Your plan makes available hundreds of generic and brand-name prescription drugs in every drug category. And, while generic drugs might not garner as much attention as brand-name prescription drugs do, they can play an important part in helping your plan members manage their medication costs.
What are generic drugs?
Generic drugs are copies that one company makes of a brand-name drug that was developed by another company, after that company’s patent protection has expired. Generally, generic drugs sell at lower prices.
Before approving a generic drug for use, the U.S. Food & Drug Administration(FDA)’s Office of Generic Drugs follows a rigorous review process to make sure that, compared to the brand-name drug, the proposed generic drug:
- Contains the same active/key ingredient
- Has the same strength
- Uses the same dosage form (tablet, capsule, liquid, etc.)
- Uses the same form of administration (oral, topical, injectable, etc.)
FDA's review process ensures that generic medications perform the same way and have the same intended use as the brand-name medication. Health care providers and plan members can be assured that FDA-approved generic drug products have met the same rigid standards as the drug from which it was copied. All generic drugs approved by FDA have the same high quality, strength, purity, and stability as brand-name drugs. In addition, FDA inspects facilities to make certain the generic manufacturing, packaging, and testing sites pass the same quality standards as those of brand-name drugs.1
How are generic drugs approved?
FDA approves a drug only after a review of extensive testing that shows a drug will provide the benefits described in its labeling, and that those benefits outweigh its risks.
A generic drug application submitted to FDA for approval must show that:
- The generic drug is "pharmaceutically equivalent" to the brand.
- The manufacturer is capable of making the drug correctly.
- The manufacturer is capable of making the drug consistently.
- The “active ingredient” is the same as that of the brand.
- The right amount of the active ingredient gets to the place in the body where it has effect.
- The "inactive" ingredients of the drug are safe.
- The drug does not break down over time.
- The container in which the drug will be shipped and sold is appropriate.
- The label is the same as the brand-name drug’s label.
- Relevant patents or legal exclusivities are expired.2
How competition through generics helps bring down prices
While generic drugs generally cost less than their brand-name counterparts, they may also have a favorable impact on their broader drug class. The FDA regularly conducts economic analyses to measure the impact of generic drugs on consumer prices. These studies have continually demonstrated that greater competition from generic drugs can help affordability and improve access to drugs for consumers, like your plan members.3
Further, at the pharmacy counter, be it brick and mortar or virtual, CarelonRx will automatically compare prices of select covered generic medications against a variety of cash discount cards and apply the lowest cost for plan members. Our integrated cost savings solution allows members to save on more than 50 generic medications that are typically used by consumers with a discount card.
In addition to using generic drugs when available, your plan members can also manage their prescription drug costs by taking medications on your plan’s drug list, using pharmacies in your plan, and ordering 90-day supplies of medications they take regularly. Of course, they should always check with their doctor before making any changes to their medications.
1. https://www.fda.gov/drugs/generic-drugs/overview-basics
2. https://www.fda.gov/drugs/generic-drugs/what-approval-process-generic-drugs
