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Generic vs Brand Drugs: Your FAQs Answered

Medically reviewed by Leigh Ann Anderson, PharmD. Last updated on May 14, 2024.

1. What is a generic drug or brand name drug?

A generic drug is a medication that has exactly the same active ingredient as the brand name drug and yields the same therapeutic effect. It is the same in dosing, safety, strength, quality, the way it works, the way it is taken, and the way it should be used. Generic drugs do not need to contain the same inactive ingredients as the brand name product.

However, a generic drug can only be marketed after the brand name drug's patent has expired, which may take up to 20 years after the patent holder’s drug is first filed with the U.S. Food and Drug Administration (FDA).

Generic drugs are usually much less expensive than brand name drugs once they reach the market.

A drug company develops new drugs as brand name drugs under patent protection. This protects their investment in drug research by giving the drug company the sole right to manufacture and sell the brand name drug while the patent is in effect.

When patents or other periods of exclusivity expire, other manufacturers can submit an abbreviated new drug application (ANDA) to the FDA for approval to market a generic version of the brand name drug.

2. Are generic drugs as safe as brand name drugs?

Yes. The FDA must first approve all generic drugs before they are marketed. The FDA requires that generic drugs must be as high in quality, and as strong, pure and stable as brand name drugs.

Generic drugs use the same active ingredients as brand name drugs and work the same way. They have the same risks and the same benefits as the brand name drugs.

There can still be troubles with manufacturing in some instances.

3. Why are generic drugs cheaper?

Although generic drug active ingredients are chemically identical to their branded counterparts, they are typically sold at a cheaper price than the brand name drug.

Generics are less expensive because the drug manufacturer does not have to duplicate the original clinical trials for effectiveness and safety, which lowers the cost to bring the drug to market. Generics are not less expensive because they are lower in quality.

4. Are generic drugs always cheaper?

Usually, but not always right away. When a generic drug is first approved and marketed, costs may remain high (although less than the brand name drug) for 6 months because the FDA will give the first generic manufacturer a “180-day exclusivity period”. The “180-day exclusivity” is assigned to the generic manufacturer who is the first to file an ANDA and has done the additional work to get the generic drug to market.

This exclusivity allows the company to be the first -- and possibly only -- generic on the market for 6 months. Generic manufacturers may charge higher prices during this time because there is little to no other generic competition. Generic companies state that exclusivity allows them to recoup expenses related to being the first to bring a generic to market. Quite often this is a disadvantage to the consumer, who gets stuck with the higher priced generic or copay for 6 months.

If more than one generic manufacturer files their ANDA at the FDA on the same day, these companies would share the 180-day exclusivity, which might lead to somewhat lower prices during the 180-day period due to competition, but possibly not as low as when several generics enter the market.

5. Why do generic and brand name drugs look different?

In the United States, trademark laws do not allow generic drugs to look exactly like the brand name drug. However, the generic drug must have the same active ingredients. Colors, flavors, and certain other inactive ingredients may be different but the effectiveness of the drug remains the same.

Learn More: Need to identify a pill by its markings, shape or color? Use the Drugs.com Pill Identifier

6. Does every brand name drug have a generic drug?

Not at first. New drugs are developed under patent protection, and most drug patents are protected for many years after FDA filing. However, it may take a decade or more to research and get the new drug to market.

When the patent gets closer to expiration, other drug companies apply to the FDA for approval to start selling the generic version of the drug. A generic drug can be "tentatively approved" by the FDA prior to patent expiration for the brand product.

Multiple companies can manufacture and sell generic versions of the brand name product. However, some drugs may never have a generic because manufacturers may deem these products unprofitable or too difficult to manufacture.

Since there is a lag time after generic products are approved and when they appear in the "Orange Book," you should also consult the most recent monthly first-time FDA generic approvals.

7. What are "branded generics"?

"Branded generics" are just like they sound -- generic drugs that have a brand name. These drugs are developed either by a generic drug company or the original manufacturer after the patent expires for the original product. The branded generic name is proprietary to (owned by) the company.

IMS Health defines a branded generic as either a prescription product that is a novel dosage form of an off-patent product produced by a manufacturer that is not the originator of the molecule, or a molecule copy of an off-patent product with a trade name. The branded generic must be bioequivalent to the original brand product.

