Generic version of the drug always costs significantly less than the brand name. For example, 90 tablets of popular medication Tramadol cost $85, while 90 tablets of brand name Ultram cost $205.

According to the U.S. Food and Drug Administration (FDA), all drugs, including brands and generics, must work well and be safe. However, there is some controversy about the safety and effectiveness of some generic drugs. Some physicians continue to prescribe branded medications when generics are available, believing that the branded formulations are superior. In addition, some patients are uncomfortable with the idea of taking a “substitute”.

What is a brand name drug?

Every business has the right to promote its brand. After a pharmaceutical company develops a drug, it is granted a 20-year patent, which means that no other company can make it for the entire duration of the patent. When the drug is approved by FDA, it is given a generic (official) name and trade (proprietary or brand) name. Brand name medication can only be produced and sold by the company that holds the patent.

Usually, about 10 years elapse between the time a drug is discovered (when the patent is obtained) and the time the it is approved for human use, leaving the company only about half of the patent time to exclusively market a new product. Without fair compensation from meaningful patent protection, research and development work would slow or stop.

What are generic medications?

When the patent of a brand name medication expires, other companies may produce and sell a generic version of the drug. All generic drugs must be reviewed and approved by the FDA before they can be marketed.

FDA requirements for generic drugs:

• Must have the same active ingredients and the same labeled strength as the brand-name product.
• Must have the same dosage form (for example, tablets, liquids) and must be administered in the same way.
• Manufacturers must show that a generic is bioequivalent to the brand-name drug, which means the generic version delivers the same amount of active ingredients into a patient’s bloodstream in the same amount of time as the brand-name drug.
• The labeling must be essentially the same as the labeling of the brand-name drug.
• Generic drug manufacturers must fully document the generic drug’s chemistry, manufacturing steps, and quality control measures.
• Firms must assure the FDA that the raw materials and finished product meet specifications of the U.S. Pharmacopoeia, the organization that sets standards for drug purity in the United States.
• Firms must show that a generic drug will remain potent and unchanged until the expiration date on the label.
• Firms must comply with federal regulations for good manufacturing practices and provide the FDA a full description of facilities they use to manufacture, process, test, package, and label the drug. The FDA inspects manufacturing facilities to ensure compliance.

Are generic medications as safe and effective as brand name medications?

The term generic, when applied to foods or household products, is used to describe a less expensive, sometimes less effective or lower quality copycat version of a brand name product. However, most generics, although usually less expensive, are generally as effective and of the same quality as the brand-name drug. But not always!

According to the FDA, all drugs, including brands and generics, must work well and be safe. The FDA applies the same standards for all manufacturing facilities, and many companies manufacture both brand-name and generic drugs.

In fact, the FDA estimates that 50% of generics production is by brand-name companies. They may make copies of their own medications or another company’s products and then sell.

Despite the fact that the active ingredient in a generic medication is the same as in the brand name counterpart, small differences could effect how they work in your body. For some people, these slight differences may cause the drug to be less effective or lead to side effects.

Several health-related organizations, including the Epilepsy Foundation of America and the American Thyroid Association, have raised concerns about the mandatory use of generic medications proposed by some states or required by health plans to save money. An example of the controversy about generic versus brand name medication is levothyroxine, used to treat people with hypothyroidism. Since many people with low thyroid are sensitive to very small changes in the dose of their medication, switching between brand name and generic versions of levothyroxine can cause symptoms of too little thyroid medication or side effects from too much medication.

If brand-name drugs and generic drugs are equivalent, why do they act and look different?

Although FDA requires that generic drugs have the same risks and benefits as their brand-name counterparts, the fact is many types of blood pressure medications, heart medications, hormones, antiepileptic drugs, antidepressants, many liquid form medications and some antibiotics are just not as effective as the brand.

The following differences explain why the generics may cause some different effects:

1. Bioavailability

Bioavailability is the rate and extent to which the active ingredient is absorbed from a drug product and becomes available at the site of action. Bioequivalence is a comparison of products with respect to their bioavailability. Bioequivalency means that the same amount of active ingredient is delivered to the body by the generic medication as by the brand-name.

