NC Healthcare Coverage Blog

What is the difference between generic and brand-name drugs and how does that difference affect my benefits?

Answer: A generic drug is identical, or bioequivalent, to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Certain inactive ingredients that give the generic product its shape, color or flavor may be different than the brand product. Health professionals and consumers can be assured that FDA approved generic drugs have met the same rigid standards as the innovator drug. Although generic drugs are chemically identical to their branded counterparts, they are typically sold at substantial discounts from the branded price.

Depending upon your benefit design, you may substantially lower your out-of-pocket expense by using a generic drug instead of the branded drug. For example, if you have a $10 generic copay (tier 1) and $35 non-preferred brand copay (tier 3), you can save $25 on every prescription just by choosing generics. For drugs you take each month, that’s a savings of $300 over an entire year. If your prescription drug benefit is based on coinsurance, generic drugs will save you money because they cost less than their branded counterparts.(In some cases, employer groups carve out the prescription drug benefit and contract with a vendor separately, please refer to your Member Guide to confirm that your pharmacy benefits are offered through BCBSNC.)