What You Need To Know About Generic Drugs

You've probably been hearing about generic drugs for a long time now. Maybe youve even taken them for a health condition.

Most people know that generic medicines are cheaper than their brand-name equivalents, but some of the particulars may be unclear. Let's answer some common questions many people have about generic drugs.

Q. What exactly does the term "generic drug" mean?

A. A generic drug is a medication that contains the same active ingredients as a brand-name drug. The generic is a copy of a brand-name drug in terms of strength, quality, safety and usage.Generic drugs are safe, effective and approved by the Food and Drug Administration (FDA).

Q. Are generic drugs as effective as the brand-name ones?

 A. Yes. Because the FDA requires the active ingredients to be the same, generic drugs perform the same actions in the body as brand-name drugs. Generics have been tested to make sure that they work in the body the same way brand-name drugs do.

Q. Why are generic medicines cheaper?

A. Generic drugs cost less because their manufacturers don't have to pay the investment costs that the original developer of the drug did when the medicine first appeared on the market. Brand-name drugs are protected by patent; when the patent expires, competitors can apply to the FDA to produce generic versions of that medication. Once generic drugs are approved, competition keeps prices down.

Q. How much can I save using generic drugs instead of the brand-name product?

A. According to the FDA, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies. It's an even higher figure when you include in-hospital generic use.

Standard Option: When you use a Preferred retail pharmacy to purchase generic drugs, you pay 20 percent of the Service Benefit Plan allowance. For brand-name drugs, you pay 30 percent. When you participate in the Standard Option Generic Incentive Program for Standard Option, you can save even more. We will waive your 20 percent coinsurance when you switch from certain brand-name drugs to specific generic drugs. See page 92 in the 2011 Service Benefit Plan brochure for more information about the Standard Option Generic Incentive Program.

If you take a medication regularly on a long-term basis, you can save the most money by ordering a 90-day supply of a generic drug through our Mail Service Pharmacy Program. With Mail Service prescriptions, the copayment for generic drugs is $10. For the first 30 prescriptions for brand-name drugs, the copayment is $70. We also waive the copayment amount for the first four prescriptions or refills for generic drugs purchased from the mail service pharmacy when you switch from certain brand-name drugs to specific generic drugs as discussed on page 92 of the 2011 brochure under the Standard Option Generic Incentive Program.

Basic Option: Basic Option benefits for generic drugs purchased at Preferred pharmacies are paid in full after a $10 copayment. You pay $40 for Preferred brand-name drugs. For Non-preferred brand-name drugs, you pay 50 percent of the Plan Allowance with a $50 minimum. Basic Option benefits are not available for prescription drugs purchased at a Non-preferred pharmacy.

Basic Option benefits do not include a mail service pharmacy.

Please refer to Section 5(f) of the 2011 Service Benefit Plan brochure for more information about benefits for generic medications.

Q. Doesn't my doctor decide which medicine I should take?

A. It's always a good idea to ask your doctor or other health provider whether there is a generic version available of the medication you need and if it is right for you.

Q. Is every drug available in a generic form?

A. No. Brand-name drugs usually have patent protection for 20 years. This provides legal protection for the company that paid the initial costs to develop the new drug. Once the patent expires, though, other drug companies can produce competitive generic versions of the drug after they have been thoroughly tested by the manufacturer and approved by the FDA.

Q. Why do the drugs look different if the brand-name and generics have the same active ingredients?

A. Generic drugs cannot look exactly like their brand-name counterparts, according to U.S. trademark laws. Although generic drugs must duplicate the active ingredients of the brand-name drugs, colors, flavors and other inactive ingredients may differ.

Q. Are generic drugs made with lower standards than brand-name drugs? Aren't brand-name drugs more effective than generics?

A. Not true at all. FDA-approved generic drugs must meet the same rigid standards as the original drug. For a generic medication to get FDA approval, it must:

• Contain the same active ingredients as the original ("innovator") drug - Be identical in strength, dosage form and route of administration.
• Have the same usage indications.

• Meet the same requirements for identity, strength, purity and quality.
• Be manufactured under the same strict standards of FDA's good manufacturing practice regulations required for innovator drugs.

January 2011. Becky McEvans, McEvans Communications. Resource: 2011 Blue Cross and Blue Shield Service Benefit Plan brochure.

Page last updated: December 28, 2011