Generic vs Brand Name Drugs – What You Need to Know

Written by Ally Streelman

NowRx Pharmacy

What is the difference between generic and brand name drugs?

Most of us understand the difference between generic and brand name options when we go into the grocery store. But what about generic vs brand name drugs inside the pharmacy?

Understanding the differences between generic vs brand name drugs is important. Whether you take multiple prescriptions or just the occasional over the counter medication. Here, we’ll cover everything you need to know about generic vs brand name drugs to better understand your medication.

Let’s dive in!

What Is A Brand Name Drug

A brand name drug is a prescription or over-the-counter medicine with a specific name or trademark. The name is generally the company or brand that manufactures and patents it. For example, Tylenol (acetaminophen) and Lipitor (atorvastatin) are brand names for two commonly used medications.

Brand name drugs are usually the first of their kind. These drugs undergo expensive and rigorous clinical trials to determine their safety and efficacy. Once the FDA has approved the medicine, the company may bring the medication to market. Following approval, brand name drugs are protected by patents and given market exclusivity by the FDA, which means no medication with the same active ingredient can be produced for the life of the patent..

What Are Generic Drugs

Generic drugs are medications created to be the same as an existing FDA approved brand name drug. This includes safety, strength, quality, performance characteristics, intended use, dosage form, and route of administration.

The FDA’s approval process for generic drugs is slightly different than for new drugs. Since a branded version of the generic has already gone through clinical trials and been approved, the FDA reviews an abbreviated new drug application for generic drugs. These applications require companies to show the generic drug is bioequivalent and can be substituted for the brand name medication.

What Is The Difference Between Generic and Brand Name Drugs

The main difference between generic and brand name drugs are their patent protection, inactive ingredients, and price.

Brand name drugs are usually the first of their kind in the market following a rigorous and expensive approval process. As a result, they are protected by patents. This prevents other medications with the same active ingredients from being produced for the life of the patent. The life of the patent is typically 20 years although this will vary depending on the drug.

Following the patent’s expiration, a generic drug may be developed with the same active ingredients. Generic drug companies are required by the FDA to submit an abbreviated new drug application for approval. This ensures bioequivalence and allows the generic drug company to avoid costly clinical trial. However, bioequivalence does not mean generic drugs are the exact same so to speak.

A generic drug may have certain minor differences in inactive ingredients from its brand name counterpart. However, these are medically insignificant and must have no effect on how the medicine functions.

Generic drugs are able to avoid costly clinical trials with the abbreviated new drug application. As a result, these medications are usually much less expensive than their brand name equivalents. In addition, greater competition amongst generics and brand name medications can help lower the average price of medication overall.

Why Are Brand Name Drugs More Expensive

Brand name drugs are more expensive than generics due to the cost and time of development. The fact is around 90% of clinical trials fail. In addition, it takes between $314M to $2.4B to bring a new medicine to market. Manufacturers need to make up these costs and turn a profit over the life span of the drug. If they are unable to recoup costs, these manufacturers risk going out of business. Meanwhile, generic drugs avoid these costs with abbreviated new drug applications. As a result, brand name medications tend to be more expensive.

Critics of drug manufacturers have argued these companies should limit profits to cover expenses. As a result, breakthrough medications would be more accessible and affordable for patients that need them. Conversely, drug manufacturers have argued this would limit innovation in development.

Are generic drugs less effective?

No, generic drugs are not less effective than their brand name counterparts. Although there is some stigma around generic medications, the FDA thoroughly vets all generic medications to ensure bioequivalence. This is a fancy way of saying the generic medicine works in the same way and provides the same benefit as its brand name counterpart. The FDA says there will always be some variation, however it is not medically significant. In addition, this variability occurs for both brand name and generic medicines.

When Can Generic Drugs Be Produced

Generic drugs can be produced after the brand name medication patent expires. Brand name drugs retain a patent for a certain length of time, typically 20 years. During this time, the FDA grants it market exclusivity, which means medications with the same active ingredients cannot be produced. In addition, the FDA grants a 180 day exclusivity period to the first generic applicant.

Questions about Generic vs. Brand Name Drugs? 

The FDA thoroughly tests and reviews both generic and brand name drugs to ensure safety and efficacy. However, there are some instances where one may be more suitable than the other. Talk with your doctor and discuss your situation to see what is best for you.

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