Generic Drug Savings

Why would you ever take a generic drug when you could stick with a trusted brand name? In a word: price. Generic drugs contain the same active ingredients at the same strength and purity as their brand-name counterparts, but they come at a fraction of the cost. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 billion to $10 billion a year.

How much you save is up to you. If you ask your doctor about generic drugs and shop around for the best price, you could reduce your medical expenses substantially.

How much cheaper are generic drugs?

The difference in the price between generics and brand name drugs varies widely (the retail price can vary even more). In most cases, generic drugs cost about 30 percent less than brand name versions.

Here are a few examples of brand names versus generics:
The antidepressant Prozac is now also available as the generic drug fluoxetine (the active ingredient in Prozac). Prozac costs up to $185 a month for a dose of 20 mg a day. Compare that to the generic fluoxetine, which can cost as little as $24 a month for the same dose, and saves the consumer more than $1,932 a year. The asthma drug Ventolin has a generic equivalent called albuterol. At a dose of two puffs every 4 to 6 hours, the retail cost for Ventolin is $1.44 a day. The same dose of the generic, albuterol, may cost only 69 cents a day and saves the consumer $273 a year. A 20 mg dose of the hypertension drug Prinivil costs $1.24 a day. The same dose of lisinopril, Prinivil’s generic equivalent, costs less than half that.

Why are brand-name drugs more expensive?

Companies spend millions of dollars developing new drugs. First, they screen promising candidates in the lab, test the drugs on animals, and then move on to small trials with human subjects. Finally, the companies conduct longer clinical trials with more people. Companies protect their investment by filing for patents on new drugs as soon as they’re invented.

Years later, once the patent has expired and the company has used up its right to manufacture the drug exclusively, other companies can apply to the FDA to make a generic version. Without research costs to cover, these companies can sell the generic drug at a price that’s closer to the manufacturing cost.

Do all pharmacies charge the same price for generics?

No. As a dramatic example, a reporter for WXYZ-TV news in Detroit recently compared the retail prices of several generic drugs at more than 20 local pharmacies. A sampling of the results: A month’s supply of enalapril maleate (Vasotec) cost $11.99 at one pharmacy and $82.85 at another. The price of a month’s supply of famotidine (Pepcid) varied from $10.99 to $97.99. If you’re taking a generic, it pays to shop around.

You may also pay different prices for generics if you use a drug discount card. Different drug card plans have different pricing structures based on the discounts each program has negotiated for its card holders. If you aren’t sure what will cost the least, ask your pharmacist or plan administrator for help.

If generics are so much cheaper, why does my doctor prescribe brand names?

First of all, not every medication has a generic equivalent. Also, if the exact blood levels of a medicine’s active ingredient are crucial, some doctors hesitate to switch patients from brand names to generics (in most cases, however, a generic will work just as well.) In many other cases, doctors prescribe brand name drugs because they simply aren’t aware of the potential savings.

In a survey published in the November 2000 issue of the Archives of Family Medicine, residents and faculty in family programs underestimated the cost of brand-name drugs 90 percent of the time. On the other hand, they overestimated the cost of generic drugs 90 percent of the time. Simply put, doctors usually know more about side effects and dosages than dollars and cents. Still, your doctor will likely be glad to prescribe a generic drug if one is available and safe for you to take.


U.S. Food and Drug Administration. Generic Drugs: Questions and answers. 2009.

Nolan S . What every physician should know about generic drugs. Family Practice Management. March, 2002. 9(3): 45-46.

Consumers Union. Low-cost generic antidepressants could save consumers $1,200 a year or more. February 2005. April 2008.

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