When you pick up a prescription, you might see a different name on the bottle than what your doctor wrote. That’s not a mistake-it’s the Therapeutic Equivalence Code at work. These simple letters-like AA, AP, or AT-are the FDA’s way of telling pharmacists: this generic version is safe to swap for the brand-name drug. It’s a system built to save money without sacrificing health. And it works. In 2022, over 90% of all prescriptions filled in the U.S. were for generic drugs, thanks largely to TE Codes.
What Are TE Codes and Why Do They Matter?
Therapeutic Equivalence Codes (TE Codes) are a standardized rating system created by the U.S. Food and Drug Administration to identify which generic drugs can be substituted for brand-name drugs without changing how well they work. These codes appear in the FDA’s Approved Drug Products With Therapeutic Equivalence Evaluations, commonly known as the Orange Book. First introduced in 1984 after the Hatch-Waxman Act, the system was designed to fix a big problem: pharmacists didn’t have clear rules about which generics could be swapped safely. Before TE Codes, switching from a brand to a generic was risky. Some states allowed it, others didn’t. Doctors were unsure. Patients got confused. The FDA stepped in to create one clear, science-based standard. Today, every state in the U.S. uses TE Codes to guide their pharmacy laws. If a drug has an “A” rating, pharmacists can substitute it automatically-unless the doctor says no. The real impact? Cost. Generic drugs with TE ratings cost 80-85% less than their brand-name equivalents. Since 1995, this system has saved the U.S. healthcare system over $2.2 trillion, according to former FDA director Janet Woodcock. That’s not just a number-it means millions of people can afford their blood pressure meds, thyroid pills, or antibiotics.How TE Codes Work: The A and B Ratings
Every TE Code starts with a letter: either A or B. That’s the core of the system.- A means the drug is therapeutically equivalent to the brand-name version. It has the same active ingredient, strength, dosage form, and route of administration-and it works the same way in your body.
- B means it’s not equivalent. These are either brand-name drugs with no generic alternatives, or generics that haven’t passed FDA testing.
- AA - Oral solution or powder for oral solution (like levothyroxine)
- AN - Injectable solution
- AO - Oral solution
- AP - Powder for injection
- AT - Topical cream
What Drugs Get TE Codes-and Which Don’t?
Not every drug gets a TE Code. The FDA only evaluates products that have multiple manufacturers. If only one company makes a drug, there’s no generic to compare it to-so no code is assigned. The system covers:- Generic drugs approved through the Abbreviated New Drug Application (ANDA) pathway
- Some drugs approved under 505(b)(2) applications (modified versions of existing drugs)
- Brand-name drugs that have generic equivalents (rarely evaluated unless they’re the reference product)
- Single-source generics (no competition)
- Biologics and biosimilars (though the FDA is working on extending TE codes to these by 2024)
- Complex formulations like inhalers, transdermal patches, and some topical steroids
How Pharmacists Use TE Codes Every Day
In a pharmacy, TE Codes are part of the routine. When a prescription comes in for a brand-name drug, the pharmacist checks the Orange Book-either online or through their pharmacy software (like Epic or Cerner). If the generic has an “A” rating, they can dispense it without calling the doctor. A 2022 survey by the National Community Pharmacists Association found 91% of pharmacists feel confident substituting TE-rated generics. Most say it adds less than 30 seconds to their workflow. Pharmacy schools now teach TE Codes as part of the core curriculum. Over 98% of 2022 pharmacy graduates passed the NAPLEX exam on interpreting these codes. Patients often don’t realize how much this system protects them. When you get a generic for your diabetes or high blood pressure, the pharmacist didn’t just pick the cheapest option. They checked the FDA’s official list. They made sure it met the same standards as the brand.When TE Codes Don’t Tell the Whole Story
Despite their success, TE Codes aren’t perfect. The biggest criticism comes from experts who work with drugs that have a narrow therapeutic index-medications where even tiny changes in dose can cause harm or reduce effectiveness. Drugs like warfarin (Coumadin), lithium, and phenytoin fall into this category. The FDA says these drugs are still eligible for TE ratings if they meet bioequivalence standards. But some doctors and patients report differences when switching between generics-even when both have the same “A” rating. A 2022 study in The American Journal of Managed Care found 12.7% of patients felt their medication didn’t work the same after switching to a TE-rated generic. Clinical tests showed no difference. But perception matters. Patients with chronic conditions often notice subtle changes-mood swings, fatigue, or irregular heart rhythms-that aren’t captured in blood tests. Dr. Jerry Avorn from Harvard calls this the “oversimplification problem.” He argues that for certain drugs, the 80-125% bioequivalence range is too broad. A 10% difference in absorption might be fine for an antibiotic-but risky for a blood thinner. The FDA acknowledges this. Their 2022 guidance says TE evaluations are “product-specific” and don’t guarantee equivalence in every clinical scenario. That’s why some doctors write “dispense as written” on prescriptions for these drugs. It’s not distrust of generics-it’s caution.