Birth control pills are an example of a branded generic drug made by several manufacturers.

Why do the manufacturers give birth control pills these various "brand" names instead of just staying with the generic name? Their goal is to impart brand name recognition and loyalty by consumers, and to ensure that they continue to use the same product time after time. In addition, many generic drug names, like ethinyl estradiol and levonorgestrel, can be hard for consumers to pronounce and remember.

8. Who can develop a branded generic?

Branded generics, like regular generics, can only be developed after the patent expiration of the original brand name drug. However, branded generics can be made by any pharmaceutical company willing to submit the abbreviated new drug application (ANDA) to the FDA.

In fact, many large pharmaceutical companies that typically only create brand name drugs are now acquiring generic companies, or spinning one off, to delve into this lucrative business. According to the Generic Pharmaceutical Association, brand name companies make about 50% of the generic drugs on the market.

9. Are branded generics more expensive than the generic?

Branded generics are not always as affordable as a true generic. By sporting a brand name, some consumers may incorrectly assume that the branded generic is a higher quality product than a true generic, but that is not usually the case. However, branded generics may be less expensive than the original brand.

In addition, multiple versions of a branded generic may be available on the market, and an insurance company may prefer one branded generic over another, or none at all.

If you find your medication is too expensive, call your insurance company to determine if there is a preferred and more affordable drug that is equivalent to your prescription drug. Your pharmacist or doctor can also help you with this question. In some cases, it might even require a new prescription from your doctor, but it might be worth it.

10. What are authorized generics?

An "authorized generic” is an exact copy of the brand name version authorized by the original patent holder of the drug product. An authorized generic is a prescription drug that is produced by a brand company under a New Drug Application (NDA) and marketed as a generic under a private label. It is identical to the branded product in appearance (shape, color, markings) and unlike a generic, the authorized generic has exactly the same inactive ingredients.

For example, Greenstone is an authorized generic supplier and wholly-owned subsidiary of Pfizer. Greenstone is one of the older authorized generic distributors in the U.S. As an example, Greenstone markets the authorized generic for ziprasidone (Geodon), an atypical antipsychotic originally made by Pfizer. See an image of this product here.

Usually, costs for authorized generics should be lower and similar to other generics at the pharmacy. However, because these drugs are developed through an NDA process by the brand company, they are not always initially more affordable than other true generics and may result in higher copays.

If you find that your generic medication is too costly, ask the pharmacist if there is another generic manufacturer with a lower cost, or check with your insurance company.

11. Is a biosimilar also a generic drug?

No, a biosimilar is not considered a “generic” in the same way that a traditional drug is determined to be a generic. A biosimilar is a biological product that is “highly similar” to a U.S.-licensed reference biological and which has no clinically meaningful differences between the biological product and the original branded product in terms of safety, purity, and potency of the product. The FDA approval process for biologics and biosimilars is somewhat different.

Related: How many biosimilars have been approved in the United States?

Biosimilars are similar, but not exact copies of the active ingredients, as with generics for small-molecule drugs. Under regulations enacted by the FDA, a biological product may be considered “biosimilar” if data show that the product is “highly similar” to an already-approved biological product. However, as with generics, cost savings for the healthcare system and the consumer will occur with biosimilars; however, these products can be very expensive.

Examples of FDA-approved biosimilars include:

Learn More: What Are Biosimilars? Top Facts You May Not Know

12. Where else can I get information about generic drugs?

Ask your doctor or pharmacist for information about your generic drugs. Be aware that your generic drug may not look like the brand name product. When you use generics, and you get refills, your generics may also not look similar from refill to refill because the pharmacy may stock different generic manufacturers for your medicine.

Always check your medicine before you leave the pharmacy, and if you have questions about it's color or shape, ask your pharmacist

Most prescription bottle labels in the US now list the manufacturer name, shape, markings and color of the medicine on the label itself. You can use the Drugs.com Pill Identifier to identify generic drugs by color, shape, or markings.

You may also search the Drugs.com Generic Drug Database for more information on available generic products.

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Further information

Always consult your healthcare provider to ensure the information displayed on this page applies to your personal circumstances.

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