Saving Money on Drugs

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Image Not Available

Fact: Generic drugs can be identical to their more expensive, brand name alternatives… so why waste the extra cash? For many, a belief that “brand name” means “better” persists. But is that true? What, exactly, are we paying for?

According to the FDA’s Frequently Asked Questions About Generic Drugs, a generic drug is defined as:

A generic drug is a copy that is the same as a brand-name drug in dosage, safety, strength, how it is taken, quality, performance and intended use.

In fact, the FDA even goes on to explain how production facilities between brand name and generic drugs must meet the same standards… so there really is no difference between the two. And if you’re wonder why you can’t get a generic version of every drug on the market, the reason is simple: copyright. The FDA generally allows brand name pharmaceutical manufactures to maintain copyrights on their medications for 20 years. After that, any company that can meet the same quality in product and manufacturing, can produce the same medication.

So why do brand names cost more? Advertising! According to IMS Health, a company that tracks global pharmaceutical markets, pharmaceutical companies spent nearly $5 billion in advertising to consumers in 2006. So every time you buy a brand name product, you’re paying for the brand name advertising. That doesn’t really make sense when you can get the exact same product for substantially less.

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.