- Chris Woolston, M.S., and Stephen Levine
- Posted March 11, 2013
Whether you're shopping for soda or blue jeans, chances are you'll recognize a brand name. Companies like Coca-Cola and Levi Strauss Co. have spent billions trying to win our loyalty, and in recent years, changes in federal law have allowed drug manufacturers to advertise directly to consumers, too.
Watch the nightly news or read a magazine, and you'll see ads for brand name medications. These ads may be persuasive, but remember: No matter how it's marketed, how it's packaged, or what it's called, every drug is just a combination of ingredients. And, in many cases, you can buy the exact same medication without paying brand name prices. The use of generic drugs saves consumers an estimated $10 billion a year in drug costs. A 2008 report from the AARP notes that every 1 percent increase in generic drug use could result in up to $4 billion in savings for consumers and the health care system.
Can a cheaper generic drug be substituted for most brand name drugs?
In many cases, yes. Hundreds of popular brand name drugs are now available in generic forms. Currently, about two-thirds of prescriptions are filled with generic drugs, and almost invariably, the generics are cheaper.
Drug prices can vary widely, but in some places, an uninsured person taking the antidepressant Prozac (30 pills at 20 mg each) can expect to pay as much as $140 a month. The generic version of the drug, fluoxetine, is available in 20 mg form for as little as $15 a month at some stores. In most cases, generics cost 30 to 80 percent less than the brand-name version. According to the Food and Drug Administration (FDA), in 2004 the average price of a generic prescription drug was $28.74, while the average price of a brand name prescription drug was $96.01.
Why are brand name drugs more expensive?
For one thing, companies spend millions of dollars developing new drugs, which involves screening promising candidates in the lab, then testing the drug on animals before moving on to small trials with human subjects. Finally, the companies conduct longer drug trials with more people.
Also, companies making brand name drugs devote a certain percentage of their budget to advertising, which can be expensive. Most importantly, companies protect their investment by filing for patents on new drugs as soon as they're invented.
But years later, once the patent has expired and the company has used up its right to extensions to keep manufacturing the drug exclusively, other companies can apply to the FDA to make a generic version. Without research costs to cover, these companies can sell the generic drug at closer to what it costs to manufacture.
Are generic drugs safe?
Generic drugs are just as safe and effective as their brand name counterparts, according to the FDA. In fact, they have to be by law.
Many people are suspicious of generic drugs, which tend to have long, nearly unpronounceable names and are never featured in splashy television ads. But according to FDA regulations, any generic drug has to have the same active ingredients in the same amounts as the brand name version.
Generic drugs must also be bioequivalent to brand name drugs. This means that generic drugs can be expected to act in the body just as the brand name drug would, and that the rate and extent of absorption into the blood is not significantly different.
If generic and brand name drugs are equivalent, why do they look different?
Any generic pill that copied the look of a brand name pill would violate trademark law. Also, generics may have different inactive or "filler" ingredients. If more than one company is producing a generic version of a drug, each will be slightly different, but these differences should be clinically or medically insignificant.
How are generic drugs tested?
In contrast to the lengthy testing a new drug undergoes, the approval process to market generics is usually limited to bioequivalence data from the laboratory, and the results of a trial with a few dozen healthy volunteers. The FDA tests and rates generic drugs for equivalence, just like every other drug.
Of the generic drugs in the FDA's Orange Book (the reference manual for drug equivalence), 96 percent are rated equivalent to a brand name version of the same drug. As a general rule, the FDA maintains that there has been no evidence that generic substitution is harmful. According to a report in the March 2002 issue of Family Practice Management, neither patients nor doctors need to take any extra precautions with generic drugs.
Are there cases in which a brand name drug is a better choice?
For most people, most of the time, a generic drug makes economic and medical sense.
In cases in which the difference between a therapeutic dose and a toxic dose is small (what researchers call a "narrow therapeutic index drug"), some doctors say brand name drugs are often the best choice. However, there is no medical research to suggest that brand names are better than generics in most cases.
The FDA maintains that the bioequivalence standards are adequate because the differences between generic and brand name drugs rarely have any effect on treatment. In any case, they point out that the average difference in blood absorption between brand names and bioequivalent generics is much smaller than what's allowed -- often just 3.5 percent, a rate comparable to differences between various batches of brand name drugs.
Can I ask my doctor to prescribe a generic drug?
You can certainly talk to your doctor about it. Given the tremendous potential savings, doctors are increasingly prescribing generic drugs. According to a study by the AARP, generic prescriptions now account for over 65 percent of all prescriptions in the United States, up from only 27 percent in 1987. Your doctor will likely be glad to prescribe a generic drug if you request one and a generic is available.
If you're taking a brand name prescription drug and want to cut your costs, first talk to your doctor about whether taking a generic alternative is a possibility for you. About 20 percent of prescription drugs have no generic equivalent. If your medicine isn't available in generic form, there may be a similar one that is, or a cheaper version in your health plan's formulary (preferred drug list) that works the same way. Be aware, however, that a generic drug may not always be the least expensive option, especially if you have a drug discount card: Different plans have different pricing structures based on the discounts each program has negotiated for its card holders. If you aren't sure what will cost the least, ask your pharmacist or plan administrator for help.
In some cases, doctors may have a valid medical reason for continuing to prescribe the brand name drug. For example, individuals may react differently to certain antidepressants, even though the drugs may have the same effects in a large population. If your doctor is reluctant to allow a generic substitution, make sure that the "no substitutions" box on your prescription is checked and the pharmacist fills the prescription exactly as written.
What role does my pharmacist play?
Even if your doctor writes a prescription for a brand name drug, the pharmacist provides another level of review before you get your medicine. Pharmacists can be another source of information about alternative medications that could be cheaper for you.
If your doctor didn't check the "no substitutions" box, your pharmacist may ask you if you'll accept a generic substitute. (Many health plans and 12 states require pharmacists to automatically substitute the generic version when available, unless the doctor has specifically noted otherwise. In 17 states, the pharmacist isn't required to notify you when substituting a generic drug, but most must inform you or ask permission.)
Depending on your insurance plan and state law, this may reduce your out-of-pocket cost. You may have the right to insist on the brand name drug if you prefer it, though you'll probably have to pay much more for it. Similarly, the pharmacist may call your doctor to ask if a cheaper drug may be substituted for an expensive one, as long as both work in the same way. In this case, it's your doctor's call whether to allow the change.
If no generic alternative works for you right now, keep an eye out for new options to discuss with your doctor. Generic drugs may be hard to pronounce, but at much lower prices, they're pretty easy to take.
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