Why Most Drugs Don't Have Authorized Generics - And What It Means for Your Prescription Costs

When you pick up a prescription, you might assume the generic version is just as good as the brand name - and you’re right. But what if the generic you’re getting isn’t really a generic at all? What if it’s made by the same company that sells the brand-name drug, under a different label, at a slightly lower price? That’s an authorized generic. And here’s the catch: not every drug has one. In fact, most don’t.

What Exactly Is an Authorized Generic?

An authorized generic is the exact same drug as the brand-name version - same pills, same factory, same ingredients. The only difference? No brand name on the bottle. It’s sold under a generic label, often at a lower price, but it’s produced by the original manufacturer under their existing FDA approval (the NDA), not through the usual generic application process (ANDA).

This isn’t some loophole. It’s a legal, FDA-approved strategy. Companies like Pfizer, Mylan, and Teva have used it for years. When Mylan launched its authorized generic of the EpiPen in 2016, it was still under patent. The brand version cost over $600. The authorized generic? Around $300. Same device. Same epinephrine. Same risk of failure. Just no trademark on the box.

The FDA has tracked these since 1999. As of late 2019, there were 1,215 authorized generics on the market. Sounds like a lot? Consider this: there are over 20,000 unique prescription drugs in the U.S. That means fewer than 6% of all medications have this option.

Why Don’t More Drugs Have Authorized Generics?

Because the decision isn’t made by regulators. It’s made by drug companies.

Authorized generics only appear when the brand manufacturer decides to launch one. That’s it. No law requires it. No incentive pushes them to do it for every drug. And they usually only do it when it serves their business interests.

Here’s how it works: when a patent is about to expire, a generic company can file to enter the market. If they’re the first to file, they get 180 days of exclusivity - meaning no other generic can compete during that time. That’s a goldmine. But if the brand company launches its own authorized generic during those 180 days, it splits the market. The first-filing generic loses most of its profits. And the brand company keeps control.

The FTC found that when an authorized generic enters during this window, the first generic’s revenue drops by 40% to 52%. That’s enough to scare off many would-be challengers. In fact, a 2011 FTC analysis showed that if a brand company is likely to launch an authorized generic, the chance a generic company will even try to enter drops from 4% to 10% - because the payoff isn’t worth the legal risk.

So if you’re a big drug company with a $1 billion-a-year drug, and you know a generic is coming, you don’t wait. You launch your own version. You keep the profits. You silence the competition. And you call it “lower prices for patients.”

Who Benefits - and Who Gets Left Out?

Consumers do get lower prices - sometimes. During the 180-day exclusivity window, authorized generics can bring retail prices down by 4% to 8%, and wholesale prices by 7% to 14%. That’s real savings. A 2019 AARP analysis showed patients saved an average of $18.75 per prescription when an authorized generic was available.

But here’s the problem: those savings are temporary. Once the exclusivity period ends, and if no other generics enter, prices often creep back up. And if the brand company’s authorized generic is the only option? You’re stuck paying what they set.

Meanwhile, drugs that aren’t profitable enough - say, a $50 million-a-year medication - rarely get authorized generics. The cost of managing two labels, two supply chains, and potential backlash from generic manufacturers isn’t worth it. So patients on those drugs get no relief. They’re left waiting for a traditional generic to come along - which could take years, if it ever does.

And it’s not just about price. Pharmacists report confusion. In one study, 27% more prescription errors occurred when both a brand and its authorized generic were available - because the pills look identical, but the labels are different. Doctors get confused too. A 2018 AMA survey found 63% of physicians struggled to decide which version to prescribe when both were on the shelf.

Patients? They’re the most confused of all. One day, their “generic” is blue. The next, it’s white. Same pill. Different box. They think their medication changed. They call their doctor. They panic. They skip doses. That’s not just inconvenient - it’s dangerous.

The Bigger Picture: A System Designed for Profit, Not Access

The Hatch-Waxman Act of 1984 was meant to speed up generic access and lower drug prices. It worked - generics now fill 91% of prescriptions in the U.S. But it didn’t account for companies like Pfizer or Mylan playing the system.

Authorized generics are a legal way to bypass the spirit of the law. They don’t encourage competition. They suppress it. They let brand companies control the transition from patent to generic without ever losing market share.

The FDA has tried to improve transparency. In 2022, they switched from annual to quarterly updates of their authorized generic list. That’s progress. But it doesn’t fix the core issue: the system still lets drugmakers decide who gets access to cheaper versions - and who doesn’t.

Legislators have noticed. Bills like the Preserve Access to Affordable Generics and Biosimilars Act have been reintroduced in Congress multiple times since 2003. The latest version, in 2023, had 43 bipartisan cosponsors. It would ban brand companies from launching authorized generics during the 180-day exclusivity window. That would force them to choose: either let real generics in, or keep your brand price - but not both.

So far, the drug industry has fought every attempt. Their argument? “We’re lowering prices.” But if they were truly focused on lowering prices, they’d do it for every drug - not just the ones that make billions.

What You Can Do

You can’t force a company to make an authorized generic. But you can make smarter choices.

First, ask your pharmacist: “Is this an authorized generic?” If it is, great. You’re getting the same drug at a lower price. But if you’re on a drug with no authorized generic - and no traditional generic either - ask your doctor if there’s a similar medication that does have generic options.

Second, check the FDA’s authorized generic list. It’s public. You can search by brand name and see if a version exists. If it does, ask your pharmacy to switch you to it.

Third, if you’re paying full price for a brand-name drug with no generic - and you’re on Medicare Part D - ask about the manufacturer’s patient assistance program. Many offer coupons or discounts for those who qualify.

And finally, if you’re frustrated by this system, speak up. Contact your representative. Support bills that limit authorized generics during exclusivity periods. This isn’t about being anti-business. It’s about making sure the system works for patients - not just shareholders.

Bottom Line

Authorized generics sound like a win. And sometimes, they are. But they’re not the solution to high drug prices - they’re a tactic. A tool used by the biggest players to control the market, not open it up.

Most drugs don’t have authorized generics because the companies that make them don’t want to. And until the rules change, that’s not going to stop.

If you’re paying for a drug with no generic - authorized or otherwise - you’re not alone. But you’re not powerless either. Ask questions. Know your options. And don’t assume lower prices mean fair competition. Sometimes, the same company is just wearing a different hat.