When you pick up a prescription, you might not notice the difference between the brand-name pill and the generic one sitting in your bag. But behind that swap is a detailed, science-backed system the FDA uses to decide if it’s safe to substitute one for the other. That system? Therapeutic equivalence codes. These two-letter codes-like AB, BC, or BX-are not just bureaucratic labels. They tell pharmacists exactly which generics can be swapped without risking your health or treatment outcome.

What Therapeutic Equivalence Really Means

Therapeutic equivalence isn’t about pills looking the same or costing less. It’s about whether two drugs-brand and generic-deliver the same clinical effect and safety profile when used the same way. The FDA doesn’t just assume they work the same. They require proof.

To earn an ‘A’ rating, a generic must meet three strict criteria:

• It must contain the same active ingredient, strength, dosage form, and route of administration as the brand-name drug (that’s pharmaceutical equivalence).
• It must show bioequivalence-meaning it gets into your bloodstream at the same rate and amount as the brand.
• It must have the same labeling and be manufactured under the same quality standards.

Only then does the FDA assign it a therapeutic equivalence code. Over 90% of approved generic drugs in the U.S. carry an ‘A’ rating. That’s why pharmacists can swap them automatically in 49 states without asking your doctor.

Decoding the Letters: A vs. B Ratings

The first letter tells you everything. ‘A’ means substitutable. ‘B’ means not recommended for substitution-unless your doctor says otherwise.

But ‘A’ isn’t just ‘A’. There are subcategories:

• AB: The most common. The generic has passed bioequivalence testing against the original brand. AB1, AB2, AB3, AB4? Those mean there are multiple brand-name versions (called Reference Listed Drugs), and the generic matches one of them specifically.
• BC: Extended-release tablets or capsules with potential bioequivalence issues. These are tricky because how the drug releases over time matters.
• BT: Topical products like creams or gels. Skin absorption is hard to measure, so these often get a ‘B’ even if they seem identical.
• BN: Aerosol inhalers. The delivery device affects how much drug reaches your lungs, making bioequivalence harder to prove.
• BX: Not enough data. The FDA hasn’t seen enough studies to say whether it’s safe to substitute.

Don’t assume a ‘B’ code means the generic is bad. It just means the science isn’t clear enough yet to guarantee substitution won’t change your outcome. For example, a topical steroid with a ‘BT’ code might work just as well as the brand-but the FDA can’t be certain because skin absorption varies too much between people.

Why the System Exists-and Why It Matters

The U.S. generic drug market saves patients and insurers about $370 billion a year. Without therapeutic equivalence codes, pharmacies couldn’t swap generics automatically. Doctors would have to write ‘Dispense as Written’ on every script. Pharmacists would need to call every prescriber for approval.

The Orange Book-the FDA’s official list of approved drugs with therapeutic equivalence ratings-makes this possible. It’s updated monthly. Pharmacists check it weekly. In fact, a 2022 survey found that 87% of community pharmacists rely on it to make substitution decisions.

But here’s the catch: not all doctors know how to read these codes. A 2022 AMA survey showed that 42% of physicians were confused by ‘B’ ratings. Some refused substitution even when the generic was appropriate. Others didn’t realize a ‘B’ didn’t mean the drug was unsafe-just that substitution wasn’t automatically approved.

Where the System Falls Short

The FDA’s system works great for simple pills-like metformin or lisinopril. But it struggles with complex products.

Take inhalers. Two inhalers might have the same drug and dose, but if the spray mechanism or particle size differs slightly, the amount reaching your lungs can vary. That’s why many inhaled generics get ‘BN’ codes-even if they’re clinically effective.

Same with topical creams. A generic cortisone cream might have the same active ingredient, but if the base (the cream’s texture) changes, absorption changes. The FDA’s current bioequivalence tests don’t fully capture that.

Dr. Duxin Sun from the University of Michigan pointed out in a 2022 study that the current system was designed for simple oral drugs. It wasn’t built for injectables, transdermal patches, or complex nasal sprays. That’s why the FDA is working on new guidelines to improve how it evaluates these products.

What You Should Know as a Patient

You don’t need to memorize codes. But here’s what to do:

• If your pharmacist gives you a generic, check the label. If it’s an ‘A’ code, you’re good to go. No action needed.
• If you get a generic with a ‘B’ code, ask your pharmacist: ‘Is this safe to substitute?’ They can tell you why it got that rating.
• If your doctor writes ‘Dispense as Written’ or ‘Do Not Substitute,’ they’re overriding the system. That’s their right-and sometimes necessary.
• Never assume a ‘B’ code means the drug doesn’t work. It just means substitution isn’t automatic. You might still take it-just not swapped without approval.

For most people, generic drugs are safe, effective, and cost-saving. The FDA’s therapeutic equivalence system exists to protect that. It’s not perfect, but it’s the most reliable tool we have to ensure that a $4 generic pill does the same job as a $40 brand-name one.

What’s Changing in 2025?

The FDA is updating its approach. In 2022, they released draft guidance to improve how they evaluate complex generics. By 2027, they aim to cut ‘B’ ratings for complex products by 30%. That means more inhalers, creams, and injectables could get ‘A’ codes in the future.

They’re also using more real-world data-like patient outcomes from electronic health records-not just lab tests. This could help close the gap for products where traditional bioequivalence studies fall short.

For now, the system still works. Over 12,600 of the 14,000 drugs listed in the 2023 Orange Book have an ‘A’ rating. That’s why 90% of prescriptions in the U.S. are filled with generics-and why you’re saving hundreds, sometimes thousands, a year without even knowing it.