Why Is Generic Store Brand Medicine Cheaper?

You go to your local drug store for some medicine and notice that the brand name box is six or seven dollars more expensive than the generic store brand. Why is that? Does the generic brand work just as well? Oh, yes, and there’s a science behind why store brand or generic medicine is cheaper than brand name versions.

More Competition

A generic medicine is sold and distributed by many different companies, whereas brand name drugs are sold only by their originator. This means that there’s competition for generic drugs, which drives down the price.

For example, stores like Walgreens and CVS all have their own store brand version of Advil (Ibuprophen) and you might even find that one store’s version is cheaper than the other store’s product; however, Advil will usually be more expensive than either of these generic versions. 

No Repeat Clinical Trials

Generic medicines usually pop up after the licenses and patents for a certain drug have expired. There is a branch of the FDA that exclusively evaluates the efficacy of these generic drugs, but the companies don’t need to submit new clinical trials.

Drug companies that create novel medications must conduct a series of lengthy tests and human trials before they have the approval to bring it to market. The costs of all these trials are passed down to the consumer, which justifies their higher price. It’s also why they have rights for the exclusive sale of the product for a given period of time — to make up for the expenses they put out for those original trials.

Insurance Companies Prefer Generic Brands

When it comes to prescription drugs, one reason generic brands are cheaper is that you either don’t have to pay for them or you only pay a fraction of the price. The rest is paid by your insurance company.

Keep in mind, this only applies to prescription medication, not over-the-counter drugs. Things like birth control pills, which must be taken daily for long periods of time can get expensive, even if you have insurance. Having your doctor prescribe the generic version of the same pill can save you hundreds of dollars in the long run.

Same Active Ingredient

So, what exactly is the difference between generic drugs and brand name drugs? Turns out, not much, just the inactive ingredients.

The active ingredient, which is the chemical that gives the results that you want, is the same in both types of medications. When you’re out shopping, take a look at the label on the back of the pack or bottle. Compare the generic one to the brand name one. You’ll notice, for example, that Advil and store brand Ibuprofen both contain the active ingredient “ibuprofen.” The same goes for store brand versions of Benadryl, Tylenol, and other drugs.

Just as Safe

The FDA regulates the safety of generic drugs as well as branded drugs. While the active ingredient has already gone through clinical testing, the inactive ingredients must also prove to be safe. They cannot contain ingredients that give people allergic reactions or interact with any other chemicals in someone’s system.

The only real difference between store name and brand name drugs is the price that you pay for them. So, next time you have a cold, reach for that Walgreens acetaminophen instead of the more expensive bottle of Tylenol. The savings are worth it.

Sources

GoodRx
FDA