Generic Drugs - Health Insurance

What Are Generic Drugs in Health Insurance?

<lingo>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.</lingo>

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.

<twitter>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.</twitter>

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.

<zipcode>Get the best rates in your area and start saving:</zipcode>