Understanding the Value of Generic Drugs
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1 Understanding the Value of Generic Drugs Generic drugs can help you get the most out of your health care budget (8/05)
2 Many people believe that when something costs more, it must be of higher quality. But that s not always the case. The standards for quality are actually the same for generic and brandname medications. Gary Buehler Director, Office of Generic Drugs U.S. Food and Drug Administration (FDA)
3 Stretch your health care budget! Generic drugs can help. Even when you have a health benefits plan and health insurance plan, prescription drugs can be a costly medical expense especially for people who use medications regularly. But lower priced generic drugs can reduce overall costs and offer access to powerful medications that are as safe and effective as their brand-name counterparts. Quick Facts About Generics Generic drugs save consumers an estimated $8 10 billion a year, compared to the amount they would have spent on brand-name drugs. 1 For every health care dollar spent on medication, consumers spend less than a dime on generic drugs and close to 90 cents on brand-name drugs. 2 The FDA requires many rigorous tests and procedures to ensure that generic drugs are interchangeable with brandname drugs for all approved indications and conditions of use. 1 The FDA has approved approximately 7,000 generic drugs for a variety of treatments. 1 Why should I use generic drugs? Using generic drugs in place of brand-name medications can help lower the overall spending on health care, which is good for employers, insurers and employees. After all, America s prescription drug bill is growing with no end in sight: Our spending on prescription drugs has risen 15% or more every year for the past seven years. 2 The 50 top-selling drugs account for 44.4% of total drug sales. 2 In 2003, the average price of a brandname prescription was approximately $ The average price of a generic prescription was approximately $ That is a difference of approximately $53 per prescription money every consumer can use for other purposes. 2 1Generic Pharmaceutical Association. About generic pharmaceuticals. Available at: Accessed April U.S. Food and Drug Administration. Savings from generic drugs purchased at retail pharmacies. U.S. Department of Health and Human Services. May 3, Available at: Accessed April *Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. The Aetna companies that offer, underwrite or administer benefits coverage include: Aetna Health Inc., Aetna Health of California Inc., Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc., Aetna Health Insurance Company of New York, Corporate Health Insurance Company and/or Aetna Life Insurance Company. Aetna Pharmacy Management refers to an internal business unit of Aetna Health Management, LLC. Policy forms issued in Virginia include: GR-7; GR-89296; GR-89297; GR-700-W; GR-70-W; GR ; GR-96125; HMO/VA COC-1 07/99; CHI/VA SBQNET-1 01/00; HMO/VA GA-1 01/02; CHI/VA GP-1 04/02; HMO/VA COC-AMEND-3 07/02; HMO/VA SB-1 10/02; CHI/VA INSCT-1-[A-K] (10/01); CHI/VA SBQPOS-1 10/01; HMO/VA RIDER-RX (8/02). Policy forms issued in Oklahoma include: HMO/OK COC-4 09/02, HMO/OK GA-3 11/01, CHI/OK GP-3 02/02, CHI/OK INSCT-4 01/02, GR-23, GR-29, GR and/or GR
4 Brand-Name Drugs vs. Generics Many generic versions of frequently prescribed brand-name medications are now available. According to the FDA, patents on more than 200 brand-name drugs will expire over the next few years. 3 This will create the potential for new generic drugs and savings opportunities. As you can see from the examples below, there s a big difference between the average daily cost of branded and generic medications. POTENTIAL SAVINGS FROM GENERIC DRUGS Brand-Name Drug Ventolin Prinivil Glucophage Lasix Coumadin Generic Name Drug albuterol lisinopril metformin furosemide warfarin Used To Treat asthma hypertension Diabetes Congestive Anti-coagulant Heart Failure Dose Per Day 4 6 hours 20 mg 850 mg 40 mg 2.5 mg twice daily Cost Per Day Brand $1.44 $1.16 $2.81 $0.38 $0.87 Cost Per Day Generic $0.69 $0.60 $1.20 $0.20 $0.58 GENERIC SAVINGS $0.75 $0.57 $1.52 $0.18 $0.30 GENERIC SAVINGS (%) 52.10% 48.50% 54.10% 47.10% 33.80% U.S. Food and Drug Administration. Article Online Center for Drug Evaluation and Research. Office of Generic Drugs. Rockville, MD. Available online at Accessed April TOP-TEN GENERIC DRUGS IN 2004 Generic Name Description Use Hydrocodone/APAP Narcotic Analgesics pain Lisinopril Anxiety high blood pressure Atenolol Antihypertensive high blood pressure Amoxicillin Antibiotic infection Hydrochlorothiazide Antihypertensive high blood pressure Furosemide Oral Diuretic fluid retention Alprazolam Anti-Anxiety agent anxiety Albuterol Aerosol Bronchodilator breathing restrictions Metformin Insulin receptor type II diabetes Cephalexin Antibiotic infection Top ten generic drugs in Drug Topics Online Magazine. March 7, Available at: Accessed April U.S. Food and Drug Administration. Improving Access to Generic Drugs. June 12, Available at: Accessed April 2005.
