just makes sense to save yourself the money and get the generic.

Save up to 60% on generic prescriptions

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