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 called Therapeutic Equivalence Codes-or TE codes-that tells pharmacists whether it’s safe to substitute one drug for another. This isn’t just a bureaucratic label. It’s what keeps millions of Americans on affordable meds without risking their health.
What Are TE Codes and Why Do They Matter?
Therapeutic Equivalence Codes are a rating system created by the U.S. Food and Drug Administration (FDA) to identify which generic drugs can be safely swapped for their brand-name counterparts. They appear in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, better known as the Orange Book. First introduced in 1984 after the Hatch-Waxman Act, TE codes were designed to bring clarity to a messy system where pharmacists in different states had different rules about swapping drugs. The goal? Save money without sacrificing safety. Generic drugs with a TE rating typically cost 80-85% less than brand-name versions. In 2022 alone, over 6 billion generic prescriptions were filled in the U.S.-most of them because of TE codes. Without this system, pharmacies couldn’t automatically substitute generics, and patients would pay hundreds more each year for the same active ingredient.How TE Codes Work: The A and B System
Every TE code starts with a letter: A or B. That’s it. But what those letters mean is everything. - A means the generic drug is therapeutically equivalent to the brand-name drug. It has the same active ingredient, strength, dosage form, and route of administration. More importantly, it’s been proven to work the same way in the body-absorbed at the same rate and to the same extent. These are the drugs pharmacists can swap without asking the doctor. - B means the FDA doesn’t consider the drug equivalent. This could be because of differences in how it’s absorbed, how stable it is, or even because it hasn’t been tested enough. These drugs are not approved for automatic substitution. The second letter adds detail. For example: - AA: Powder for oral solution (like some antibiotics) - AN: Injectable solution - AO: Oral solution - AP: Powder for injection - AT: Topical cream These codes aren’t random-they reflect how the drug is made and how it behaves in the body. A generic with an AA rating for levothyroxine (a thyroid hormone) has been shown to deliver the exact same hormone levels as Synthroid. That’s why pharmacists can confidently switch patients between different AA-rated brands without causing side effects.How the FDA Decides if a Drug Is Equivalent
The FDA doesn’t guess. They require hard evidence. For a generic drug to get an A rating, the manufacturer must prove three things:- Pharmaceutical equivalence: Same active ingredient, same dose, same form (pill, injection, etc.), same manufacturer (or licensed partner).
- Bioequivalence: The generic must absorb into the bloodstream at the same rate and to the same extent as the brand. This is tested using blood samples from healthy volunteers. The FDA requires that the generic’s absorption levels fall within 80-125% of the brand’s. That’s a tight window.
- Clinical equivalence: No meaningful difference in how the drug works in patients. This is often proven through bioequivalence data, but for complex drugs, additional studies may be needed.
Where TE Codes Work Best-and Where They Don’t
TE codes shine with simple, well-understood drugs. Take atorvastatin (the generic for Lipitor). Multiple studies, including a 2021 analysis in JAMA Internal Medicine, found no difference in cholesterol-lowering effects between brand and generic versions-even when patients switched between different generic brands. But not all drugs are so straightforward. Narrow therapeutic index (NTI) drugs are a problem. These are medications where even tiny changes in blood levels can cause serious harm. Warfarin (a blood thinner), levothyroxine, and phenytoin (an anti-seizure drug) fall into this category. Even though many generics for these drugs have an A rating, some patients report feeling different after switching. A 2022 study in The American Journal of Managed Care found 12.7% of patients reported symptoms after switching-even when clinical tests showed no difference. That’s why some doctors still write “Do Not Substitute” on prescriptions for these drugs. Complex products like inhalers, topical creams, and injectables are also tricky. The active ingredient might be the same, but the way it’s delivered can change how well it works. The FDA is working on new TE code extensions for these drugs, but as of 2025, the system still struggles with them.How Pharmacists Use TE Codes Every Day
In a pharmacy, TE codes are checked in seconds. Most pharmacy systems-like Epic, Cerner, or even GoodRx-pull data directly from the FDA’s online Orange Book. When a prescription comes in for a brand-name drug, the system automatically flags if there’s an A-rated generic available. Pharmacists don’t need to be experts. Pharmacy schools now teach TE codes as part of the core curriculum. Over 98% of 2022 pharmacy graduates passed the NAPLEX exam with solid TE code knowledge. And in practice? 91% of pharmacists say they have high confidence in substituting A-rated generics, according to the National Community Pharmacists Association. The process is simple:- Prescription comes in for brand-name drug (e.g., Prilosec).
