In terms of insurance, what is often true about generic drugs compared to brand name drugs?

Generic drugs are typically covered in lower tiers of insurance plans compared to brand name drugs. This is because generics are often less expensive and considered to be therapeutically equivalent to their brand name counterparts. Insurance companies generally incentivize the use of generics by placing them in lower cost tiers, which results in lower co-pays for the patient and reduces overall healthcare expenditures for both the insurer and the insured. This tiered system encourages patients to opt for generics, thereby making medications more affordable.

In contrast, brand name drugs are generally placed in higher tiers due to their higher cost and the fact that they may not have a direct generic equivalent immediately available. As a result, the co-pay for brand name medications is typically higher, which can discourage their use when a generic option is available. The other options imply scenarios that do not align with how insurance typically operates in regard to generic versus brand name medication coverage.