Generics: a Great Way to Cut Health Care Costs

Generics: a Great Way to Cut Health Care Costs

A great way to cut health care costs is to find a generic drug that works just as well as your expensive brand-name drug. But how can you be sure that a generic is as good as the drugs you see advertised on TV?

It may help to learn what a generic is.

Generic drugs are simply drugs whose brand-name patent has expired. They may look different because the brand-name drug is protected by trademark. They may contain different inactive ingredients (such as coloring) that have no effect on the drug’s performance. But the active ingredients that treat the medical condition are the same.

The Food and Drug Administration (FDA) requires all drugs, including generics, to be safe and effective. The FDA tests drug-manufacturing facilities routinely, and tests all generic drugs rigorously to make sure they are “bioequivalent.” That means they have the same active ingredients and can be expected to work the same way in the body as the brand-name drug. They also must have the same dosage, strength and form (such as pill or liquid).

In fact, many brand-name drug manufacturers even make and sell the generic versions. According to the FDA, brand-name manufacturers are involved with about half of all generic drug production.

Then why are generics cheaper? Patents give drug manufacturers exclusive rights to sell brand-name drugs for a number of years. During that time, they charge high prices to cover the average $800 million for research, development, getting the patent, marketing and advertising to bring each new drug to market.Generic drug manufacturers don’t have these up-front costs. Plus they compete with other manufacturers. As a result, generics cost 30 to 80 percent less than brands.

Finally, many studies show that the “new” brand-name drugs may not be safer or work better than older generic drugs. The bottom line: Generic drugs have the same therapeutic benefit, quality, purity and safety as brand-name counterparts. They help reduce drug costs while maintaining care quality. Many health insurers charge copayments for generics that are substantially lower than the copayments for brand-name drugs.

To learn more, talk with your doctor, pharmacist, other health care professional or health plan representative. If you want to find out if there are generic options for your prescriptions, Consumer Reports’ Best Buy Drugs and the Agency for Healthcare Quality and Research give cost-effective prescription options for common medical conditions.

Source:  CareOregon,, 800-224-4840
For more information:, 800-224-4840

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