Money & Career

Which is better: generic or name-brand products?

Our money expert looks at over-the-counter products to see if there's a difference behind the label.

Pills in a blister pack on a white background


Open my medicine cabinet and you’re not likely to see any brand name pain meds. Generic ibuprofen and acetaminophen are so much cheaper than big name brands that it doesn’t make any sense for me to buy anything else. On my last trip to the grocery store for example, a bottle of Extra Strength Advil (32, 400 mg capsules) cost $9.99. The generic version sitting right next to it on the shelf was just $7.99. Put the generic brand on sale and you’re looking at half the price for the exact same product!

Which begs the question — why would anybody by the brand name drug?

According to a new study by a group of economists at the University of Chicago’s Booth school, knowledge is king. People buying the brand name pills simply don’t know the generic box contains the same thing as the flashy red or blue box next to it. The study looked a whopping 66 million shopping trips made by Americans to make its conclusions. It finds that doctors, nurses and pharmacists are far, far less likely to buy brands than average consumers. Pharmacists devote 90 percent of headache remedies to generic brands while the average consumer heads for name brands 71 percent of the time.

The huge gap shows the role that information plays when it comes to our purchasing patterns — we buy brands when we lack information about the product. Those in the know (i.e., healthcare professionals) don’t need the brand name to tell them what’s inside.

It makes sense. A few years ago, I offered a colleague a generic acetaminophen tablet because she had a bad headache. She refused the medication because her doctor said she could only take Tylenol: she was worried the generic brand wasn’t the same thing. It was, but without the reassuring red label, she felt it was too risky.

Sure, multisyllabic, pharmaceutical terms seem to leave us reaching for brands — but what role does knowledge play when it comes to other brand choices, like pop or soup or ketchup? The same researchers still found a difference when they looked and food and drink, but the gap was a lot less pronounced. Which makes a lot of sense when you consider that the taste of things like colas, ketchups and potato chips can vary widely from brand to brand.

Interesting findings. And they show how important it is to read the label before making a purchase. Especially when you’re trying to save money and avoid paying more for a logo.

What brand names do you buy and why? And are you more likely to buy generic? Please comment below.

Money expert Caroline Cakebread has been writing for since 2006. She is a recovering academic and the mother of two small kids. She lives in Toronto where she writes and reads about all things financial. Follow Caroline at