- Pharmacy system checks Orange Book for generic equivalents.
- If an A-rated generic exists (e.g., omeprazole), the system suggests substitution.
- Pharmacist confirms no “Do Not Substitute” note from the doctor.
- Generic is dispensed.
Why TE Codes Are Different from Other Countries
The U.S. system is unique. In Europe, the European Medicines Agency (EMA) doesn’t use a standardized coding system. Instead, each country decides whether to allow substitution. In Canada, there’s a similar concept, but no uniform code. In Germany, the doctor decides-not the pharmacist. The U.S. system works because it’s built into state law. All 50 states have laws that allow pharmacists to substitute A-rated generics unless the doctor says no. That means a patient in Texas can get the same generic drug as someone in Maine, and both are covered under the same safety standard.What Patients Should Know
If you’re taking a generic drug, you’re not getting a “lesser” version. You’re getting a drug that’s been proven to work the same way. But here’s what you should do:- If you’re on a narrow therapeutic index drug (like warfarin or levothyroxine), stick with the same generic brand if possible. If you switch and feel different, tell your doctor.
- Don’t assume all generics are the same. Two A-rated generics can still have different fillers or coatings. If you notice a change in how you feel after switching brands, report it.
- Ask your pharmacist: “Is this the same TE code as my last prescription?” They can check the Orange Book in real time.
- If your insurance pushes you to switch generics, ask if the new one has the same TE code. If it does, it’s safe.
The Future of TE Codes
The FDA is updating the system. In 2022, they released new guidance to standardize how they evaluate complex drugs. By 2024, they plan to extend TE codes to biosimilars-generic versions of biologic drugs like Humira and Enbrel. These are far more complex than pills, and the current system isn’t built for them. The agency is also testing ways to use real-world patient data-like electronic health records-to supplement lab tests. This could help catch subtle differences that lab studies miss. By 2027, experts predict TE-rated generics will make up 93.4% of all prescriptions filled in the U.S. That’s up from 90.1% in 2022. The savings are huge: the Congressional Budget Office estimates TE codes will save $1.2 trillion between 2023 and 2032. The system isn’t perfect. But for most people, most of the time, it works. And that’s what matters.What does an A-rated TE code mean for my prescription?
An A-rated TE code means the generic drug has been proven by the FDA to be therapeutically equivalent to the brand-name version. It has the same active ingredient, strength, dosage form, and absorption rate. Pharmacists can legally substitute it without asking your doctor, and it will work the same way in your body.
Can I switch between different A-rated generics?
Yes, you can. Two different generics with the same A rating are considered interchangeable by the FDA. But if you’re taking a narrow therapeutic index drug like warfarin or levothyroxine, some patients report feeling different after switching brands-even if clinical tests show no difference. If you notice changes in how you feel, tell your doctor and ask to stick with one brand.
Why do some doctors write "Do Not Substitute" on prescriptions?
Doctors often write this for drugs with a narrow therapeutic index-like blood thinners, thyroid meds, or seizure drugs-where even small changes in absorption can cause serious side effects. While the FDA says A-rated generics are equivalent, some doctors prefer to avoid any risk, especially if a patient has been stable on one brand. It’s a precaution, not a reflection of the generic’s quality.
Are TE codes used outside the United States?
No, the TE code system is unique to the U.S. Other countries use different methods. The European Medicines Agency doesn’t have a standardized coding system. Canada and Australia have equivalence assessments but no official codes like the FDA’s. In Germany, substitution is decided by the doctor, not the pharmacist. The U.S. system is the only one integrated into state law and pharmacy practice nationwide.
How do I check if my generic drug has a TE code?
You can check the FDA’s Orange Book online at fda.gov/orangebook. Enter the brand name or generic name, and the system will show the TE code. Most pharmacy apps and insurance websites also display this information. If you’re unsure, ask your pharmacist-they can look it up in seconds using the same database.
