First things first: there is no difference. A generic medication is in most ways an exact copy of its brand name counterpart. Use cases, dosage, medicinal effects, side effects, strength and administration are all the same between generic and brand name – the primary difference is its manufacturer and marketing tactics.
Generic medications are developed once a brand name medication’s patent expires. As the patent nears its pre-established expiration date, drug developers may take the opportunity to manufacture a generic version of the near-expired drug and apply to the FDA for approval to make and distribute.
A common myth is that generic and brand name drugs differ in strength and legitimacy – that perhaps they are not as medicinally effective. The fact is, the difference is the drug manufacturer's marketing and promotional resume. A generic drug does not require the same research and marketing tactics, as the brand name drug has already “jumped those hoops.”
The existence of generic and brand name medications increases competition between drug manufacturers, in turn nudging prices down.
This life cycle isn’t always ideal for the patent owners, as their sales can plummet. It isn’t uncommon for the patent owner to request a 6 month extension on their patent when approaching the expiration date.
For example, Lipitor, a top drug for cholesterol control, lost its market exclusivity in 2011. The generic, Atorvastatin, entered the market, causing Lipitor sales to drop and Pfizer Inc., the manufacturer, to report a 14% third quarter profit loss the following year (2012).
So, the next time your pharmacist tells you that your insurer prefers the generic or brand name version of your prescription, understand this is based on relationship and price adjudication. The preference is not of medical value. Flavors and colors may differ – but efficacy is consistent.