Real-World Impact: Savings, Access, and Trust
The numbers speak for themselves. In 2022, Americans filled 6 billion generic prescriptions. Over 90% of them were TE-rated. That’s not coincidence-it’s the system working. Brand-name drug makers lose market share fast once a generic enters. Within six months, their share drops from around 42% to just 24% for TE-rated drugs. That’s why companies invest millions in bioequivalence studies. The market for testing services alone is now worth $2.4 billion a year. Pharmacy benefit managers (PBMs) and hospitals rely on TE Codes to design formularies and reduce costs. All major PBMs use them. 97% of hospitals use TE ratings to swap drugs in their inventory. Patients benefit too. A GoodRx survey of over 2,300 users gave TE-rated generics a 4.7/5 rating for effectiveness in treating chronic conditions like hypertension and diabetes. Reddit threads from pharmacists show appreciation for the clarity TE Codes bring. One user wrote: “The AA code for levothyroxine eliminated so many insurance coverage headaches.”What’s Next for TE Codes?
The FDA isn’t resting. In 2023, they announced plans to expand TE Codes to cover biosimilars-complex, biologic drugs that mimic expensive treatments like Humira and Enbrel. This is a big deal. These drugs are harder to copy than pills, and their substitution rules are still evolving. They’re also testing ways to use real-world data-like patient reports and electronic health records-to improve TE evaluations. Right now, the system is based on lab studies. In the future, it might also consider how drugs perform in actual use. The goal? By 2027, 93.4% of all prescriptions in the U.S. will be for TE-rated generics. That’s the projection from Evaluate Pharma. And with the Congressional Budget Office estimating $1.2 trillion in savings between 2023 and 2032, the system’s future looks strong. The challenge? Making sure the system keeps up with science. As drugs get more complex-think inhalers, injectables, and personalized medicines-the old bioequivalence rules may need updating. The FDA is listening. They held a public workshop in 2022 to hear from patients, doctors, and pharmacists about where the system falls short.Bottom Line: Trust the Code, But Stay Informed
Therapeutic Equivalence Codes are one of the most successful public health tools in modern medicine. They’ve made life-saving drugs affordable without sacrificing safety. For most people, switching to a TE-rated generic is seamless and effective. But if you’re on a narrow therapeutic index drug-or if you notice a change in how you feel after switching generics-talk to your doctor. Don’t assume the code means everything is perfect. It’s a tool, not a guarantee. The system works because it’s based on science, transparency, and trust. And for the millions of Americans who rely on generics every day, that’s exactly what they need.What does an 'A' rating mean in TE Codes?
An 'A' rating 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, and it delivers the same clinical effect and safety profile. Pharmacists can substitute it without needing a new prescription.
Are all generic drugs TE-rated?
No. Only generic drugs that have been evaluated and approved by the FDA for therapeutic equivalence receive a TE Code. Some generics, especially for complex drugs like inhalers or biologics, may not have an 'A' rating. Others may not have been evaluated at all if they’re the only version on the market.
Can I ask my pharmacist to give me the brand instead of a generic?
Yes. Even if a generic has an 'A' rating, you can request the brand-name version. Your pharmacist will need to check if your insurance covers it and may charge you more. Some doctors also write 'dispense as written' on the prescription to prevent substitution.
Why do some patients feel different after switching to a generic?
Even with identical TE ratings, small differences in inactive ingredients, pill shape, or how the drug is absorbed can affect how a patient feels. This is more common with drugs that have a narrow therapeutic index, like warfarin or levothyroxine. Clinical studies often show no difference, but patient perception matters. If you notice changes, talk to your doctor.
Where can I check a drug’s TE Code?
The FDA’s Orange Book is the official source. You can search it for free at fda.gov/orangebook. Most pharmacy software also pulls TE Codes automatically. You can also ask your pharmacist to show you the rating.
