Generic Drugs are Cheaper - A Complete Guide

Save MoneyJune 18, 2013: Most of us are aware that we can save money by using generic drugs, but how much? The figures are really astounding! Let us consider the following facts:
  • Patients whose needs can be fully satisfied with generics could enjoy 52% savings in the daily costs of their medications.
  • According to an estimate by the Food and Drug Administration (FDA) more than half of all prescriptions are filled using generic drugs.
  • The Congressional Budget Office quoted an estimated annual $8 to $10 billion in savings for generic drug customers (at retail pharmacies). Imagine how much more can be saved if all hospitals use generics.
So, what are Generic Drugs?

Generic DrugsAny drug which is biochemically identical to a brand name drug in dosage form may be termed as a generic drug for that particular brand name drug. Further, FDA requires that the generic must also have same strength, route of administration, performance, quality, characteristics and intended use. In other words the generic and its brand name drug are exactly the same in the way they work.

But how do generics save money?

Although generic drugs are bio-equivalents of their branded counterparts, they are sold at substantial discounts in comparison to the branded price. The reason is generic drug makers do not develop the drug from scratch. Typically the first manufacturing company has to spend billions of dollars in research, development and extensive testing of a drug before it gains a patent and FDA approval. The patent for the new drug remains valid for 20 years. Only after expiry of the patent can other drug manufacturers start selling a generic equivalent. But before that they too must do testing and get a FDA approval.

Is a generic drug available for my brand-name drug?

Generic & BrandNot all brand-name drugs have equivalent generics. As explained above, when the patent is in effect, no other manufacturer is allowed to develop and sell an equivalent drug. But there is certainly hope once the patent expires.

Please use this catalog of FDA-approved drug products to determine if there is a generic equivalent for your brand-name drug. The interface is not very consumer friendly. Here is a step-by-step example to use this website.
  • Step 1: Suppose we are looking for generic equivalents of Motrin which is a proprietary name for a drug. In the search box we should type Motrin.
  • Step 2: In the results page we should look for the active ingredients column. In this case we would see IBUPROFEN listed as the active ingredient.
  • Step 3: Open the same catalog search page in another browser window or tab. This time type in or copy-paste the active ingredient name, which is IBUPROFEN for our example, in the search box and hit enter.
  • Step 4: Voila! We should now see a table of all drugs that have the same active ingredient. Besides Motrin, the table contained Advil, Ibuprin, Midol, Neoprofen etc.
This catalog is for informational purpose only. Please make sure to check with your pharmacist or doctor for professional advice before taking any generic drug. The search database and catalog usually lag behind, so it may not be up to date. For the latest monthly approvals of generic drugs please consult First Generics.

Ok, tell me how much I can save?

Save MoneyThe FDA estimates that we can slash our drug bill by 30% to a whopping 80% simply by purchasing generic drugs instead of brand name prescription drugs. According to the National Association of Chain Drug Stores, 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.

Needless to say that the savings can be significant if our plan requires us to pay a percentage of the cost. Even if the plan requires a fixed copay instead of a percentage, it still makes sense. The total cost incurred by the prescription plan provider will be lower, which in turn will enable them to keep the monthly premiums low. And the best part is that all this is possible without any compromise on the quality of drugs at any level.

Our sincere hope is that this information benefits you. Kindly let us know if we missed something or if you have a concern regarding generics. We shall gladly explore further.

Image Source(s): iStockPhoto

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