What’s the difference between brand name and generic drugs?

During the Medicare webinar I presented yesterday for A.D. Banker & Company, we were talking about Medicare Part D and prescription drugs. When I explained the differences between brand name and generic drugs, nearly everyone was amazed that there were differences–they thought brand name and generic drugs had to be the same, but only with different names. Wrong.

One of my students suggested I write a blog post about the subject, so, thanks to her, here is some information you may not have known:

Brand name drugs are designed and manufactured by pharmaceutical companies that obtain patents for the drug. Once the company files for the patent, no other company can manufacture the drug for the term of the patent, which is 20 years from the date of filing. These drugs are issued two names: the brand name and a generic equivalent. For example, Tylenol® is the brand name drug and its generic equivalent is acetaminophen.

Generic drugs are similar, but not identical to brand name drugs. They’re required to have the same active ingredients and different inactive ingredients. Once the brand name drug’s patent expires, other companies are able to sell the generic equivalent. That’s why your RX migraine tablet is blue and round one month, and a different shade of blue and in an oblong shape the next month–your pharmacist used generic drugs from different manufacturers when filling your prescription.


Brand name and generic drugs must:

a) Have the same ingredients

b) Have the same dosage strength and form

c) Be administered in the same way

d) Deliver similar amounts of the drug to the bloodstream


Brand name and generic drugs:

a) Must look different, as required by law

b) Must have different inactive ingredients

Generics may vary by manufacturer and usually cost less than their brand name equivalents because much the costs of R&D have been recouped by the original manufacturer during the 20-year term of the patent. Once multiple companies are legally permitted to sell the drug, the single company holding the patent now has competition, which causes the price to drop.

Sometimes the difference in inactive ingredients affects a patient, either because of their interaction with other drugs being taken or side effects. In this case, a doctor might prescribe the brand name drug, rather than its generic equivalent.

Click here to see what the FDA has to say about generic drugs. Obviously, I am not a doctor or pharmacist and you should direct your medical inquiries about the differences between brand name and generic drugs to the appropriate medical professional.

I hope you found this information interesting. Bet you didn’t know how easily so many things in our society affect the cost of insurance!


Published by

Linda McHenry

Linda is an insurance CE provider, course developer/writer, and instructor. She founded Faulkner Education Services in January 2006. She is also a novelist.

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