Because there are usually many drug makers competing to make generic drugs, their costs are 70% lower (on average) than brand-name drug costs. Generic drug makers must prove to the FDA that their product performs in the same way as the brand-name drug. Today, almost half of all prescriptions are filled with generic drugs.
(Primary Source: Centers for Medicare and Medicaid Services - Medicare and You Handbook. This content may have been enhanced by Q1Group LLC to include further examples, explanations, and links.)