Gen Z’s expensive drug habit: More want brand-name meds that are 79% more expensive

As a result, the majority of patients (63%) opt for generics; 21% choose brand-name meds, and 16% reported no preference. Yet a stark generational divide exists. Gen X respondents (69%) were most likely to say they prefer generic medications, nearly all of them (95%) citing price as their primary reason. The younger Gen Z (35%) was most likely to prefer brand-name drugs—despite being an average 79% more expensive.

Tebra, a tech firm whose software supports more than 100,000 independent health care providers, asked over 1,000 people in the U.S. about their prescription and over-the-counter (OTC) medication habits in September. The survey results were published in January.

Gen Z respondents justified their pricier picks on these points:

• Trusting brand names more than generics: 78%
• Being familiar with the brand: 69%
• Believing the brand name means higher quality: 59%
• Following a health care provider’s recommendation: 43%

Among all respondents, top reasons for brand-name drug preference included trust (62%), perception of quality (57%), and brand familiarity (54%). Those in favor of generics included price (91%), availability (34%), and previous experience (26%). Income played a key role; respondents whose annual salary tops $100,000 were 32% more likely to prefer brand-name meds.

The demarcation between one generation and the next tends to be unofficial and arbitrary, depending on the source. A Library of Congress consumer research guide, however, breaks down generational birth years as follows (Tebra survey participants shown in parentheses):

• Gen Z: 1997–2012 (15%)
• Millennials: 1981–96 (52%)
• Gen X: 1965–80 (25%)
• Baby boomers: 1946–64 (9%)

For the younger two generations surveyed, optics are a factor in medication choice. About one in 10 Gen Z and millennial respondents said packaging was the sole reason they prefer brand-name meds.

Are generic drugs as effective as brand-name medications?

The Food and Drug Administration vouches for the generic versions of brand-name medications, and an overwhelming majority of survey respondents (84%) said they believe these cheaper options are equally effective. Gen X (86%) was the most likely to agree, and Gen Z (77%) the least. Gen Z’s doubts didn’t stop there, with 24% considering generics to be lower quality and 17% thinking they’re less effective than brand-name drugs. 

In addition, nearly one in 10 respondents said they doubted generic drugs are as rigorously tested as brand-name meds; Gen Z was once again most skeptical (11%). A segment of this youngest generation surveyed (7%) questioned whether generic drugs are FDA-approved. Millennials, though, tended to think brand-name meds work faster than generics (12%).

Patients’ drug preferences vary by medical condition. Most said generics are as effective as brand-name drugs in treating conditions including pain relief (78%), cough and cold (75%), and fever and headaches (71%). When asked which conditions merited brand-name meds, the top responses were mental health (36%), pain relief (33%), and diabetes management (30%).

Why are generic drugs so much cheaper?

Brand-name drugs typically go through years of costly clinical trials on the road to FDA approval. Because generic drug manufacturers require reduced upfront research expenses, the FDA explains, the medication is sold at high discounts. In 2023, FDA-approved generic and biosimilar medications saved patients and the U.S. health care system $445 billion, according to the Association for Accessible Medicines (AAM).

Tebra used GoodRx data to compare drug costs in five major U.S. cities: Chicago, Houston, Los Angeles, New York, and Washington. Generics, both OTC and prescription, are an average 79% cheaper than their brand-name equivalents. For example, sertraline is 97% cheaper than Zoloft, while naproxen is 41% cheaper than Aleve.

When it comes to common medications, such as those for allergy relief, Tebra estimated consumers can save up to 83% per prescription by going with generics.

While generic drugs are cheaper in the U.S. than just about any other country, the AAM says, pharmaceutical trade groups warn that that may change under the Trump administration. The new president on Feb. 1 announced tariffs including a 10% levy on imports from China, the world’s top producer of active pharmaceutical ingredients.

“Generic manufacturers simply can’t absorb new costs. Our manufacturers sell at an extremely low price, sometimes at a loss, and are increasingly forced to exit markets where they are underwater,” AAM president and CEO John Murphy III said in a Feb. 2 news release. “The overall value of all generic sales in the U.S. has gone down by $6.4 billion in five years despite growth in volume and new generic launches. Tariffs would make this much worse.”

For more on the pharmaceutical industry:

• Ozempic, Wegovy maker calls out Hims & Hers Super Bowl ad: ‘Check before you inject’
• Patients will pay more for prescription meds and face drug shortages amid Trump tariffs, pharma groups warn
• Mark Cuban once helped his college friend save almost $10,000 on prescriptions after a ‘horrific car accident’
• Online searches predicted the surge in prescriptions of weight-loss drugs like Wegovy and Zepbound, study says. Here’s what could happen next
• Hate needles? Lilly’s weight-loss pill could get FDA approval next year, CEO says