What are Generic Drugs? Overview and Example

What Are Generic Drugs?

By Kristi Waterworth – Updated Oct 7, 2025 at 12:43 AM EST | Fact-checked by Robin Hartill, CFP

Key Points

Generic drugs are cheaper copies of brand drugs, offering significant savings to patients.
Once a brand-name drug's patent expires, competitors can apply to make generic versions.
Generic manufacturers have slim margins but can quickly expand drug catalogs, influencing stock choice.

Generic drugs can save you money, whether you're filling a prescription or shopping for store-brand over-the-counter medications. These medications are developed to high standards, but often cost a fraction of what their corresponding branded drugs do. Read on to understand why this is, and why it all matters to pharmaceutical and biotech investors.

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A prescription bottle overturned with pills pouring out. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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