Therapeutic Equivalence Codes: How the FDA Determines If Generic Drugs Can Be Swapped

When your pharmacist hands you a pill bottle with a different name than what your doctor prescribed, you might wonder: is this really the same thing? The answer lies in a quiet but powerful system the FDA uses to decide which generic drugs can be swapped for brand-name ones - therapeutic equivalence codes.

What therapeutic equivalence really means

Therapeutic equivalence doesn’t just mean two drugs have the same active ingredient. It means they work the same way in your body, produce the same results, and carry the same safety profile. The FDA doesn’t guess at this. They test it - rigorously.

For a generic drug to get an ‘A’ rating, it must pass three checks:

• It has the same active ingredient, strength, dosage form, and route of administration as the brand-name drug (that’s pharmaceutical equivalence).
• It’s bioequivalent - meaning your body absorbs it at the same rate and to the same extent as the original.
• There’s no evidence it behaves differently in real-world use.

Only then does the FDA assign it an ‘A’ code. This isn’t just paperwork. It’s the legal basis for substitution in pharmacies across the country.

The Orange Book: the FDA’s secret weapon

The system lives in a document called the Approved Drug Products with Therapeutic Equivalence Evaluations - better known as the Orange Book. First published in 1980, it’s updated monthly and lists every approved drug in the U.S. with its therapeutic equivalence code.

You won’t find it on pharmacy shelves, but pharmacists check it daily. In 2023, the Orange Book website got over 1.7 million visits in just one quarter. That’s not patients searching - that’s pharmacists, doctors, and health systems relying on it to make safe decisions.

The Orange Book doesn’t rate every drug. Only multisource prescription drugs - those with multiple manufacturers - get codes. Brand-name drugs without generics? They’re listed as Reference Listed Drugs (RLDs). Over-the-counter medicines? Not rated at all. The system is built for prescriptions where substitution matters most.

Decoding the letters: A, B, and what they really mean

The codes are simple on the surface but packed with meaning. The first letter tells you everything:

• A = Therapeutically equivalent. You can swap it without worry.
• B = Not rated as equivalent. Don’t substitute unless your doctor says so.

But ‘A’ isn’t just ‘A’. There are subcodes that matter:

• AB = Meets bioequivalence standards. This is the most common code - over 90% of generics fall here.
• AB1, AB2, AB3, AB4 = Used when multiple brand-name versions exist. For example, if three different brands of metformin are approved, each generic version gets an AB code tied to the specific brand it matches.

The ‘B’ codes are more complex. They’re not a red flag - they’re a caution sign. A ‘B’ rating doesn’t mean the drug is unsafe. It means the FDA doesn’t have enough data to confirm it works the same way. Common ‘B’ codes include:

• BC = Extended-release tablets or capsules with unclear bioequivalence
• BT = Topical creams or ointments where absorption is hard to measure
• BN = Inhalers or nebulizer products
• BX = Not enough data to judge - often new or complex generics

In 2023, about 12,600 of the 14,000 drugs listed in the Orange Book had an ‘A’ rating. That’s 90%. But the 10% with ‘B’ ratings? They’re often the most important - and most misunderstood.

Why some generics get ‘B’ ratings - and why it matters

You might think a generic with a ‘B’ rating is inferior. It’s not. Often, it’s just harder to prove.

Take topical corticosteroid creams. Two creams might have the same active ingredient and concentration. But if one absorbs slightly differently into the skin, the effect on inflammation could vary. Standard blood tests can’t measure that. The FDA doesn’t have a reliable method yet - so they give it a ‘BT’ code.

The same goes for inhalers, injectables, and complex formulations. The science to prove they’re equivalent is still evolving. The FDA admits this. In their 2022 draft guidance, they acknowledged that current bioequivalence tests often fail for these products.

This creates a real problem. Pharmacists may refuse to substitute a ‘B’-rated drug - even if the doctor thinks it’s fine. A 2022 AMA survey found 42% of physicians were confused by ‘B’ codes. Some pharmacists over-cautiously block substitutions. Others, unaware of the nuances, swap them anyway. Both can hurt patients.

How this system saves money - and why it’s trusted

The U.S. spends $370 billion a year on prescription drugs. Generics make up 90% of prescriptions but only 23% of costs. That’s because of therapeutic equivalence codes.

Without them, pharmacists couldn’t legally swap drugs. Insurance companies wouldn’t push generics. Patients would pay more. The system works because it’s backed by science - not just policy.

Pharmacists spend an average of 2.7 minutes per prescription checking the Orange Book. That adds up. But it saves $1.2 billion a year in avoided brand-name costs.

And here’s something remarkable: since the system started in 1984, there’s never been a documented case of a patient harmed by an FDA-approved generic substitution. That’s not luck. It’s the result of strict standards.

What you should do as a patient

You don’t need to memorize AB1 vs BT. But you should know this:

• If your prescription says ‘substitution permitted’ and you get a different name - that’s normal. The system is working.
• If you get a generic and feel different - tell your doctor. It’s rare, but possible.
• If your doctor writes ‘dispense as written’ or ‘no substitution’ - that overrides the code. Always follow their instructions.
• If you see a ‘B’ code on your bottle and you’re unsure - ask your pharmacist. They’re trained to explain it.

Don’t assume a ‘B’ code means the drug is bad. It just means the FDA needs more data. Many ‘B’-rated drugs are perfectly safe and effective. The code isn’t a verdict - it’s a flag for extra review.

The future of therapeutic equivalence

The FDA isn’t standing still. They’re working on new ways to evaluate complex drugs - especially inhalers, topical products, and injectables. Their 2023-2027 plan aims to cut ‘B’ ratings for these products by 30% by 2027.

How? By using real-world data - not just lab tests. If thousands of patients use a generic inhaler and get the same results as the brand, that counts. The FDA is starting to accept this kind of evidence.

They’re also expanding their Product-Specific Guidelines to over 1,850 drugs. These are detailed roadmaps for manufacturers to prove bioequivalence - making it easier to get ‘A’ ratings.

The goal? More generics. Lower prices. No compromise on safety.