Generic Drugs Help Save You Money

Is the cost of prescription medications taking a big part of your budget? We have a partial solution — generic drugs.

Before you make a decision to switch, you probably have some questions about generic drugs. Here are some of the most common questions we get about brand-name and generic drugs.

1. What is a brand-name drug? A brand-name drug is researched and created by a pharmaceutical (drug) company. The company conducts many tests and research studies before it submits the drug to the Food and Drug Administration (FDA) for approval. If the new drug receives FDA approval, it is introduced to the marketplace, usually through advertising in magazines, professional journals and television. Generally, the company that developed the medicine has a patent to market the drug exclusively for ten years. In other words, no other company can sell the same medication during this period. When the patent expires, other pharmaceutical companies can apply to the FDA for approval to market the same medication as a generic.
2. What is a generic drug? A generic drug is an FDA approved copy of a brand-name drug. It does not have the same brand-name, but both the generic and brand-name medication have the same "generic" name and chemical compound name. The FDA reviews each generic medication to ensure that it is the same as the brand-name drug in safety, effectiveness and quality, and that it works the same way in the body as the brand-name drug. The generic drug is for the same use as the brand-name drug. That means that the generic drug treats the same conditions, like high blood pressure. It must also be in the same form, such as a pill or tablet, liquid, cream, etc. However, by US law, a generic medicine cannot look exactly like the brand-name medication. For example, the brand-name drug and the generic drug cannot be the same size pink tablet.
3. Are generic medications as safe as brand-name medications? Yes. Both generic and brand-name drugs require FDA approval before they can be offered to consumers. Brand-name and generic drug manufacturers must meet the same standards of good manufacturing practices. The FDA conducts thousands of inspections each year to monitor how all medicines, generic and brand-name, are made, processed, tested, packaged and labeled.

Talk To Your Physician

Like the rest of us, most physicians are more familiar with brand-name drugs that are advertised than with the generic names of the drugs. What's more, the cost of your medicines may not be your physician's number one concern when you go to his or her office. Normally, your physician is focused on your medical care. Further, it is difficult for a physician to know all the prices for various medications or all the different benefit plans of their patients. As a result, your physician may not know how much your prescription medications cost, or what potential savings there may be when you use a medication that is available as a generic, as compared to a brand-name drug.

Talk to your physician about switching your brand-name medications to drugs that are available as generics. If your physician agrees, he or she will need to write a new prescription for the generic drug, or ask your physician to allow a generic substitution when you get a prescription filled for a drug that has a generic equivalent.

There are not always generic equivalent drugs available to substitute for a brand-name drug. So you may want to ask your physician if there is a generic alternative drug that could treat your condition and be appropriate for you. A generic alternative is a therapeutic alternative that is a generic drug used to treat the same condition. It is a generic drug that has been approved for the treatment of your condition, but it is not the generic equivalent of the brand-name drug you are currently taking.

Saving You Money

You can save money when you use generic drugs under both Standard and Basic Option.

Under Standard Option, when you use a Preferred retail pharmacy and purchase generic drugs, you pay 20 percent of the Plan Allowance. You pay 30 percent for brand-name drugs. This is a savings of 10 percent in your out-of-pocket costs. And the 10 percent co-insurance is calculated on the much lower cost of a generic drug, rather than a brand-name drug. If you switch from certain brand-name drugs to specific generic drugs, your first four generic prescription fills or refills per drug per calendar year are free. The brand-name drugs and generic drug replacements are listed on page 92 of the 2011 Service Benefit Plan brochure.

You can also save if you have Standard Option and use the mail service pharmacy. You pay a $10 copayment for each generic drug verses a $70 copayment for the first 30 brand-name prescriptions filled each calendar year. That's a large out-of-pocket savings.  In addition, you can switch to generics under the Standard Option Generic Incentive Program and save more money.

Basic Option also provides savings when you use generic drugs. You pay a $10 copayment for generic drugs when you use a Preferred retail pharmacy. There is a $40 copayment for Preferred brand-name drugs and a 50 percent coinsurance, or minimum of a $50 copayment, if you purchase Non-preferred or non-formulary brand-name drugs. So your out-of-pocket savings are at least $30 when you use generic drugs. There are no mail service pharmacy benefits under Basic Option.

Next Steps

Talk to your physician about switching to generic drugs. Then enjoy the savings.

Written by Paula Spurway, Blue Cross and Blue Shield Association. Resources: 2011 Blue Cross and Blue Shield Service Benefit Plan brochure and www.fepblue.org , pharmacy benefits.

Page last updated: December 16, 2011