Generic vs. Brand-Name Medication

What is brand name medication?

The brand name, or trade name, of a medication is the name given to a medication by the pharmaceutical company that developed it; the medication is marketed under a proprietary, trademark-protected name. Brand-name medications can be prescription or over-the-counter medications.

What is generic medication?

A generic version of a medication is virtually the same as the brand-name version. It works in the same way, pharmaceutically speaking, to provide the same effect on the body as the brand-name version. A generic version must contain the same amount of the medication’s active ingredient as the brand-name version. To be approved by the U.S. Food and Drug Administration (FDA), a generic medication must be equivalent to the brand-name medication not only in the amount of the active ingredient, but also in medication strength, administration route, quality, side-effects, performance and intended use. Generic medications can differ from their brand-name counterparts in their inactive ingredients, such as flavorings and preservatives.

Why is generic medication cheaper than brand-name medication?

Generic versions of a medication are available at a lower cost because the pharmaceutical companies that create them do not incur the costs related to creating a new medication. When a new medication is created, the cost of researching, developing, testing, marketing and promoting it is expensive, which results in a high price tag. Generic versions of a medication can only be produced after the patent for the brand name expires (approximately 12 years) or if the patent is successfully challenged by a generic pharmaceutical company. When a patent expires on a brand-name medication, the competition of pharmaceutical companies producing generic versions reduces the cost of the medication to the public.

What are the differences between brand-name and generic medications?

Differences between brand-name and generic medications include the following:

• Medication shape
• Packaging
• Inactive ingredients, such as flavorings and preservatives
• Labeling (only minor differences)
• Price
• Expiration dates

FDA requirements

The FDA requires that generic versions of a medication work as quickly and effectively as the original brand-name medication. Identical standards are applied to both generic and brand-name medications:

• Active ingredients must be the same in both generic and brand-name versions.
• Generic medications must have the same form, route of administration and strength as brand-name medications.
• Inactive ingredients of generic medications must be accepted by the FDA.
• Generic medications must be manufactured with the same strict standards as brand-name medications.
• The container and labeling of generic medications is appropriate and acceptable.

In up to 50 percent of cases, the same pharmaceutical company produces both the generic and brand-name version of a medication. Many insurance companies require that individuals are prescribed generic medications as opposed to brand-name medications, if possible. Due to trademark laws, generic versions of a medication are required to look different from their brand-name counterparts. Approximately 80 percent of prescription medications purchased are generic. Individuals can ask their doctor or pharmacist if it is possible to replace a brand-name medication with a generic version.