Health Check: How do generic drugs compare to major brands?

The word “generic” is derived from the Latin “gender” which means “class” or “class”. For drugs, it was originally used to describe the active chemical ingredient of a drug, rather than the scientific name, which is often difficult to remember and pronounce.

Amoxil from $0.39

Over time, this definition has been expanded to include additional brands of existing drugs.

Investigating, developing and bringing a drug to the market is an expensive process and now exceeds $ 2.6 billion. Pharmaceutical companies receive a 20-year patent period, including time for clinical trials, where they have exclusive marketing rights to recover their investment.

After the patent period, another company can produce the same medicine under a different brand. These generally (but not always) less expensive brands have been known as the “generic”.


The generic medicine contains the same active ingredient in the same dose as the original brand.

In addition to the name in the bottle or box, inactive ingredients – so-called excipients – may differ. These are needed in the manufacturing process for a variety of reasons:

  • As loading, if the amount of active ingredient is very small
  • As a bookbinder to keep all the ingredients together
  • To stabilize the active ingredient so that it remains effective for longer
  • In order to improve the absorption in the body of the active ingredient
  • To sweeten or aromatize the medicine
  • To coat the tablets or capsules to make them easier to swallow.

Most companies use the same or similar excipients, such as starch, lactose, gluten, sugar, preservatives and food colorings. Therefore, the likelihood of having an adverse reaction to an excipient in one brand of one drug more than another is very poor.

But if you have a particular allergy or intolerance or want to avoid certain substances for cultural or medical reasons, consult your pharmacist or check the ingredients listed in the Consumer Drug Information Booklet (CMI) that comes with each prescription. CMIs are also available on the NPS Medicine Wise website.

Generic medicines can have a different color, shape, size and flavor than the original brand, but, more importantly, they must meet the same standards of quality, safety and efficacy as the original brand.


Generics are usually less expensive than the original brand simply because their manufacturers do not have the initial costs associated with research and development. How much less expensive will vary from one product to another, and from time to time.

The government subsidizes Pharmaceutical Benefit (PBS) medicines at the lowest (reference) price. In some cases, OEM manufacturers have lowered their prices to that competitive reference level. More commonly, there is a premium in the innovative / originator brand from an average of A $ 2 to A $ 3.

For antibiotics, for example, there is a difference of A $ 3.05 between a course of Amoxil (the original) antibiotic brand of amoxicillin and that of the lowest priced generic. The difference between the antibiotic Keflex and the generic cephalexin is A $ 6.30.

For gastro-esophageal reflux, patients pay A $ 2.50 above the reference price for the premium brand, Losec.

For the oral contraceptive pill, a four-month supply of Microgynon 30 is A $ 11.40 more than its equivalent generic reference product.

But at the present time there is no difference in the cost between the original and generic brands for prescription drugs to lower cholesterol, atorvastatin (Lipitor) or rosuvastatin (Crestor), or irbesartan (Avapro) blood pressure medication.

To compete with generic manufacturers, some of the pharmaceutical companies of innovative, research-based brands make their own “generics” under a different brand to be marketed at the reference price.

Changes in prices

The proportion of PBS prescriptions dispensed as generic drugs is now about 42% in volume, but only 19% in dollar value. The government wants to increase this volume to reduce the cost of PBS.

The government subsidy for PBS drugs is based on what is known as price disclosure and weighted average price. This takes into account the actual cost price of the different brands (originator and generic) and the market share of each brand.

Starting in October 2016, the originator brands will be excluded from the weighted average price calculations. Together with the proposed 5% reduction in prices paid to drug manufacturers still under patent,