The FDA requires that the generic medicine have a comparable bioavailability to that of the brand-name drug, but NOT the exact bioavailability. Legally, bioequivalence of different versions of a drug can vary by up to 20%, because for most drugs, such variation does not noticeably alter effectiveness or safety. This means that one generic may have achieved values that lie between 80% and 100% and another values that lie between 100% and 125%.

Although generic drug approval requires demonstration of chemical equivalence and bioequivalence, these equivalencies do not guarantee therapeutic equivalence (the same clinical effect and the same safety profile). And actually several generic psychoactive medications are less effective than their brand-name counterparts. For drugs where there is a very narrow therapeutic band, for example, where a patient gets antiseizure medication, plus-or-minus twenty percent may not be appropriate.

Remember, there are “parameters” for bioavailability that must be met, not an exact number.

2. Inactive ingredients

Other common problem is that the inactive ingredients are different. Inactive ingredients such as binders, fillers, coloring and flavoring, are allowed to differ but must occur in a ratio to the active compound similar to that of the reference drug. It is assumed that these inactive ingredients will not alter the performance of the product. However, since these ingredients may contain lactose or gluten products, they could change gut motility and absorption in sensitive patients.

3. Manufacturing processes, Technology

Wellbutrin XL is a well-documented case where many people react to the generic differently. This is not because the drug itself is less effective, but because XL is the Extended Release version, and the generics use a slightly different release technology.

Does every brand have a generic version?

No. Sometimes a drug is too hard to duplicate, or adequate tests are not available to prove that the generic acts the same as the brand. Sometimes the market for the drug is too small that producing another version does not make business sense.

Why are generic drugs less expensive than brands?

Generics often cost 30% to 50% less than brand name drugs.

The main reason companies can market their generics at lower prices is that they don’t face the same development costs as brand-name companies. The process of research, development, marketing and promotion can cost hundreds of millions of dollars! Without the startup costs for development of the drug, generic manufacturers can afford to make and sell it more cheaply.

Under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, generic drug companies don’t have to repeat expensive clinical trials.

In addition, many generics are well-established, frequently used medications that do not need to bear the costs of advertising.

Also, there is strong competition in the U.S. When multiple companies begin producing and selling a drug, the competition among them can also drive the price down even further.

These days, faced with competition from generics, pharmaceutical companies often manage to come up with variations on brand-name drugs that are going off-patent. After FDA approval, they market the new versions as state-of-the-art. The most notorious of these cases was the introduction of Nexium, that is a slightly altered version of Prilosec, which was about to go off-patent.

So are generics as good as brand name drugs?

This debate has gone on for years. Will there be a definite answer? Unlikely. Why not? Because it would require the generic manufacturers to conduct well controlled double blind studies to prove their medications are as good as the “brand name” product. That is just not going to happen. Why? The cost to do such a study would in all likelihood dramatically increase the cost of a generic product and there is always the risk to the generic manufacturer that they discover that their generic does not stack up to a brand name drug.

Reasons for choosing the brand

There are a few reasons for choosing the brand-name drugs rather than the generics:

• For critical dose medications with a narrow therapeutic range. For those with epilepsy, asthma, diabetes, heart ailments, mental disorders, and thyroid problems very precise control of the dose may be important, and switching drugs may upset a delicate balancing act.
• The medicine may be extremely hard to produce. There are very few drugs for which a generic equivalent has not been established. One is levothyroxine (Synthroid) – a thyroid hormone replacement used to treat hypothyroidism and goiter (enlargement of the thyroid gland). That does not mean that the brand is better than the generic, just that the brand and generic do not have an established equivalence. The difficulty in establishing equivalence may be that the original is formulated so uniquely that it’s hard to duplicate, or that the drug is normally absorbed so erratically that equivalence is hard to establish.

Electronic Orange Book provides guidance about which drugs are interchangeable.