Brand Name and Generic Drugs: What’s the Difference?

You may notice that your prescription is sometimes filled with a generic drug instead of a brand name. This is a common and important part of how drug benefit plans work. Understanding why generics are used—and how they benefit you and your plan—can help make these instances feel clearer and more comfortable. 

What is a generic medication? 

A generic medication contains the same active ingredient as the brand name drug and is only approved by Health Canada after meeting strict standards for quality, safety, and effectiveness. 

In simple terms, this means a generic medication: 

• Treats the same condition 

• Works the same way in your body 

• Meets the same safety standards as the brand name version 

For most people, there is no noticeable difference in how a generic medication works compared to a brand name drug. You can learn more about how brand name and generic drugs compare from the Canadian Drug Agency. 

Why generics are often the preferred option 

Generic drugs usually cost much less than brand name medications. That lower cost has real benefits including: 

• Helping your coverage last longer
  If your plan has an annual or lifetime maximum, lower drug costs help prevent those limits from being reached too quickly. 

• Supporting stable premiums
  Using lower‑cost medications helps control overall plan costs, which can reduce future premium increases. 

• Keeping the plan sustainable for everyone
  Drug costs continue to rise. Choosing effective, lower‑cost options helps ensure the plan can continue supporting members who rely on it. 

Why brand name drugs cost more 

Brand name drugs are often more expensive simply because companies set the initial price to recover research and development costs and generate a profit. Over time, generic versions become available at a lower cost while providing the same effectiveness. When a generic is available, there is no evidence showing that the brand name provides better treatment for most people. 

Are generics always exactly the same? 

While the active medicine is the same, generic drugs may use slightly different inactive ingredients (such as alternative fillers or dyes). These ingredients do not affect how the drug treats your condition and are safe for the vast majority of people. 

In rare cases, someone may not tolerate a specific generic version. Often, switching to another generic made by a different manufacturer is enough to resolve the issue. Situations where a generic truly does not meet someone’s needs are uncommon, but they are taken into consideration when they do occur. 

What about biologics and biosimilars? 

Some conditions are treated with medications called biologics, which are more complex than standard drugs. When alternatives become available, they are called biosimilars rather than generics. 

Biosimilars: 

• Are carefully reviewed and regulated in Canada 

• Must show no meaningful difference in safety or effectiveness 

• Offer more affordable options while providing the same treatment benefit 

ASEBP monitors these medications closely to balance access, safety, and responsible use of plan dollars. 

Bottom line 

• Generic medications are safe, effective, and meet the same standards as brand name drugs. 

• For most members, generics provide the same treatment at a lower cost. 

• Using generics helps protect your coverage, support plan sustainability, and manage premium increases.  

• It is uncommon for a generic not to meet someone’s needs, but those situations are reviewed with care on a case-by-case basis when they arise. 

If you have questions about your medication or want help understanding your options, an ASEBP pharmacist is here to support you. 

How ASEBP helps

ASEBP covers prescription medications that are approved by Health Canada and included on the drug formulary. When a generic or biosimilar is available, it is usually the preferred option because it provides the same treatment at a lower cost. 

Using these options helps protect your coverage—by managing drug costs, supporting plan sustainability, and helping your benefits go further. 

If your situation is unique, it can still be considered. Your pharmacist or healthcare provider can help you explore what is best for you, and you can always check your benefits or contact an ASEBP benefit specialist if you have questions. 

The information provided in this article is for personal use, reference, and education only. ASEBP does not provide medical advice. Before starting any medication or product, you should always consult with your pharmacist, health care provider, or call Alberta Health Link at 811.