Saving money by using generic drugs

 Effective use of medical dollars

When your pharmacist asks if you want the brand name or generic, do you wonder if the quality will be lower if you choose the less expensive generic prescription drug? If so, you're not alone. The number one misunderstanding that Americans have concerning prescription drugs is the belief that brand-name medicines are higher quality than generics, reports Gordon Johnston, acting deputy director for the U.S. Food & Drug Administration (FDA) Office of Generic Drugs.

Prescription medicines are a small but growing part of every dollar spent on health care--about eight cents. Studies show that effective use of prescriptions can sometimes reduce overall health care costs, because alternatives to prescription drug therapies--hospitalization, surgery, and nursing home care, for example--are considerably more expensive. So, even though medical expenses generally continue to climb, your pharmacist probably can help you lower the cost of your prescription medicine by offering an option of generic medicine rather than brand-name medicine. Generics are priced anywhere from 45 to 50 percent, and sometimes as much as 90 percent, below the price of their brand-name equivalents. This saves patients--especially older persons and the chronically ill on long-term drug therapy--and insurance companies thousands of dollars without compromising the quality of care.

Drug product selection laws

Most states have drug product selection laws that permit pharmacists to select less costly generic drugs instead of the more expensive brand-name products. The purpose of the drug product selection law is to give you the opportunity to save money on prescription drugs. Although your pharmacist is required by law to give you the medicine prescribed by your doctor, he or she may select a less expensive generic equivalent unless your doctor has asked for a specific brand-name drug as medically necessary.

What are generic drugs?

When a pharmaceutical company first markets a drug, it is usually under the patent that only allows the pharmaceutical company that developed the drug to sell it. This allows the company to recoup the cost of developing that particular drug. It will frequently cost millions of dollars to develop and test a new drug before it is approved for use. After the patent on a drug expires, any pharmaceutical company can manufacture and sell the drug, generically. Since the drug has already been tested and approved, the cost of simply manufacturing the drug will be a fraction of the original cost of testing and developing that particular drug. Even though generic drugs are lower in cost, there are not generic equivalents for all drugs. Drugs protected by patents and supplied by only one pharmaceutical company do not have generic equivalents. Presently only about half of the drugs on the market are available generically.

The quality of generic drugs

The FDA is responsible for making sure that generic drugs are safe and effective. Generic drugs are required to contain the same active ingredients and be the same dosage form and strength as their brand-name counterparts. A generic medicine is marketed in accordance with patent law and is identified either by its own name or by its internationally approved proprietary scientific name. A generic medicine is of the same quality, efficiency, and safety as the original brand name product and undergoes strict scrutiny before it is licensed and given market approval by the authorities. The FDA also requires studies showing that generic equivalents are absorbed into the bloodstream in the same time as brand-name medications.

If your pharmacist gives you a generic drug in place of a brand-name product, most state laws require that it be bio-equivalent as well as generically and therapeutically equivalent. Bio-equivalency means that the generic product to be compared with the brand-name product produce essentially the same biological availability of the active substance in the body when given in the same quantity. A generically equivalent drug product is one that has the same active ingredients, strength, and dosage as its brand-name counterpart. For a drug to be therapeutically equivalent, it must be chemically the same and also must have the same medical effect. So, in simple terms, the original brand-name medicines and its generic counterpart are equally effective--with two major differences between them: the name and the price.


If you have any questions concerning generic drugs or drug product selection, talk to your doctor and explain that you want the most effective drug at the best price. Then contact your pharmacist and discuss the quality, effectiveness, and the cost of the drug product you will be using. As a trained health care professional, your pharmacist is in an excellent position to explain your prescription and instruct you on how to take it for the best results. Having studied drugs, their use, and their effects, your pharmacist is highly qualified to compare and evaluate drug products. If your doctor has not prescribed a particular brand-name medication and your pharmacist feels that a generic equivalent will be just as effective, you will realize a considerable savings if you choose a generic equivalent.

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