Generic Drugs: What You Need to Know

Before you fill your next prescription, it is important to know that there are three types of medication that you can buy brand-name drugs, generic drugs and authorized generic drugs and understand the differences between them.

What Is a Brand-Name Drug?

A brand-name drug, also called an innovator drug, is a medication for which a New Drug Application (NDA) was submitted to the FDA for approval, supported by data from clinical trials, demonstrating that the product is safe and effective.

Newly approved drugs are generally granted a period of exclusivity or marketing rights, meaning that no other company can market the drug during a select period of time.1

Once the period of exclusivity expires, a generic version of the brand-name product may be marketed, either by the drug’s original maker (authorized generic drug) or by a competitor (generic drug).1

What Is a Generic Drug?

A generic drug is a copy of the brand-name drug that has the same dosage form, safety, strength, route of administration, quality, performance characteristics and intended use.1

Like brand-name drugs, generic drugs require FDA approval. To qualify for FDA approval, the generic version of a medication must contain the same active ingredients as the brand-name drug, although inactive ingredients may be different, and demonstrate that it is “bioequivalent” to the brand-name version, meaning that it works in the same way and provides the same clinical benefit and can reliably be used as a substitute.1

It is important to note that United States trademark laws do not allow a generic drug to look exactly like the original brand-name medication.

Why Are Generic Medications Less Expensive than their Brand-Name Version?

To bring a new medication to market, a drug company must conduct expensive animal and human clinical studies to prove that the drug is safe and effective. A company that wants to market a generic version of a drug does not have to repeat these expensive studies, except that which might be required for FDA approval, such as a bioequivalence study. Applications for FDA approval of generic versions are therefore called “Abbreviated New Drug Applications (ANDA).” This is one reason why generic medicines often cost much less than the original brand-name version. Another reason is because once more generic versions of the same drug become available, competition drives prices down.1

What Is an Authorized Generic?

As generic drugs developed by competitors of the original maker have the same active ingredients as the original name-brand version, they do not contain the same inactive ingredients as the original. Authorized generics, on the other hand, are identical to the brand-name version in every way.2

Because authorized generics are developed by the maker of the original itself (or by another company that it has authorized to do so), when you buy an authorized generic, you can pay less for a formulation that is identical to the original.2

That is why whenever you are prescribed medication, you should ask your healthcare provider if an authorized generic version exists. You can also check this FDA list of available authorized generics.

For more information about generic medications, contact your doctor, pharmacist or other healthcare provider. You can also visit the FDA Generic Drugs Program or call 1-888-INFO-FDA.