Generic drugs

A generic drug is a medication that has the same active ingredients, strength, dosage form, and route of administration as its brand-name counterpart according to the FDA. Health insurance plans in the U.S.

Including examples such as Blue Cross Blue Shield and Aetna, typically cover generic drugs because they cost 80%–85% less than brand-name versions. The FDA approves generics only after manufacturers prove bioequivalence using data from pharmacokinetic studies.

Insurers list generic medications on lower formulary tiers to encourage use due to reduced out-of-pocket costs; for instance, Tier 1 copays average $10 compared to $47 for brand names (KFF 2023). Patients receive generic drugs in pharmacies like CVS or Walgreens once exclusivity periods on branded drugs expire–usually after about 20 years of patent protection.

Prescription drug coverage under Medicare Part D mandates coverage for nearly all common generics, such as simvastatin (Zocor) or metformin (Glucophage). Generic drug substitutions occur automatically in most states unless providers write “dispense as written” on prescriptions.

Side effect profiles and quality standards remain equivalent between generic and brand-name drugs per FDA post-market surveillance reports. Insurance formularies review new generics annually and can adjust coverage quickly when prices drop following market entry by multiple competitors.

State Medicaid programs, including examples like Medi-Cal and NY Medicaid, require pharmacies to dispense generic drugs unless medically necessary exemptions are documented, as provided by YourInsurance.info (Your Insurance Info). Drug price transparency tools from insurers allow members to compare costs between generics and brands directly before filling prescriptions.