What Are Generic Drugs in Health Insurance?
Generic drugs are generic versions of brand-name prescription drugs. The active ingredient formula is exactly the same for a generic drug as it is for the equivalent brand-name drug. That’s because the U.S. Food and Drug Administration (FDA) ensures that all generic drugs follow strict manufacturing protocols. Even a generic drug’s dosage form, ingredient strength, route of administration, and overall quality must be the same as its brand-name equivalent. The difference between the two types of drugs is that generic drugs cost less than their brand-name counterparts. Also, generic drugs sometimes go by different names and/or have a different appearance.
Generic Drugs Clearly and Briefly Explained
Health insurance companies characteristically encourage enrollees to choose generic drugs (when available) as they are always the least expensive choice. Sometimes, in fact, a health insurance company will require that enrollees choose the generic version when it is available. In this case, the insurance company may not even cover the brand-name version, were the consumer to prefer it to the generic version.
Because a generic drug is exactly the same as its brand-name counterpart, choosing generic over brand-name is generally a wise choice for consumers. As a result of the obvious benefits, most doctors will automatically prescribe the generic version of a drug if it is available. Keep in mind, not all brand-name prescription drugs have generic versions.
Generic drugs are generic versions of brand-name prescription drugs. The active ingredient formula is exactly the same for a generic drug as it is for the equivalent brand-name drug.
While the FDA oversees quality-control on generic drugs and ensures their complete symmetry to brand-name equivalents, some consumers may still wonder why brand-name drugs are more expensive. In that regard, they may worry that the generic version won’t be as potent or effective.
Keep in mind, there is a specific reason why brand-name drugs are more expensive: The maker of the brand-name drug must cover the costs of their research in coming up with the drug’s formula, promotional expenses, and patenting fees. A generic drug simply copies the already-established formula and can, therefore, sell the drug for a cheaper price. Nevertheless, a generic drug can only be manufactured and sold after the patent on the brand-name’s equivalent drug has expired.
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