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

When your pharmacist hands you a generic pill instead of the brand-name drug your doctor prescribed, you might wonder: Is this really the same thing? It’s not just a label swap. Behind every generic drug you pick up is a rigorous, science-backed system called therapeutic equivalence codes - and it’s the reason you can trust that generic to work just like the brand.

What Therapeutic Equivalence Codes Actually Mean

The FDA doesn’t just approve generics because they look similar or cost less. They have to prove they’re therapeutically equivalent - meaning they deliver the same active ingredient, in the same amount, at the same rate, and produce the same clinical effect and safety profile as the brand-name drug. That’s where the Orange Book comes in.

Officially called Approved Drug Products with Therapeutic Equivalence Evaluations, the Orange Book has been the FDA’s go-to reference since 1980. Every multisource prescription drug - meaning any drug made by more than one company - gets a code. These codes are short, two-letter labels like AB, BC, or BX. The first letter tells you everything you need to know about substitution.

If a drug has an A as its first letter, it means the FDA has confirmed it can be safely swapped for the brand-name version - or for any other generic with the same code. That’s the gold standard. Over 90% of generic drugs in the U.S. carry an ‘A’ rating. That’s why pharmacists can automatically substitute them in 49 states without asking your doctor.

Understanding the ‘A’ Codes: AB, AB1, AB2, and So On

Not all ‘A’ ratings are the same. The second letter gives more detail. The most common is AB. This means the generic has passed bioequivalence testing - it releases the drug into your bloodstream at the same rate and amount as the brand. For simple pills like metformin or lisinopril, this is straightforward. The body absorbs them the same way, no matter who made them.

But here’s where it gets tricky: some drugs have multiple brand-name versions (called Reference Listed Drugs, or RLDs). If two generics are both equivalent to different brand versions, they can’t always be swapped with each other. That’s why you see codes like AB1, AB2, AB3, and AB4. Each number points to a different reference drug. If your prescription says AB1, your pharmacist can only substitute another AB1 - not an AB2, even if both are labeled as generics.

Pharmacists check this every time. In fact, a 2023 survey found that 73% of community pharmacists consult the Orange Book at least once a week to confirm these codes. One wrong substitution could mean a patient gets a drug that doesn’t work the same way - even if both are technically generics.

What the ‘B’ Codes Really Tell You

Now, here’s the part that causes confusion: B codes. If a drug has a ‘B’ as its first letter, it means the FDA has not determined it’s therapeutically equivalent. That doesn’t mean it’s unsafe. It means there’s not enough proof yet - or there are complications.

Some common ‘B’ codes:

• BC - Extended-release products where bioequivalence is hard to prove
• BT - Topical creams or gels with delivery issues
• BN - Inhalers or nebulizers
• BP - Products with known bioequivalence problems
• BX - Not enough data to decide

For example, a generic asthma inhaler might have a BN code because the way the drug is aerosolized matters. Two inhalers can have the same active ingredient, but if the spray pattern or particle size is off, the drug won’t reach the lungs the same way. Bioequivalence studies for these products are harder to design and interpret. So even if the generic is cheaper, it can’t be automatically substituted.

A 2022 American Medical Association survey found that 42% of doctors don’t fully understand what ‘B’ codes mean. Some think they’re unsafe. Others think they’re just as good. The truth? They’re in a gray zone. Some ‘B’-rated products are clinically fine - but the FDA needs more data before giving them an ‘A’.

Why This System Matters for Your Health and Wallet

The U.S. spends about $470 billion on prescription drugs every year. Generics make up 90% of prescriptions but only 23% of that cost. That’s $370 billion saved annually - mostly because of therapeutic equivalence codes.

Without the Orange Book and its clear codes, pharmacists couldn’t substitute generics with confidence. Doctors wouldn’t know which ones are interchangeable. Patients might pay more than they need to. The entire system is built on trust - trust that the science is solid, and that the FDA’s evaluations are consistent.

And it works. Since the system started, there have been no documented cases of therapeutic failure directly caused by substituting an FDA-approved generic drug. That’s not luck. It’s science.

Where the System Falls Short

The TE code system was designed for simple, oral tablets. It’s brilliant for drugs like atorvastatin or amoxicillin. But it struggles with complex products - things like injectables, inhalers, topical creams, and extended-release formulations.

For these, traditional bioequivalence studies - which measure drug levels in the blood - don’t always capture what matters. A cream might absorb differently on different skin types. An inhaler might deposit differently in the lungs. A slow-release pill might break down unpredictably in different stomach environments.

The FDA admits this. In their 2022 draft guidance, they acknowledged that current methods aren’t enough for complex generics. That’s why the number of ‘B’-rated applications for these products rose 22% between 2018 and 2022.

Experts like Dr. Duxin Sun from the University of Michigan warn that we’re relying on outdated tools for modern drugs. The FDA’s goal is to reduce ‘B’ ratings for complex generics by 30% by 2027. That means new testing methods - maybe using real-world data, advanced imaging, or in vitro models - will be needed.

What You Should Do as a Patient

You don’t need to memorize AB1 or BX. But you should know this:

• If your prescription says “generic,” and you get a pill that looks different - that’s normal. The color, shape, or imprint doesn’t matter. What matters is the active ingredient and the TE code.
• If your pharmacist says they can’t substitute your drug, ask why. If it’s a ‘B’ code, they’re following the rules. But if they say it’s “not safe,” they might be mistaken.
• Always check the label. The active ingredient should match your brand-name drug exactly.
• If you notice a change in how you feel after switching - fatigue, dizziness, or reduced effectiveness - tell your doctor. It’s rare, but it can happen, especially with complex drugs.

Most people never have an issue. But when you’re on a drug that controls blood pressure, seizures, or thyroid function, even small differences matter. That’s why the system exists - to prevent those small differences from becoming big problems.

How Pharmacists Use the Orange Book Every Day

Pharmacists don’t guess. They look it up. The FDA’s Orange Book website gets over 1.7 million visits per quarter. That’s doctors, pharmacists, and even insurance companies checking codes before approving a claim.

Each time a pharmacist fills a prescription, they check:

1. Is the generic pharmaceutically equivalent? (Same ingredient, dose, form, route)
2. What’s the TE code?
3. Is it an ‘A’ code? If yes, substitution is allowed.
4. If it’s a ‘B’ code, do state laws require me to notify the prescriber?

In 38 states, pharmacists must contact the doctor before substituting a ‘B’-rated drug. In others, they can’t substitute at all. That’s why your experience might vary depending on where you live.

What’s Next for Therapeutic Equivalence?

The FDA isn’t resting. They’re updating their methods. They’ve created over 1,850 Product-Specific Guidelines - detailed roadmaps for how to test bioequivalence for specific drugs. These help manufacturers design better generics and get ‘A’ ratings faster.

Future changes might include:

• Using real-world data from electronic health records to supplement lab studies
• Testing drug absorption in different patient populations (like elderly or obese patients)
• Standardizing testing for inhalers and topical products

The goal? To make sure every generic - no matter how complex - can be trusted to work just like the brand. Because in healthcare, saving money shouldn’t mean sacrificing safety.