The Truth About Prescription Drugs


The Truth About Prescription Drugs

Given the brainpower and the billions of dollars the pharmaceutical industry devotes to developing new medicines, you’d think the latest brand-name drug is always the best for whatever ails you, despite the higher price tag.


Studies say it isn’t necessarily so.


In July 2007 the nonprofit Consumers Union published an analysis of 11 diabetes drugs. It reported that newer products, which aren’t yet available as generics, are no safer or more effective than older medicines, although they “cost many times more.”


The study shored up the U.S. Food and Drug Administration’s vigorous support of generics. It also generated new heat in the conflict between the pharmaceutical giants that make newer, branded drugs and the government, public-interest groups and insurers, which recommend generic drugs as a cost-saving measure.



The Rise Of Generic Drugs


It’s hard to believe, but aspirin, introduced in 1899, was once a trademarked product. In the 1920s the maker of Bayer Aspirin fought unsuccessfully to prevent generic aspirin from going to market.


Until the Food and Drug Act was passed in 1906, consumers had no assurance that any medicine – branded or not – was pure, safe, correctly labeled or effective. Legislation passed in the 1930s through the 1950s toughened the requirements that companies prove their drugs were safe. And in 1962, Congress passed laws that required manufacturers to prove their medicines safe and effective before they were sold. Both branded and generic drugs now had to undergo extensive testing.


In 1980 the first edition of what’s called the Orange Book was published. Updated monthly and now available online, the Orange Book lists all approved prescription and nonprescription drugs and indicates the availability of all generic equivalents.


Four years later the Hatch-Waxman Act eased the introduction of non-branded drugs by allowing generic manufacturers to use and reference the original drug-maker’s research when they file with the FDA to sell a generic copy, making it much cheaper to produce generics.


Generics accounted for 63 percent of U.S. prescriptions filled in 2006, according to drug research firm IMS Health Inc.


More than 13,000 prescription drugs are currently available, reports the U.S. Office of Personnel Management, and about 50 percent have generic equivalents.



What’s The Difference Between Generic And Branded Medicines?


The short answer is virtually none.


By law, generics must be identical copies of innovator drugs (the original branded versions, also called pioneer drugs) in terms of safety, effectiveness, quality, dosage and performance.


As the National Institute for Health Care Management (NIHCM) Foundation put it in a 2002 report, each generic drug “contains the identical active ingredient or ingredients as the innovator drug in the same amount and behaves in the body in the same way. For all practical purposes they are the same drug.”


The FDA says generics are:

  • Safe
  • Equally potent and effective
  • As quick to act in the body
  • Made in factories with identical safety and manufacturing standards

In fact, about half of all generics are made by the same companies that produce and sell the branded version.


But despite having the same active ingredients, generics and branded medicines will look and even taste differently because different colors, flavors, binders and other inactive ingredients are used. U.S. trademark laws don’t permit generics to look like their branded equivalents.


The stringent FDA drug-review process for generics is “much the same as new, brand-name drug review,” says the agency.


Among other things, makers of generic drugs must:

  • Prove that generic drugs are bioequivalent, which means that the active ingredient works just as it does in the brand, and as quickly
  • Provide detailed documentation of a drug’s chemistry, manufacturing process and quality-control procedures
  • Show that the raw materials and finished drug meet the standards of the U.S. Pharmacopeia
  • Meet all federal regulations for manufacturing practices, with proper facilities for making, testing, packaging and controlling the medicine

In addition, as with the makers of branded drugs, generic manufacturing sites are inspected before drug approval and periodically afterward, and the quality of the product is monitored.


Manufacturing facilities for brands and generics must meet the same standards, and the FDA conducts nearly 300 inspections each month, on average.



What’s The Cost Difference Between Generic And Branded Medicines?


Generics are usually 30 percent to 60 percent cheaper than branded drugs, according to Caremark, a national mail-order pharmacy.


The Congressional Budget Office estimates that generics save consumers $8 billion to $10 billion annually.


