Out-of-pocket costs vary widely for branded, generic drugs

NEW YORK —The often wide gap between what consumers will pay out of pocket for a branded versus a generic drug is one big factor driving the continually rising demand curve for me-too medicines.

That difference in price has narrowed in recent years as generic-only me-too drug makers — and the many brand-name drug companies that have moved into the lower end of the prescription price spectrum by buying up or launching their own generic drug companies — become more sophisticated and selective about their pricing strategies. But the differences in many cases still are substantial.

In turn, that often translates to substantially lower out-of-pocket costs for health plan beneficiaries who choose the generic over the brand, when available. And, as shown in the chart compiled by SDI Health below, the differences in costs paid directly by patients for branded and me-too medications can range from a few dollars to a fraction of the cost of an original drug.

Average out-of-pocket costs for branded and generic products by therapeutic category*