Prescription bottle, laying on side

How generic drugs save Americans $3 billion a week

August 7, 2015

After Salima Rami injured her back in a car accident, her doctor prescribed her the brand-name pain medication Percocet. When she went to fill the prescription her pharmacist explained it would take several days for the brand-name medication to arrive, but in the mean time he would dispense the generic form of the drug. “I didn’t notice any difference,” she says, “it worked just as well while I went through physical therapy and it was much cheaper.”

Prescription bottle, laying on side

Consumers often believe that like other brand-name retail goods, brand-name drugs are higher quality than generics, but that isn’t necessarily true.

According to the Food and Drug Administration, generic drugs account for more than 8 in 10 of all prescriptions filled in the United States. For many consumers generics are a cost-effective alternative to pricier brand-name prescription drugs. “Generic drugs offer consumers tremendous savings,” says Robert W. Hutchison, Pharm. D., associate professor of pharmacy practice at the Texas A&M Health Science Center Irma Lerma Rangel College of Pharmacy. “Generics save the average person 80-85 percent on the cost of a prescription. To put it into perspective, generics save Americans $3 billion each week.”

Generics are so cost effective, many insurance companies require pharmacies dispense them in place of the brand-name drug whenever possible. Hutchison says most patients don’t notice the difference between the brand-name and generic version of the drug. “Generic drug manufacturers are required to prove to the FDA that the drug has the same efficacy and quality as the brand-name.”

Consumers often believe that like other brand-name retail goods, brand-name drugs are higher quality than generics, but that isn’t necessarily true. In a recent randomized double-blind study patients were given two shots. They were told the first shot was a brand-name drug and the second was a generic drug with the same efficacy. While both shots were the same saline solution, patients reported a 28 percent improvement in their symptoms after receiving the shot of the fake brand-name drug.

This perception isn’t uncommon and Hutchison stresses that generics must have the same active ingredients as the brand-name drug. Inactive ingredients in generics can vary. “The FDA allows generic drugs a 20 percent variation in how they are absorbed and processed by the body, but studies show that in practice the actual variation is much smaller, only 3.5 percent.” Hutchison also notes the 3.5 percent variation can also occur within different batches of brand-name drugs. Generics are so similar to their brand-name counterparts, Hutchison says, “some generics are even made in the same factory as the brand-name drug.”

Some people wonder why brand-name drugs come with a bigger price tag if they are manufactured in the same facility. The Tufts Center for the Study of Drug development estimates pharmaceutical companies spend $2.6 billion out of pocket to research, develop, gain FDA approval and market a new drug. “Pharmaceutical companies bear a lot of upfront costs in developing new drugs. Those costs are passed along to the consumer in the form of the brand-name version of the drug,” confirms Hutchison.

In part because of these significant upfront costs, not all drugs are available in generic form. After gaining FDA approval many prescription drugs are patented, preventing generic versions from hitting pharmacy shelves for several years. Additionally, many narrow therapeutic index (NTI) drugs are not available in generic form for safety reasons. Drugs on the NTI contain active ingredients that have a small margin between a therapeutic and toxic dose, including some blood thinners and chemotherapy drugs.

Despite their efficacy and cost savings, the generic version of a drug may not be suitable for everyone. Hutchison says some people may be more sensitive to variations in medication than others. Amy Hasselkus suffers from an autoimmune disorder and during a flare up several years ago her pharmacy dispensed the generic form of her usual brand-name drug, Pred Forte. “It just didn’t work – the inflammation got worse and I had no relief,” she says. Hasselkus returned to her doctor for help. “[He] had to prescribe the brand-name drug for me, which worked.” While Hasselkus’ experience isn’t typical for most generics, Hutchison says it does happen. “If you and your provider believe you need the brand-name drug, your doctor can write ‘do not substitute’ on the prescription.”

If you’re considering switching from a brand-name to a generic drug here are some quick tips to help you along the way:

  • Ask your doctor or pharmacist if switching from a brand-name to a generic drug would be right for you considering your medical history;
  • Consult the Drugs@FDA registry to see if a generic version of your drug exists;
  • Ask your insurance company if they offer pharmacy or mail order discounts for switching to a generic drug;
  • If you aren’t able to switch to a generic drug, look for a coupon on the manufacturer’s website to help reduce your copay or coinsurance;
  • If you’re having difficulty affording your medication consider looking into assistance programs such as RxAssist to help reduce to the cost of your medication.

— Leslie Waghorn

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