Understanding Differences between Generic, Brand Name, Biosimilars

Brand-Name Drugs

When a pharmaceutical manufacturer develops a new drug, they often file for a patent, which, according to the Congressional Research Service, gives the manufacturer “the exclusive right to make, use, sell, and import the invention for a term lasting approximately 20 years.” The initial drug approved is referred to as the brand-name medication.

After a brand-name medication’s patent expires, other companies or manufacturers are legally eligible to produce generic or biosimilar versions of the medication.

Generic Drugs

According to the FDA, a generic drug must work similarly to the brand-name equivalent. Beyond having the exact mechanism of action as the brand-name drug, generic drugs must also have the same dosage, safety profile, efficacy, strength, stability, administration, and quality.

Good Rx provides an example of generic and brand-name drugs. The article states, “amphetamine salt combo is the generic version of Adderall, a medication used to treat attention-deficit hyperactivity disorder. These two prescription drugs are available in the same strengths, are prescribed in the same quantities, and have the same instructions for how to take them. The same is true for metformin, the generic version of Glucophage, a drug used to treat type 2 diabetes.”

An article published by Cedars Sinai shares that not all brand-name drugs have a generic version. For the duration of a patent on a brand-name drug, no generic versions are available. The length of these patents varies, and it is common for companies to try and renew patents. Unfortunately, patents also contribute to high medication costs as market exclusivity means that patients have no choice but to purchase the brand-name drug.

Interchangeability

Although generic drugs are available for many existing brand-name medications, switching the two is not always easy or ideal. Despite the availability of generic medicines, pharmacists must fill prescriptions as they are written. If a provider writes a prescription for a brand-name drug and states, “do not substitute,” the pharmacists must only fill the brand-name version.

Beyond prescription status, some generic drugs may not work as effectively as their brand-name counterparts. While generic drugs are considered equally effective and less expensive than brand-name medications, they are not always an alternative to brand-name drugs. According to an article published by Cedars Sinai Medical Center, “for medicines classified as ‘narrow therapeutic index drugs’ — such as certain antiseizure medicines — it could make sense to stick with a brand-name drug if the doctor recommends it.” The risks and benefits of using a generic medication vary based on the patient.

Regulation and Pricing

Like brand-name drugs, generic medications undergo an equally rigorous approval process. Although the active ingredients are the same, critical differences between generic and brand-name drugs are the size, shape, and color. These phenotypic aspects do not interfere with the other vital similarities previously mentioned.

For a generic drug to be approved, the manufacturer must show that the generic version can be effectively substituted for the brand name. Because they have the exact mechanism of action, efficacy, and safety profile, these drugs do not require repetitive animal and clinical trials before the approval of a brand-name medication.

Generic drugs and biosimilars can be significantly cheaper than brand-name medications. This is, in part, due to the way they are regulated. The FDA states that, between 2009 and 2019, generic drugs saved approximately $2.2 trillion.

The FDA also implies that market competition is a major contributing factor to decreased costs, noting, “when multiple generic companies market the same product, market competition typically results in prices about 85% less than the brand name.”

Pharmaceutical patents may contribute to approval issues despite the economic benefits of generic drug use. Drug manufacturers are prohibited from selling generic drugs during the duration of a patent. Additionally, the FDA states, “periods of marketing exclusivity for brand-name drugs can also impact the timing of generic drug approvals.”

Biosimilars

The FDA states that generics are typically smaller chemical compounds, while biosimilars are larger complex biological molecules. According to the American Cancer Society (ACS), biosimilars are medications that are like biological medicines.

“Generic drugs are usually synthesized from chemicals, and the manufacturing process results in an active ingredient that is the same within each manufactured lot and between lots. However, biosimilars, like their reference biological products, are typically manufactured from living systems,” states the FDA website. These living systems may include yeast, bacteria, and animal cells. Considering the sources of these medications, there is some inherent variability.

Regulation and Pricing

While generics and biosimilars are alike in many ways, there are some critical differences between the two. These fundamental differences can contribute to variations in the regulatory procedures for each kind of medication. Since biosimilars — unlike generic drugs — do not have the same active ingredients as their brand-name counterparts, they do not automatically function as an equal substitute for the brand name.

“The FDA often needs more information from studies comparing a biosimilar to its original biologic than it needs from studies done on a generic drug. This is because a biosimilar comes from a natural source and cannot be made as an exact copy of its brand-name biologic,” stated the FDA website.

The ACA states that generic drugs and biosimilars are compared to brand-name drugs throughout the approval and regulation of products. Additionally, the ACA says, “both go through a thorough but shortened FDA review process compared to their brand-name drugs.”

The biosimilar approval process is slightly more extensive than the generic drug approval process. Upon approval, generic drugs are automatically deemed interchangeable with the brand-name medication since they have the same active ingredients. Conversely, biosimilars must undergo an additional regulation process that allows them to be deemed interchangeable.

“While biosimilars can be used to treat disease once they get initial approval, they need another, special FDA approval to be considered interchangeable before they can be substituted automatically for a brand-name biologic. If a biosimilar is not approved as interchangeable, it needs a prescription to be written specifically for the biosimilar to be used instead of its brand-name biologic.”

Looking Ahead

As the market for biosimilars continues to grow, understanding their benefits and the differences between brand-name and generic drugs will become increasingly important. Providers are urged to conduct extensive research using resources from the FDA when deciding when to opt for generic or brand-name prescriptions. Payers should also be mindful of each medication type's cost and efficacy differences.