Find out just what a generic drug is, why generic drugs are so inexpensive and how you can be sure these medications are safe to use.

Having more generic drug alternatives helps people save big dollars on medication costs. The U.S. Food and Drug Administration is responsible for reviewing generic drugs before they are approved for sale and use, and the FDA is doing something to get more generic drugs on the market sooner.

What Are Generic Drugs?

The U.S. Food and Drug Administration defines a generic drug as one being identical to a brand name drug in dosage form, safety, strength, administration type (oral, injection, etc.), quality, performance characteristics and intended use. The chemical make up of a generic drug is identical to its brand-name equivalent, but generic drugs are priced at big discounts compared to brand-name drugs.

Why Are Generic Drugs so Inexpensive?

Generic drugs can be sold at much lower prices than their brand-name counterparts for several reasons:

• Generic drugs do not hold patents as brand-name drugs do.
• No research and development costs go into generic drugs because they are essentially identical to the original brand-name drugs that require massive R & D efforts to formulate and test.
• Generic drugs have no marketing costs.
• Generic drugs do not have to go through all the same clinical trials that the original medications did.

You can see how much less some generic drugs cost from the chart in Savings From Generic Drugs Purchased at Retail Pharmacies.

Why Don't All Drugs Have Generic Alternatives?

When a brand name medication is approved, the manufacturer holds a patent on that medication. This exclusivity allows the drug company to recoup the massive costs that went into developing the drug and to turn a profit. A generic equivalent cannot be offered until the patent expires.

Another factor affecting generic drug options is that major drug companies may stall a generic drug's FDA review application by using legal measures to challenge the expiration of a patent or extend patent protection on their brand name drugs.

However, many of those brand-name drug patents have expired in recent years, resulting in a huge influx of generic drug applications that have been back-logged at the U.S. Food and Drug Administration offices. To work toward streaming the generic drug approval process so more generic alternatives can be offered to consumers sooner, the FDA has launched the Generic Initiative for Value and Efficiency, or GIVE. Using the GIVE program, the FDA review process for generic drugs will be more efficient and applications will be processed faster.

Are Generic Drugs Safe?

The limited testing that generic drugs require may sound like a cause for concern. However, generic drug alternatives are the same medication that people have been using for up to 20 years already.

Do not be suspicious of a generic drug because it may be a different color or shape than its brand-name counterpart. The reason for this is that United States trademark laws prohibit the two medications from looking identical, however the two medications must have the same active ingredients.

In a recent FDA Consumer Update, Gary Buehler, R.Ph., Director of FDA's Office of Generic Drugs stated, "The standards for quality are the same for brand-name and generic products." Buehler went on to say that generic drugs "must scientifically demonstrate that their product is bioequivalent. This means that it performs in the same way as the brand-name drug."

Should You Save Money with Generic Drugs?

The decision to use generic drugs in place of brand-name pharmaceuticals is up to you and your doctor. Given the rigorous testing generic drugs undergo and the savings of up to 50% on the cost, generic drugs should be a part of your budgeting efforts whenever possible. Although any pharmacy can dispense generic prescriptions, you will often save even more at big box stores like Target, which is competing with Wal-Mart $4 generic prescriptions.

Sources:

New Initiative to Improve Availability of Generics, U.S. FDA Consumer Update, October 4, 2007.

Center for Drug Evaluation and Research, Office of Generic Drugs.