What’s the Difference Between Generic vs. Brand Name Prescription Drugs?

Madeline Hlobik
Madeline Hlobik16 Sep 2021

Brand name prescription drugs are sold by drug companies with a specific name and are patented. After the brand name prescription is made, similar generic prescription drugs can be created with the same active ingredient as the brand name drug. However, the key difference between these two drugs is that generic prescription drugs will cost much less than brand-name drugs.

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The Difference Between Generic vs. Brand Name Prescription Drugs

Despite having the same effectivity, generic and brand name prescriptions differ greatly in that generic drugs tend to be significantly cheaper than brand name drugs. Additionally, according to Dr. Leann Poston, “generic drugs may differ from brand names in size, shape, and color.” These defining characteristics are what set generic and brand-name prescription drugs apart the most. 

Differences in Cost

According to Dr. Jacob Tiab, “in general, there is no difference, as far as chemical formulation and efficacy of the drug.  There can be a big price difference, though.” In fact, in 2020, it was estimated that Americans spent approximately $358.7 billion on prescriptions, with a majority being spent on brand-name drugs. This high spending on prescriptions is only supposed to increase; however, Americans can save $8 to $10 billion because of the generic drugs. 

On average, generic drugs cost 80 to 85% less than brand-name drugs. This is because brand-name drugs are protected by patents, which prohibit others from producing and selling the same drug.

Additionally, generic drugs tend to cost less because they do not have to repeat studies that the brand-name drugs had to show effectiveness. Because of these cost reductions in the research process, generic drugs will have the same clinical effects as brand-name drugs, just at a cheaper cost. For further comparisons of the cost difference between generic and brand-name drugs, look at the table below. 

The Cost Differences Between Generics vs. Brand Name Drugs

Generic Drug Name

Average Generic Drug Cost

Brand Name Drug

Average Brand Name Drug Cost

Acetaminophen with codeine$12.99Tylenol with codeine$236


Difference in Appearance

Because of United States Trade laws, generic drugs and brand-name drugs cannot look exactly alike. To ensure this, generic drugs often have different non-active ingredients, such as dyes or preservatives, than brand-name drugs. These subtle differences can determine the size, color, or shape of a generic drug. Thus, it is through these different inactive ingredients that generic drugs can look unique compared to brand-name drugs.

Because of these appearance variances between generic and brand name drugs, following your physician’s prescription as ordered is important. Depending on your medical history, some inactive ingredients in a generic drug may cause your body to react in a different way than the brand-name drug.

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What a Generic Drug is

Generic drugs are medications devised to be the same as an already-created market brand drug, as it will hold the same active ingredient as a brand name drug. Thus, generic drugs will be the same as brand-name drugs in dosage, safety, strength, route of administration quality, and intended use. Because of this equivalence, generic prescriptions will provide the same effectiveness and clinical benefit as brand-name drugs.

What a Brand Name Drug is

Brand name prescription drugs are those that are the first of their kind. Once the research and development conclude, the FDA will test and approve a drug. While this is occurring, the company creating the drug can apply for a patent and provide it with a brand name. Until the patent expires, no other companies are allowed to know the patented product’s formula. 

Generic vs. Brand Name Prescription Drug Frequently Asked Questions (FAQs)

Understanding the differences between generic and brand-name prescription drugs can be confusing. To better understand what each is and when to use either one, check out some of the answers we have composed below to commonly asked questions. 

Should I use generic or brand-name prescription drugs?

A good rule of thumb to go by is to follow what your doctor recommends for you based on your medical history. Generic drugs tend to be just as effective as brand-name drugs. Thus you normally can use either one and receive the same effect. However, if you have certain medical conditions, some generic drugs may cause your body to have adverse reactions due to the different inactive ingredients. 

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Are generic drugs safe to use?

Yes— generic drugs are very regulated and have to undergo various testings before being put onto the market. In fact, according to Pharmacist James Lott, the “FDA has an approval process for both brands and generics which makes the drugs go through rigorous testing to make sure the drugs are practically the same. The only variance is typically in branding and costs.” 

Initially, the FDA will test the generic drug to ensure that they provide the same benefits as brand-name drugs and that the different inactive ingredients are safe. They will also check how long an unused drug will last before it breaks down, how durable the drug’s container is, and whether the generic drug manufacturer can correctly make this drug. After it is approved, the FDA will continue to inspect and monitor the drug company to ensure safety.

Does every brand-name drug have a generic drug?

No, not every brand-name drug has a generic drug counterpart. When drugs are first made, they have patents that protect them from being reproduced by anyone else for about 17 years. Once the patent expires, though, other companies can begin testing and selling their generic version of the drug. 

Do my insurance cover brand name and generic prescription drugs?

This is a question that is usually dependent on the type of health insurance you have. However, typically, your insurance will tend to favor covering generic drugs instead of brand-name drugs.

With some plans, you may be able to choose the brand-name drug. The only catch is that you may simply pay more, such as the difference between the generic and brand name drug in addition to the price of the generic drug. In some cases, though, you may have to go through step therapy before your insurance company allows you to purchase the brand-name drugs.

Bottom Line

Generic and brand-name prescription drugs contain the same amount and type of active ingredient and tend to have the same effectiveness and safety. However, the main difference between each is that generic drugs will be less expensive than brand-name drugs due to the lack of patent and amount of research needed to be performed. They will also differ in appearance because generic drugs will use different inactive ingredients than brand-name drugs.

Mira can play an important role in helping you lower the cost of both generic and brand name prescriptions altogether. By joining Mira today, you can receive access to up to 80% off on various prescriptions for just $45 per month. 

Madeline Hlobik

Madeline is a Senior at UCLA majoring in Human Biology & Society with a minor in Spanish. She's currently a Healthcare Research Analyst at Mira, writing content for the blog to help the public better understand certain medical issues, technologies, testings, and the importance of healthcare.