Here are some sample price comparisons from the online pharmacy

  • 30 pills of Celexa, a popular antidepressant, in 20-mg strength, cost $86.39; the same prescription filled with generic citalopram hydrobromide costs $39.99
  • Glucophage, the most popular diabetes drug in the U.S., runs $139.97 for 180 pills, 500 mg; the generic equivalent, metformin HCl, is $85.99
  • Zocor, a statin drug used to treat high cholesterol, is $404.97 for 90 pills, 20 mg; simvastatin, the copy, costs $73.97

We cite’s prices merely as examples from a large retailer – not to recommend that you order from it or any particular company. The cost of drugs varies greatly from one pharmacy to another. Comparison shop before filling a script, especially one you’ll be taking for an indefinite time.



Why Is There Such A Price Discrepancy Between Brands And Generics?


According to the U.S. Office of Personnel Management, discovering and developing just one new medicine costs an average of $500 million and takes 12 to 15 years.


Drug pioneers are rewarded with patents that enable them to be the sole suppliers of a new drug for a period of 17 years, with possible extensions of one to six years. Naturally, being the only seller of a drug means a company can charge more, and not until the patents expire can manufacturers make and sell generic copies.


When you buy a branded drug, you’re also paying for the company’s investment in marketing. In 2006 alone drug companies spent $5 billion in direct-to-consumer advertising, Nielsen Media Research says.



Which Should You ChooseBranded Or Generic?


In almost all cases, generic is your best bet – but there’s one caveat.


Of the thousands of generic drugs listed in the FDA’s Orange Book, 96 percent are considered bioequivalent and therapeutically equivalent. In other words, they’re considered to work just like the brands they replace.


What about the other 4 percent? In most cases, these are “older drugs on which modern tests have not been conducted,” says the NIHCM Foundation’s 2002 primer on generic drugs. A few of those drugs are considered nonequivalent because the body is extremely sensitive to minuscule variations in the dose – in other words, they have what’s called a “narrow therapeutic index.”


Over time, stricter FDA rules and better testing have significantly reduced the percentage of nonequivalent drugs. It was 10 percent in 1990, says the NIHCM primer.


If you know the name of a drug, you can look it up in the online version of the Orange Book to see whether the available generics have been found bioequivalent and marked with a “therapeutic equivalence evaluation code” beginning with the letter A. That means there are no known or suspected bioequivalence issues or that any actual or potential problems with bioequivalence have been resolved.


If a drug’s code begins with a B, it means “actual or potential bioequivalence problems have not been resolved by adequate evidence,” according to the Orange Book. After completing its investigation and review process and being satisfied, the FDA may change a drug’s B code to an A.


In a handful of cases, the FDA and certain scientists disagree about whether generics are truly bioequivalent. A few examples include clozapine, used to treat schizophrenia; procainamide hydrochloride, for irregular heartbeat; warfarin, a blood thinner; and phenytoin, used to prevent seizures.



When Should You Ask Your Doctor About Generics?


Whenever your doctor prescribes medicine, it’s smart to have a brief discussion about brand versus generic.


Talk with her about whether there’s any reason not to choose a generic. She may be familiar with new research on a given drug or she may have preferences based on her clinical experience. If she recommends a brand, ask why and whether the drug is one with a narrow therapeutic index.


All 50 states now have laws regulating when generic drugs can be substituted. And in many cases a pharmacy is required to substitute a generic unless the physician has specified that the brand must be dispensed. If you’re in doubt about what’s been prescribed or whether a substitution is appropriate, talk with your doctor, pharmacist or both.


Bottom line: Today’s drugs, both generics and brands, are safer and more rigorously tested than ever. In almost all cases there’s an effective and less expensive generic available – but it’s up to you to work with your doctor to make an informed decision.



For More Information


To learn more, check these government-sponsored sites.


The online Orange Book (Approved Drug Products With Therapeutic Equivalence Evaluations), updated regularly by the FDA:


The home page for the FDA’s Office of Generic Drugs:

Courtesy of