Generic Drug

A generic drug is the chemically identical version of a brand-name drug, made and sold after the brand-name manufacturer's patent expires. Generics contain the same active ingredient, in the same dose, delivered the same way, and must meet FDA bioequivalence standards. The FDA does not certify a generic unless it performs the same way in the body as the original.

The price difference is the point. Generic atorvastatin (the generic of Lipitor) costs about $4 a month cash at most pharmacies. Brand-name Lipitor, before patent expiration, was $150+. Generics account for roughly 90% of prescriptions dispensed in the US but only about 20% of drug spend — that's the leverage. Once a brand goes generic, plans typically move it to Tier 1 with a $5 to $15 copay, and cash prices at Walmart, Costco, and independent pharmacies often beat the copay. Some drugs are "authorized generics" — the brand manufacturer sells the identical product under a generic label to capture the post-patent market.

The takeaway: always ask if a generic exists. If it does, request it explicitly at the prescription counter and check the cash price against your copay — cash often wins on generics.