Short answer: Generics are copies of conventional brand-name drugs with the same active ingredient and lower cost. Biosimilars are highly similar versions of complex biologic drugs. Both are FDA-approved and usually sit on cheaper formulary tiers than brand names.
A generic drug contains the same active ingredient, strength, and dosage form as a brand-name drug and must meet the FDA’s standards for being therapeutically equivalent. Generics typically cost much less because the manufacturer did not bear the original research and marketing expense.
Biologic drugs are made from living cells and are far more complex than conventional pills. A biosimilar is a product that is highly similar to an FDA-approved biologic with no clinically meaningful differences in safety or effectiveness. Some biosimilars are also designated interchangeable, meaning a pharmacist may substitute them under state law much like a generic.
Your plan’s formulary sorts drugs into tiers, and generics and biosimilars usually fall on lower (cheaper) tiers than brand names. If a brand drug is prescribed when a generic or biosimilar exists, you may pay the difference, so it is worth asking your doctor or pharmacist whether a lower-cost equivalent is appropriate.