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The Price of a Label: Generic vs. Brand Name Drugs

Dr. Mario Trucillo

Last updated: November 22, 2016 3:17 pm

I often get a lot of questions from friends and family when they get their prescriptions home from the pharmacy and the name or look of the pills are different from what they’ve had in the past or different from what the doctor had actually prescribed.  “Why did the pharmacist give me this drug instead of what was written on the prescription?”, “Why do these pills look different from the others I was taking?”, “Is this the same drug that I have taken in the past?” and finally “Is it safe to take this even though I have been taking something else before?”  If these questions sound familiar, chances are you received a generic drug rather than the brand name that you may have been expecting or your pharmacy has changed a supplier of the generic drug you have become accustomed to taking.  Either way, there are some things to know help you understand generic drugs and to put your worries to rest.


What Are Generic Drugs?

A generic drug is identical–or bioequivalent–to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. 1

Bioequivalence means that there are no significant differences in the rate and extent of absorption of the active ingredient at the site of drug action when administered to patients or subjects under similar conditions as the brand name. 2

What this basically says is that under similar conditions, when a generic or a brand name drug are given to the same individual patient, the patient should absorb the same amount of each drug, or very close to the same amount of drug, and absorb it at the same rate. 3  The purpose of bioequivalence is to prove that the generic drug is substitutable for the brand name drug and perform in the same manner or “therapeutically equivalent”.  Bioequivalent products and therapeutically equivalent products can be substituted for each other without any adjustment in dose or other additional therapeutic monitoring. Generic drugs are chemically identical to their branded counterparts and are safe and effective alternatives to brand name prescriptions.  They play a very important role in our healthcare system because they can help both consumers and the government reduce the cost of prescription drugs.


How Are Generic Drugs Approved by the FDA?

When a generic drug product is approved, it has met rigorous standards established by the FDA to have the same quality and performance as brand name drugs.  Drug companies must submit an Abbreviated New Drug Application (ANDA) for approval to market a generic product.  Legislation passed in 1984, made ANDAs possible by creating a compromise in the drug industry.  New drugs, like other new products, are developed under patent protection. The patent protects the investment in the drug’s development by giving the company the sole right to sell the drug while the patent is in effect (Patent life now is generally about 20 years 4 ). When patents or other periods of exclusivity expire, manufacturers can apply to the FDA to sell generic versions.

An ANDA contains data which when submitted to FDA’s Center for Drug Evaluation and Research, Office of Generic Drugs, provides for the review and ultimate approval of a generic drug product.  Similar to a sponsor company submitting a New Drug Application the ANDA must undergo a review process.  Chemistry, Manufacturing, and Controls are rigorously reviewed by both the new drug reviewers and the generic drug reviewers.  Labeling is also reviewed and has to be identical in most aspects to the branded drug.  Testing is identical for the new drug applications and the generic drug applications.  The same FDA field inspectors inspect the manufacturing facilities for generics and for the innovator products.

The difference with the process for approving generic drugs is the fact that they are considered by FDA standards to be bioequivalent and the ANDA process does not require the drug sponsor to repeat costly animal and clinical research on ingredients or dosage forms already approved for safety and effectiveness.  The generic may also differ in certain additives or excipients, pharmacokinetic data, and, due to multiple manufactures, characteristics such as color, shape, and markings on the drug itself.   For example a drug such as Prozac (manufactured by Eli Lilly) will look different manufactured by a different company under the name of the active ingredient fluoxetine. 5

The requirement for a generic drug to gain FDA approval include:1

  • contain the same active ingredients as the innovator drug(inactive ingredients may vary)
  • be identical in strength, dosage form, and route of administration
  • have the same use indications
  • be bioequivalent
  • meet the same batch requirements for identity, strength, purity, and quality
  • be manufactured under the same strict standards of FDA’s good manufacturing practice regulations required for innovator products


Are Generic Drugs Safe?

Healthcare professionals and consumers should consider generics to be safe and therapeutically equivalent due to the rigorous standards set by the FDA in its review process.  A study published in the Journal of the American Medical Association evaluated the results of 38 published clinical trials that compared cardiovascular generic drugs to their brand name counterparts and there was no evidence that brand name heart drugs worked any better than generic heart drugs. 6  However, the differences in shape, additives, color, packaging, etc. (due to different manufacturers of generic drugs) may be important to the care of the patient and the prescribing physician may make note that the “brand name is medically necessary” or “dispense as written”.

The monitoring of adverse events for all drug products, including generic drugs, is one aspect of the overall FDA effort to evaluate the safety of drugs after approval. Many times, reports of adverse events describe a known reaction to the active drug ingredient. Reports are monitored and investigated, when appropriate. The investigations may lead to changes in how a product (brand name and generic counterparts) is used or manufactured.


The Big Picture

A significant reason that prescriptions for generic drugs have increased, although chemically identical to their branded counterparts, is they are typically sold at substantial discounts from the branded price. Generic drugs are less expensive because it isn’t necessary to repeat drug discovery, pre-clinical studies, or clinical studies (repeating would be unethical).  Generic firms generally don’t do advertising and promotion.  According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies.  Even more billions are saved when hospitals use generics.1  This generally will help to defray healthcare costs in the long run, making it more affordable.  The lower cost of prescriptions may also improve patient adherence to medication because they are more affordable. 7

With the rising costs in bringing new drugs to market, the drug companies are spending billions looking for the next “blockbuster” drug.  Generic drugs are not only a safe and effective alternative to branded drugs, but have become a necessity in maintaining affordable healthcare.


For more information about generic drugs please see the FDA’s Information for Consumers “Facts About Generic Drugs

  1. US Food and Drug Administration. What Are Generic Drugs? Last updated May, 12, 2009. Retrieved at: http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/UnderstandingGenericDrugs/ucm144456.htm. Accessed March 5, 2014. 

  2. US Food and Drug Administration. CFR – Code of Federal Regulations Title 21. Last updated June 1, 2013. Retrieved at http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?fr=320.1. Accessed March 8, 2014 

  3. US Food and Drug Administration. Online Training Seminar: “The FDA Process for Approving Generic Drugs” – Presentation Transcript. Last updated June 18, 2009. Retrieved at http://www.fda.gov/Training/ForHealthProfessionals/ucm090320.htm. Accessed March 5, 2009. 

  4. US Food and Drug Administration. Frequently Asked Questions on Patents and Exclusivity. Last updated December 12, 2012. Accessed at http://www.fda.gov/drugs/developmentapprovalprocess/ucm079031.htm. Retrieved on March 9,2014. 

  5. Kefalas CH, Ciociola AA. The FDA’s generic-drug approval process: similarities to and differences from brand-name drugs. Am J Gastroenterol. 2011 Jun;106(6):1018-21. 

  6. Kesselheim et al. Clinical equivalence of generic and brand name drugs used in cardiovascular disease: a systematic review and meta-analysis. JAMA. 2008;300(21)2514-2526 

  7. Shrank WH, Liberman JN, Fischer MA, et al. The consequences of requesting “Dispense as Written”. Am J Med. 2011;124(4):309-317