02.Saving money with generic drugs
Generic medicines are said to be bio-equivalent to their branded counterparts. They contain the same amount of the same active ingredient as the branded drug and are as effective and safe.
What medicines are available?
Not all branded drugs have a generic equivalent. That’s because newly developed medicines are protected by a patent typically for 20 years - meaning the original brand manufacturer has the sole right to sell the drug during that time. This allows the company to recoup money it invested in research and development, marketing, promotion and brand creation.
But when patents come close to expiry, other manufacturers can apply to the Government’s Therapeutic Goods Administration (TGA) for the right to sell competing generic drugs. These medications must meet the same quality and safety standards as their brand name equivalents, before they reach pharmacists’ shelves.
Start saving money
The majority of consumers and patients can safely and conveniently substitute generic drugs for branded medications, saving a lot of money in the process. In 2005, generic medicines accounted for 18% of the medicines dispensed under the PBS. Many more patents are set to expire over the next five years so we’re likely to see an increase in the number of generic alternatives available.
The government, through the Pharmaceutical Benefits Scheme (PBS), generally only subsidises up to the price of the lowest priced version of any particular medication (usually a generic if it's available). This means you may have to pay extra for more expensive brands. The difference in price is known as a ‘brand price premium’ and doesn’t count towards your safety net total.
Find out if you can save by buying generic:
- When your doctor prescribes a drug, ask him or her whether there is a less expensive brand that might be suitable for your condition.
- Ask your pharmacist to substitute a cheaper brand if possible. The pharmacist can do this, unless the doctor has marked the prescription ‘no substitution’.
Same medicine, different brands
You can also find out if a generic alternative to the medication you’re taking is available from the Department of Health and Ageing’s Schedule of Pharmaceutical Benefits. The Schedule is available online.
Type the name of your medicine into the search terms – either the brand name or the generic name. If there is a generic version available, you will get a list of brand names and their maximum prices. The listed ‘price to the consumer’ is what you will pay (or the price after PBS safety net/concession if you have a health care card). Some brands may be cheaper than others – these are the generic alternatives.
Tips to save money
- Your doctor and pharmacist won’t be upset if you ask about a lower priced medicine. In most cases they will appreciate why you are asking and will be willing to discuss less expensive medicines options with you.
- Always remember that if you switch from a brand to a generic form of medication, that you are replacing the brand with the generic. You must not take both the generic and the brand name medication at the same time.
- The government only subsidises up to the price of the lowest priced brand. The ‘brand premium’ you pay on more expensive medicines doesn’t count towards meeting the government safety net. (If you’re a general patient your prescription costs will reduce to the concessional rate ($5.00) once you or your family have spent $1141.80 on medication in a calendar year. If you are a concession card holder your prescriptions are free once you or your family have spent $290.00 on medicines in a calendar year).
- If you need a lot of medicines you should keep good records. This will help you keep track of your medications and also help you to work out when you reach the safety net. Your pharmacist can give you a Prescription Record Form that they will fill in each time you get a prescription.
- You can find out more about less expensive generic medications by phoning the Medicines Line on 1300 888 763 or by visiting the National Prescribing Service for more information.
- You should always discuss any concerns you have with your medications with your pharmacist or doctor.