Generic Copays vs Brand Copays: Average 2024 Costs Explained

When you fill a prescription in 2024, the amount you pay at the pharmacy isn’t just the price of the medicine. It’s shaped by your insurance plan’s copay structure-and whether you’re getting a generic or brand-name drug can make a huge difference in your wallet.

What’s the real cost difference?

For most people on Medicare Part D or commercial insurance, generic drugs cost far less than brand-name versions. In 2024, the average copay for a preferred generic was between $0 and $4.50. Some plans even offered $0 copays for generics. That’s not a typo. You could walk out with a 30-day supply of lisinopril, metformin, or atorvastatin and pay nothing.

Brand-name drugs? That’s a different story. The median copay for a preferred brand was $47. For non-preferred brands-drugs your plan doesn’t encourage-you could easily pay $100 or more per prescription. That’s more than 20 times the cost of a generic, even before you factor in coinsurance.

How Medicare Part D tiers work

Medicare drug plans use a four-tier system to sort medications by cost:

• Tier 1: Preferred Generics - Usually $0 to $4.50
• Tier 2: Non-Preferred Generics - Around $7
• Tier 3: Preferred Brands - Median $47
• Tier 4: Non-Preferred Brands - Median $100

Some plans even have a Tier 5 for specialty drugs-things like injectables for rheumatoid arthritis or cancer treatments. Those can cost $150 or more, or even 33% of the drug’s price.

Not all plans are the same. Medicare Advantage Prescription Drug (MA-PD) plans usually charge fixed copays. Standalone Prescription Drug Plans (PDPs) often use coinsurance-meaning you pay a percentage of the drug’s total price. For non-preferred brands, that can mean paying 47% of the cost. If your brand-name drug costs $200, that’s $94 out of pocket.

Extra Help? Lower caps for low-income beneficiaries

If your income is limited, you might qualify for Extra Help-a federal program that cuts drug costs even further. In 2024, the maximum copay for generics was $4.50, and for brand-name drugs, it was $11.20. That’s a lifeline for people on fixed incomes. But if you don’t qualify, you’re on the hook for the full plan’s copay structure.

Why brand-name drugs cost so much more

Generics are chemically identical to brand-name drugs. They have the same active ingredients, same dosage, same safety profile. The difference? Marketing, patents, and corporate pricing.

Brand-name companies spend millions on advertising and patent protection. Once the patent expires, other manufacturers can make the same drug for pennies. But insurance plans still charge you a lot more for the original brand-because they’re not always incentivized to push the cheaper option.

Even worse, some pharmacies are forced by wholesalers to pay higher prices for generics if they want to keep stocking expensive brand-name drugs. That’s called a “tying arrangement.” It’s not illegal, but it drives up the cost of generics in some places, making the price gap even wider.

What happens when you’re in the coverage gap?

Medicare Part D has a coverage gap-also called the “donut hole.” In 2024, once you and your plan had spent $1,700 on drugs, you entered this phase. You still had to pay, but now you paid 25% of the drug’s cost, whether it was generic or brand.

The good news? The Inflation Reduction Act capped insulin at $35 per month. That applies to both generic and brand insulin. So if you’re on insulin, you’re protected.

Commercial insurance plans are even wilder

Some commercial insurers use a “Member Pay the Difference” rule. Here’s how it works: if your doctor prescribes Lipitor (brand), but there’s a generic version (atorvastatin) available, your plan will pay for the generic. Then they make you pay the difference between the two prices-on top of your regular copay.

One Reddit user described paying $42 extra just because his doctor wrote “dispense as written.” Even though he didn’t ask for the brand, he still got stuck with the bill. That’s not a mistake. That’s policy.

What real people are paying

A survey by the Medicare Rights Center found that 63% of people using brand-name drugs struggled to afford them. Only 28% of people on generics had the same problem.

One beneficiary in Florida reported paying $95 for a 90-day supply of a non-preferred brand drug. The generic version? $15. His doctor wouldn’t switch him because of side effects-but he still had to pay the full $95.

Meanwhile, plans with $0 generic copays got 4.7 out of 5 stars in user reviews. Plans with high generic copays? Around 3.2. People notice the difference.

How to save money in 2024

You don’t have to just accept what your plan charges. Here’s what actually works:

• Check your plan’s formulary-It’s required to be published by October 15 each year. Look up your exact medications.
• Ask for therapeutic alternatives-72% of Medicare plans have a preferred generic that works just as well as your brand drug.
• Compare plans annually-Your best plan this year might not be next year. Use the Medicare Plan Finder tool. It updates daily.
• Ask about cash prices-Sometimes, paying cash at Walmart or Costco is cheaper than your copay. A 30-day supply of metformin can cost $4 cash.
• Use mail-order pharmacies-Many plans offer lower copays for 90-day supplies.

What’s coming in 2025

Starting in 2025, the Inflation Reduction Act caps out-of-pocket drug costs at $2,000 per year. That’s a game-changer. No more unlimited spending in the coverage gap. No more surprise bills.

Also, 98% of 2025 Medicare Part D plans will offer $0 copays for preferred generics-up from 87% in 2024. That’s a big win for people who rely on daily medications.

But non-preferred brand copays are expected to rise to $105. So if you’re stuck on a brand-name drug with no generic alternative, your costs could still be painful.

Final tip: Calculate your annual cost, not just your monthly copay

A plan with a $5 generic copay and a $100 brand copay might seem fine-if you only take generics. But if you need a brand-name drug like Humira or Enbrel, you could pay $1,200 a year. Another plan might have a $40 brand copay but $0 generics. That’s $480 a year. Same plan, same drugs, $720 difference.

Don’t just pick the cheapest monthly premium. Pick the plan that fits your actual prescriptions.

Still confused?

Talk to a Medicare counselor. Many are free through State Health Insurance Assistance Programs (SHIP). They can compare your medications across plans and show you exactly where you’ll save. In 2023, audits showed these services saved people an average of $420 a year.

You’re not stuck with whatever you got last year. You have options. You just need to look.