If you've ever hesitated to buy a generic drug instead of the brand name equivalent, you're certainly not alone.  Despite the fact that nearly 70 percent of the drugs sold around the country are generics, many people still aren't sure how they differ from the name brands, which can affect their treatment decisions and budget.

Generics save consumers about $8 to $10 billion dollars a year, so it's worth getting to know them a little better. Read on to dispel some of the misconceptions you may have about generic drugs vs. brand-name drugs.

Myth or Fact: Generic drugs are not as effective as brand-name drugs.

Myth: According to the Office of Generic Drugs, a division of the U.S. Food and Drug Administration (FDA), generics are identical to brand names in dosage form, safety, strength, quality, performance and the way they're administered.

Myth or Fact: All brand-name drugs are more expensive than their generic equivalent.

Fact: A generic drug usually cost 30 percent less than the name brand, states the FDA. Brand-name drugs are more expensive because the pharmaceutical companies develop them under patent protection, which protects their investment in research, development, marketing and promotion and gives the company the sole right to sell the drug when it's ready.

When the patent expires, other companies can make the drugs. But, because they don't make the same investment in development as the innovating company, they're able to sell their drugs for much less. Also, once generics hit the market there is more competition so this also keeps prices low.

Myth or Fact: You can't tell generic drugs apart from name brands.

Myth: Even though generic drugs must work the same way brand-name drugs do, trademark law prohibits them from looking exactly the same as brand names. Generics have different colors and flavors, and there may also be some different inactive ingredients.

Myth or Fact: Brand-name drugs are safer than generic drugs.

Myth: Generics contain the same active ingredients, work the same way in the body, and have the same risks and benefits as their brand-name equivalents. Generic drugs are also produced under the same rigorous standards of the FDA's good manufacturing practice regulations for innovator products.

Myth or Fact: You take the same amount of a generic drug as a brand name drug.

Fact: FDA standards require that generic drugs have the same purity, quality, strength, and stability as name brands.

Myth or Fact: All brand-name drugs have generic equivalents.

Myth: Patents last for 20 years from the date of submission; generic drugs cannot be made during that time. Once the patent expires generic drugs can be developed, but they must be thoroughly tested by the manufacturer and approved by the FDA before they can be sold to consumers.

Want to find out if a generic drug is available for a brand name drug you're taking? Visit the FDA's Electronic Orange Book, where you can enter the name of the active ingredient or the proprietary (brand) name.

Generic Drugs Quick Facts

  • US generic drug sales were $58.5 billion in 2007 compared to $228 billion for brand-name drugs.
  • 10,072 of the 12,751 drugs in the FDA's Electronic Orange Book have generic counterparts.
  • Generic drugs make up 69 percent of all prescriptions dispensed in the US, but only 16 percent of all dollars spent on prescriptions.