Generic vs. Brand-Name Drugs: Is There Really a Difference?

a detail photo of Generic prescription medication.
Sharon Steinmann/The Penny Hoarder

The difference between generic and name-brand drugs sends my head spinning with questions.

Why is generic always cheaper — if not free? Why do some drugs not some in generic forms? Do I actually have different side effects or is it that the ol‘ placebo effect? How come I even have an option? Why do I sometimes not have an option?

I’ve asked the pharmacist and my doctor these questions, and I always get a mumbo-jumbo reply that doesn’t directly answer any of my questions. Sorry, I don’t have a PhD.

Now my rule of thumb is to just opt for the cheapest offering. However, I still wonder: What’s the difference?

In the spirit of saving money and questions — so many questions — I decided to dig up some research and chat with some experts.

Generic vs. Name-Brand Drugs: What’s the Deal?

Well, there really isn’t a big difference.

“The FDA goes to great lengths to ensure that the brand and generic drugs perform equally,” Sandy Walsh, a press officer at the Food and Drug Administration, writes in an email.

“Health care professionals and consumers can be assured that FDA approved generic drug products have met the same rigid standards as the innovator drug,” she continues. “All generic drugs approved by FDA have the same high quality, strength, purity and stability as brand-name drugs.”

Additionally, she says, the manufacturing, packaging and testing sites have to pass the same type of quality tests as the sites of brand-name drugs.

So, the active ingredients must not waiver from that of the name brand; however, certain components might. Those include the inactive ingredients and the time-release technology. Walsh says these don’t need to match exactly, but she assures me they are all safe.

Basically, the FDA has to approve everything, so generic drugs are safe for us. And they’re not much different than the name-brand version.

Then Why Are Generic Drugs a Thing — and Cheaper?

Here’s the origin of the generic drug: When a company creates a name-brand drug, it holds a patent on said drug for 20 years, according to Harvard Health Publishing. This patent begins when the drug is invented — not when it hits the market.

There are also exclusivity periods, which are exclusive marketing rights that can last up to seven years. These might not run in conjunction with the patent.

Once these regulations expire, other companies can step in to create their own versions of the drug — and charge less. They can do that because they don’t have to invest in research trials, marketing, advertising or distribution, a “long and costly process,” Harvard Health Publishing says.

When the generic drug hits the market, Walsh says, they help improve competition and provide different, more affordable options for the consumer.

However, it’s worth noting that when generic drugs first come out on the market, they’re usually just as expensive as the name-brand, explains Julie Howell, a Walgreens pharmacist in Lexington, South Carolina.

“A lot of the time, insurance doesn’t cover them because they aren’t in their system yet,” she says. “It takes a while, but as eventually more companies get their generics approved, the prices will start to go down.”

Different Types of Drugs, Different Effects

Does it have something to do with the placebo effect? Am I imagining it?

Your concerns are valid. Although all generic drugs are run through FDA standards, those inactive ingredients mentioned above can affect your body differently.

Howell says she gets the generic vs. name-brand question all the time.

She says that, although, the active ingredients are indeed the same, the inactive ingredients can cause different effects.

“These inactive ingredients can cause side effects or just cause the drug to be less effective,” she explains. “It’s super common with birth control, migraine meds, seizure meds and a few others.”

She says some people are simply sensitive to those inactive ingredients and have to stick with either the brand or generic version.

If you have any questions, comments or concerns about your name-brand or generic drugs, be sure to chat with your doctor or your pharmacist. I’ve had many conversations with my doctor on the matter, and she’s always happy to help out — and help me determine the most affordable option.

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She’s thrilled to have a somewhat, not-too-complicated answer to a question that’s always plagued her.