Generic Copays vs Brand Copays: Average 2024 Costs Explained

When you pick up a prescription, the price you pay at the pharmacy isn’t the full cost of the drug. It’s your copay - the portion you cover out of pocket. But here’s the thing: if you’re taking a generic drug, you might pay $5. If you’re taking the brand-name version of the same medicine, you could pay $100 or more. That’s not a mistake. It’s by design.

Why Generic and Brand Copays Are So Different

The difference between generic and brand copays isn’t random. It’s built into how insurance plans work. Since 2006, Medicare Part D and most private insurance plans have used a tiered system to encourage people to choose cheaper, equally effective generic drugs. The idea is simple: make generics easy and affordable, and make brand-name drugs more expensive unless there’s a real medical reason to use them.

In 2024, most plans have four tiers:

• Tier 1: Preferred Generic - Usually $0 to $10
• Tier 2: Non-Preferred Generic - Around $7 to $15
• Tier 3: Preferred Brand - Median $47
• Tier 4: Non-Preferred Brand - Median $100

These numbers aren’t guesses. They’re based on data from the Centers for Medicare & Medicaid Services (CMS) and the Kaiser Family Foundation (KFF), which tracked over 50 million Medicare Part D beneficiaries in 2024. For most people, a preferred generic drug like atorvastatin (the generic version of Lipitor) costs $4.50 for a 30-day supply. The brand version? $47 to $100, depending on your plan.

Medicare Advantage vs Standalone Drug Plans

Not all plans work the same way. If you’re on a Medicare Advantage Prescription Drug (MA-PD) plan - which about 45% of Medicare beneficiaries use - you’re likely paying fixed copays. That means you know exactly what you’ll pay each time: $5 for a generic, $47 for a preferred brand.

But if you’re on a standalone Prescription Drug Plan (PDP), you’re more likely to pay coinsurance - a percentage of the drug’s total cost. That can be a problem. If your brand-name drug costs $300, and your plan charges 22% coinsurance, you pay $66. But if that same drug jumps to $450 next month? Your copay goes up too. No warning. No cap. Just a higher bill.

For non-preferred brand drugs, the difference gets even starker. In MA-PD plans, 94% of enrollees pay a flat $100 copay. In PDPs, nearly 80% pay 47% of the drug’s price - which could mean $150, $200, or more if the drug is expensive.

What Happens When You Choose a Brand Over a Generic

Some doctors write prescriptions for brand-name drugs because they think they’re better. Sometimes, they’re right - but often, they’re not. If your doctor writes “dispense as written,” your plan still has rules. Many plans have a policy called “Member Pay the Difference.”

Here’s how it works: If there’s a generic version available, and you choose the brand anyway, you pay your normal copay - plus the full price difference between the generic and the brand. So if the generic costs $5 and the brand costs $95, you pay $5 (your copay) + $90 (the difference) = $95. That’s not a mistake. That’s the plan’s way of saying, “We’re not paying extra for this.”

One Medicare beneficiary in Florida reported paying $95 for a 90-day supply of a brand-name drug that had a $15 generic alternative. His doctor wouldn’t switch him because of side effects - but he didn’t know his plan would charge him $80 extra just for choosing the brand. He ended up paying $1,140 a year for a drug that could’ve cost $180 with the generic.

Specialty Drugs Are a Whole Other Level

If you’re taking a drug for cancer, MS, or rheumatoid arthritis, you’re probably on Tier 5 - the specialty tier. These drugs can cost thousands. Copays here aren’t fixed. They’re often percentage-based: 33% of the drug’s cost, up to $5,000, then 15% after that.

One 60-day supply of a specialty drug might cost $150 out of pocket. Another could cost $3,000. It all depends on the drug, the plan, and whether it’s on your plan’s preferred list. And yes - there are often prior authorization requirements. Your doctor has to prove you’ve tried cheaper options first. That’s called step therapy. It’s frustrating, but it’s standard.

Extra Help? Lower Copays for Low-Income Beneficiaries

If your income is limited, you might qualify for Medicare’s Extra Help program. In 2024, this program capped copays at $4.50 for generics and $11.20 for brand-name drugs - no matter what your plan says. That’s a huge relief for people living on fixed incomes.

But here’s the catch: You have to apply. Many people don’t know they qualify. The Social Security Administration estimates that nearly 40% of people who are eligible for Extra Help never sign up. If you’re paying more than $10 for a generic or $20 for a brand, it’s worth checking if you qualify.

What’s Changing in 2025

The Inflation Reduction Act didn’t just tweak the system - it changed it. Starting January 1, 2025, there’s a new rule: no one pays more than $2,000 a year out of pocket for prescription drugs, no matter how many brand-name drugs they take.

That’s a big deal. Right now, someone taking a $100-a-month brand drug could easily hit $1,200 in out-of-pocket costs before reaching catastrophic coverage. In 2025, they’ll pay $2,000 total - and then the plan covers the rest. For people on multiple expensive drugs, this could mean saving thousands.

Also, 98% of Medicare Part D plans in 2025 will offer $0 copays for preferred generics. That’s up from 87% in 2024. Insulin is already capped at $35 a month - and that cap applies to both generic and brand insulin.

How to Find Your Real Costs

You can’t guess your drug costs. You have to check. Every year, by October 15, your plan must publish its formulary - the list of drugs it covers and how much you’ll pay for each. Use the Medicare Plan Finder tool. Enter your exact medications, your zip code, and your preferred pharmacy. It will show you the exact copay for each plan.

Don’t just look at the monthly premium. Look at your annual drug costs. A plan with a $10 premium but $100 brand copays could cost you $1,200 a year for one drug. A plan with a $50 premium but $40 brand copays might cost only $480. That’s a $720 difference.

What to Do If You Can’t Afford Your Meds

If you’re struggling to pay:

• Ask your doctor if there’s a generic or preferred brand alternative.
• Ask if you qualify for Extra Help or manufacturer patient assistance programs.
• Check if your pharmacy offers cash prices - sometimes, paying out of pocket without insurance is cheaper than using your copay.
• Call your plan’s customer service. Ask: “Is there a therapeutic alternative on a lower tier?”

A 2024 survey by the Medicare Rights Center found that 63% of people taking brand-name drugs had trouble affording them. Only 28% of people taking generics had the same problem. That gap isn’t about medication effectiveness - it’s about cost structure.

Bottom Line: Know Your Plan, Know Your Drugs

Generic drugs aren’t “weaker.” They’re the same medicine, made after the patent expires. They work the same. They’re just cheaper. And insurance plans want you to use them - because it saves everyone money.

If you’re on a brand-name drug and can’t switch, make sure you understand your plan’s rules. Know your copay. Know the difference between coinsurance and fixed copays. Know what happens if you choose the brand over the generic.

And if you’re paying more than $50 a month for a drug that has a generic version - it’s time to ask questions. You might be leaving hundreds - or thousands - of dollars on the table.