Generic and Brand-Name Prescriptions — Two Sides of the Same Pill? 

You know the feeling. You’re at the local pharmacy, dragging yourself through the aisles and staring down a rabbit hole of labels and discount stickers. All you want is a remedy for your runny nose, not a deep-dive into the slight pricing variations of over-the-counter cold medications.

But that overwhelm hardly compares to the dread of shopping for prescription medications. After all, the difference between a brand-name and generic version of the same drug could be tens, hundreds, or even thousands of dollars! 

When you need to fill a prescription, where do you go and which version do you choose? We’ll outline the most significant differences between generic and brand-name medications — and how you can find more affordable prescription options.

How Brand-Name and Generic Prescriptions Compare

The brand-name and generic versions of a drug are deemed “pharmaceutically equivalent.” Both are approved by the FDA to be sold and marketed in the US, and both have the same active ingredients, purity, strength, quality, labeling, dosage form (tablet or injection), way to administer (oral or topical), and manufacturing standards.

However, a major distinction between generic and brand-name drugs is exclusivity. Brand-name drugs typically have patents that prevent their generic counterparts from being sold and marketed for about 20 years. That’s why newer branded drugs are more expensive than generics: until their patent expires, they essentially have a monopoly on the market.

Branding is another distinction between the two prescription types. While generic drug products have the same active ingredients and labeling as their branded counterparts, trademark laws don’t allow two drugs to look exactly the same. Therefore, a generic drug might have different packaging, design, coloring, size, and flavoring from other generic or brand-name versions — so long as these differences don’t affect the safety and performance of the drug. 

The final, most striking distinction is pricing. Generic medications typically cost less than brand-name drugs for two reasons. First, generic medicines are cheaper to research. The FDA requires a brand-name medication to repeat extensive animal and clinical studies that demonstrate the drug’s safety and effectiveness. Because generic drugs contain the same active ingredients and are produced after the branded version has been approved for market, they don’t need to repeat the same tests to prove their efficacy. The work’s already been done by the branded product.

Second, generic drugs create market competition for brand-name prescriptions. Since the FDA approves multiple generic drugs for the same product, generics drive down the average cost for that prescription drug. For example, according to the FDA, if a brand-name medicine has one generic competitor, the medication’s price falls by 30%; but if a brand-name medicine has five generic competitors, the price dips almost 85%! So, the more generic drugs on the market, the more affordable the drug.

Solutions to Save on Rx

The quick and easy answer to save on prescription medications is to buy the generic version. You can also take these steps to lower your prescription costs: 

  • Find prescriptions on your drug formulary, which is the list of preferred brand-name and generic medications that your health insurance plan covers. And make sure the formulary is up-to-date! It can change even within the year.
  • If your prescription is not listed on the formulary, it’s called a non-formulary; it may still be covered by your insurance plan, but it will likely cost more than formulary medications. Ask your doctor if there is a similar drug that has a generic option or is preferred by your plan.
  • Buy prescriptions from a pharmacy in your plan network. You’ll pay more if you fill prescriptions at out-of-network pharmacies.
  • Shop online. With apps and sites that help you purchase and compare medications, you’re no longer stuck paying the price set by your insurance plan or local pharmacy. 

Online Options for Buying Rx Meds

Costco Pharmacy 

Costco sells bulk items at a reduced price —  prescription meds included. And while you typically need to pay membership dues to access Costco deals, you do not need a membership to purchase prescription drugs through the in-person or online pharmacy. Plus, Costco prices are competitive. According to Consumer Reports, the pharmacy offers lower prices than Walmart, CVS, Rite Aid, Walgreens, and other pharmacies on the five most commonly prescribed drugs.

Cost Plus Drugs

Marc Cubans’ online company directly negotiates with generic drug manufacturers to secure wholesale prices.  As of 2022, the downside to Cost Plus Drugs is that don’t accept insurance or sell brand-name drugs. However, if you (a) regularly use generic drugs and (b) you’re uninsured, uninsured, or have a high-deductible plan, Cost Plus Drugs could save you hundreds to thousands over a year.

Optum Store

This new online store allows members to view the actual cost of prescriptions under their insurance plan. First, members sign up and enter their insurance information. Then the site automatically calculates the cost of covered medications. Like Cost Plus Drugs, Optum Store does not accept insurance and, with a few exceptions, does not sell brand-name medications. But if you’re deciding whether to pay for a medication through insurance vs. out of pocket, Optum Store helps you confirm which option is cheaper.


The free website and mobile app tracks prescription drug prices and offers coupons for discounts on prescription medications. The site is not a pharmacy or vendor; it’s simply a price comparison tool where users can find a nearby pharmacy with the lowest price for a medication they need.

Prescription medications can be costly, but you can also avoid paying thousands in markup. With online tools to compare prices and vendors, you have options to find cheaper versions of the prescriptions you need.