A generic medicine is an equivalent of an originator pharmaceutical product. It contains the same active ingredient as the originator product and is therefore interchangeable with that product. Some generic drugs may look different to their branded equivalent because they may have different shapes, colourings and binding agents but the active ingredient used is identical.
Generic drugs are typically cheaper than branded drugs because the generic manufacturers do not have to make the initial investment involved with developing and marketing the product as this has already been done by the originator company.
Generic medicines have saved the Pharmaceutical Benefits Scheme well over $3 billion since 1995. This ensures patient access to quality, safe and effective medicines by reducing the cost of pharmaceutical care.
Generic medicines provide value for money for the health system because of the way medicines are subsidised under the Pharmaceutical Benefits Scheme.
Effective competition between generic medicines and patent-expired originator brands helps to lower pharmaceutical costs and stimulate innovation.