generic drug

What is a generic drug?

Once a company's patent on a brand-name prescription drug has expired, other drug companies are allowed to sell the same drug under a generic label. Generic drugs are less expensive, despite containing the same active ingredients as their brand-name counterparts. According to the FDA, generic drugs are identical to the brand-name versions in several ways: They contain the same active ingredients, have the same strength, and use the same dosage form and route of administration.¹

How common are generic drugs?

Most prescription and health insurance plans reward clients for choosing generic drugs, as out-of-pocket costs tend to be lowest for generic drugs, and higher for brand-name drugs. So it's not surprising that nine out of ten prescriptions filled in the U.S. are for generic drugs.²