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Generic vs. Brand-Name Drugs: How much are you really saving?


doi: 10.1097/01.NNN.0000299038.29973.25
Department: Penny Wise

Generic vs. brand-name drugs: How much are you saving?

Kimberlee Roth is a freelance health writer. She is a regular contributor to the Chicago Tribune and other health publications and is the author of Surviving a Borderline Parent (New Harbinger, 2003).

If you've experienced sticker-shock at the pharmacy recently, you're probably pondering ways to cut the costs of the medicines you use. One answer, widely touted, is switching to generic versions of brand-name drugs. The price tag on generics is less likely to have you muttering, “How much?” as you look at your receipt. But generic drugs are not always the best medicine. Here are some things to consider before making the switch.

“Generics” contain the same active ingredients as the brand- or trade-name drug, even though they don't go by the same name. For example, simvastatin is the generic version of the cholesterol-lowering medication Zocor.

Generic options exist for about three-fourths of all FDA-approved drugs, according to the Kaiser Family Foundation, a health-research organization, and they typically cost between 13 and 94 percent of the brand price, depending on how many companies produce them. A generic drug made by 10 competitors costs about 26 percent of the brand, according to data from 1999 to 2004.

It's no surprise then that the number of generic prescriptions dispensed grew by 13 percent from 2005 to 2006. That's due in part to cost-saving efforts by third-party payers, including government programs such as Medicare and Medicaid, employers who provide health insurance, and insurers themselves.

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Generic drugs can sell for less because their manufacturers don't have to go through the same research and development process that the drug's original maker did. That R&D costs big bucks, which is why patents on the drugs these companies create protect them from competition during the life of the patent, usually 20 years. Once the patent expires, other companies are soon permitted to make and market very similar medicines.



“Generic drug manufacturers can bring a drug to market with a much lower investment than it takes for a company to bring a ‘new chemical entity’ to the market,” says Brian Alldredge, Pharm.D., professor of clinical pharmacy and neurology at the University of California, San Francisco. “So generic manufacturers can charge less for their product and still make a profit.”

According to U.S. Food and Drug Administration rules, generic drugs must contain the same active ingredients as the brand. The inactive ingredients can vary, however, as can color, shape, or tablet size. Generic versions must also: be identical in strength, dosage form, and route of administration; have the same indications for use; meet the same requirements for strength, purity and quality; and be produced under the same manufacturing standards.

The generic must be “bioequivalent” to the brand, which means that the same active ingredients are released into the bloodstream at nearly the same rate, in nearly the same amounts and, over time, result in much the same levels in the blood as the brand. The FDA requires firms making generic products to test them, but testing is not as extensive as the clinical trials the original developer was required to perform.

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But there's more to the story than cost alone. A drug that is deemed bioequivalent does not necessarily have the same effect on the patient or condition being treated. This is especially true with drugs where there's a fine line between not having enough in your system to achieve the desired level and effect and having too much, which can also spell trouble.

The anti-seizure medicine phenytoin (Dilantin) is a good example, says David Charles, M.D., associate professor and vice-chair of neurology at Vanderbilt University. “It's very individualized,” he says. Even a slight change in blood concentration levels can mean a patient might experience breakthrough seizures. “The cost of that—patients presenting to the E.R., possibly injuring themselves and others—far exceeds any cost savings,” he says. In fact, the American Academy of Neurology issued a statement in 2006 that opposes the generic substitution of anticonvulsant drugs for epilepsy without the approval of the patient's doctor.

This is not all to say that generic drugs are unsafe, says Dr. Alldredge. “It's not that trade-name drugs are good and generics are bad,” he says, “only that people should be aware of the possibility of a different response. This holds true for any new prescription, whether or not there has been a switch [from] trade to generic. In fact, for some branded drugs, the differences between two different batches of the same drug might be greater than the difference between that drug and a generic.”

Consistency is the key, adds Dr. Charles. “The patient has to work carefully with his or her pharmacist to get a stable and consistent supply of medication.”

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Take a look at your medicines whenever you get a refill. If they look different, the pharmacist may have filled your prescription with medication from a different source. Confirm that you have the correct medication first. Assuming no error, be on alert for any changes in how you feel. See your doctor if you experience worsening or new side effects.

Know your state's rules about generic substitution, and know what your health insurance policy says about drug coverage of brand-name and generic drugs. “Pharmacists are often mandated to fill a prescription with either a trade or generic drug based on a patient's insurance,” says Dr. Alldredge.

Most importantly, talk with your doctor about whether the brand-name drug is medically necessary in your situation; doctors can specifically request that the pharmacist fill a prescription with the brand. Be aware that, depending on your drug coverage, you may have to pay more out of pocket for the trade name.

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If your doctor prescribes a new drug or different dosage, ask if she has any samples you can try. Pharmaceutical sales reps often give doctors free samples for just this purpose. It can save you a trip to the drugstore as well as wasted money if the new medication turns out not to work for you.

Some pharmacies will match competitors' prices, so be sure to ask about this if you find a lower price on the same drug and dose somewhere else—even at another location of the same chain.

Check with the pharmacies at local buying clubs, such as Sam's Club and Costco. (You don't have to be a member to use the pharmacies at these two clubs.) Prices may be lower than conventional retail pharmacies.

Don't assume you'll get the best price if you use your drug coverage. It's important to shop around among local pharmacies and compare their prices to what you would pay using your insurance benefits.

Some drug manufacturers—of both brand and generic medications—offer assistance programs for patients in financial need. The following Web sites provide lists of such programs:


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