Generic Drugs

by Lois Etienne on September 13, 2012

in Finances,Lifestyle,Senior Health and Safety

The majority of older adults in United States obtain their prescription medications through private health or prescription plans. In most plans, and certainly for older adults who lack prescription drug coverage, generic medications are important alternatives to costly brand name drugs and present low-income adults with opportunities to reduce their out-of-pocket expenditures on healthcare.

Last year, nearly 80% of the 4 billion prescriptions dispensed in this country were generic drugs. Growing use of generic medicines has reduced U.S. health care spending by more than $1 trillion over the past decade, according to a Generic Pharmaceutical Association study.

Despite the financial benefits of substituting generics or brand names agents, seniors often are given brand name drugs when opportunities for generic substitution exist. Sometimes it’s the preference of the patient due to loyalty to a particular brand name, influence of TV advertising or even a physician recommendation.

Every drug manufacturer who places a drug on the market has a 20-year patent protection. This protection allows the manufacturer to sell the drug only under their name for that amount of time to recoup the money they used to develop the drug. Once 20 years is up, drug companies can create a copy of the brand name drug, resulting in ‘generic’.

Generics have the same active ingredient as the brand name drug. The only difference in the generic is the name, color, shape, and size of the pill. The only other difference is the inactive ingredients, which has no effect on treatment.

The FDA places regulations on generic drugs to ensure they are the same as brand name drugs. Once there are multiple generic versions of a brand-name drug available, the price for generics generally drops to 80% to 90% less than the brand-name price. Something to consider.

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