5 Hold the line on prescription drug costs. One way to save on prescription drugs is to ask your health care professional if there s a generic medication equivalent to the brand-name drug you re taking. Also, every state in the United States lets pharmacists substitute generic drugs for many brand-name products. One exception: If your doctor indicates on the prescription that a specific brand-name drug is required, your pharmacist must fill the prescription as written. Try our easy-to-use online tools to estimate potential generic-drug cost savings. As an Aetna plan member, you can estimate the costs of your prescription drugs by registering on our Aetna Navigator secure member website available through There you can link to our Estimate the Cost of Care tool to find the approximate difference in cost between the brand-name version of your drug and a generic. You can also estimate the difference in medication costs between your retail pharmacy and our Aetna Rx Home Delivery service Aetna s convenient mail-order prescription drug benefit. Ultimate control for drug selection is with you and your doctor. Log on to Aetna Navigator to learn about hundreds of prescription medications, and to estimate the costs and potential savings of generic drugs.
6 Generic Drug Q&A 4 What are generic drugs? Generic drugs are identical, or bioequivalent to brand-name drugs in dosage, safety, strength, route of administration, quality, performance characteristics and intended use. Although generic drugs are chemically the same as their branded counterparts, they are typically sold at substantial discounts from the branded price. What are the differences between generic and brand-name drugs? There are very few distinctions, other than name and price. Generic drugs are often called by their chemical names. If brand-name drugs and generic drugs have the same active ingredients, why do they look different? In the United States, trademark laws don t allow generic drugs to look exactly like brand-name drugs. But they must duplicate the active ingredients. Are generic drugs as safe as brand-name drugs? Yes. The FDA requires that all drugs be safe and effective. Since generics use the same active ingredients and are shown to work the same way in the body, they have the same benefits and risks as their brand-name counterparts. Are generic drugs as strong as brand-name drugs? Yes. The FDA requires generic drugs to have the same strength, quality, purity and stability as brand-name drugs. Do generic drugs take longer to work in the body? No. Generic drugs work the same way and in the same time as brand-name drugs. Why are generic drugs less expensive? Generics cost less because generic manufacturers don t have the high marketing and upfront investment costs that developers of new drugs have. Also, competition between drug manufacturers helps keep the prices lower. Does every brand-name drug have a generic equivalent? No. Only about half of the brand-name drugs on the market today have a generic alternative. Some drugs are protected by patents and are supplied by only one company. 4U.S. Food and Drug Administration. Rockville, MD. Frequently asked questions about generic drugs. Consumer Brochure. Available online at Accessed April The information contained in this document does not constitute medical advice as each individual circumstance is different. Aetna arranges for the provision of health care services. However, Aetna itself is not a provider of health care services, and therefore, cannot guarantee any results or outcomes. These plans contain exclusions and some benefits are subject to limitations or visit maximums. Aetna does not recommend the self-management of health problems, nor do we promote any particular form of medical treatment. You should consult your health care provider for the advice and care appropriate for your specific medical needs. While this material is believed to be accurate as of the print date, it is subject to change (8/05) Available in Spanish. Disponible en Español Aetna Inc.
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