TL;DR
- FDA finalized its Evaluation of Therapeutic Equivalence guidance in August 2026.
- It explains how FDA evaluates therapeutic equivalence and assigns TE codes in the Orange Book.
- Therapeutic equivalence is different from simply being FDA-approved.
- TE evaluations help state agencies, prescribers and pharmacists make drug-selection and substitution decisions.
- Drug companies, pharmacy teams and market-access professionals should understand what a TE code does and just as importantly, what it does not prove.
Why This Matters
Two products can contain the same active ingredient.
Both can be FDA approved.
They can even look like obvious substitutes.
And FDA still may not consider them therapeutically equivalent.
That distinction matters because Orange Book TE codes influence how pharmacists, state systems and healthcare professionals think about substitution.
FDA finalized its guidance on therapeutic-equivalence evaluations after issuing a draft in July 2022. The final guidance explains FDA’s approach to evaluating multisource prescription drug products and assigning TE codes.
For generic manufacturers, 505(b)(2) sponsors, pharmacy leaders and regulatory professionals, this guidance is useful because it separates three concepts that are often blurred together:
approval, pharmaceutical equivalence and therapeutic equivalence.
What Does “Therapeutically Equivalent” Mean?
FDA’s regulatory definition says therapeutically equivalent products are approved products that are pharmaceutical equivalents, have demonstrated bioequivalence, and can be expected to have the same clinical effect and safety profile when used according to their labeling.
That is more specific than saying:
“Both products contain the same drug.”
FDA’s Orange Book contains therapeutic-equivalence evaluations for approved multisource prescription products. The agency says these evaluations are intended as public information and advice for state health agencies, prescribers and pharmacists and can support drug-product selection and healthcare cost containment.
What a TE Code Does Not Tell You
One of the most useful lessons is that therapeutic equivalence does not mean the products are physically identical.
FDA notes that therapeutically equivalent products can still differ in areas such as:
- tablet shape;
- scoring;
- packaging;
- excipients;
- colors or flavors;
- preservatives;
- expiration;
- some labeling characteristics.
Those differences may matter for an individual patient.
For example, a patient might react to an excipient, find a different tablet harder to split, or become confused when the appearance of a long-term medicine changes.
FDA therefore explicitly says healthcare professionals still need to exercise professional judgment when selecting and substituting products.
Why 505(b)(2) Sponsors Should Pay Attention
A 505(b)(2) product may rely partly on FDA’s findings for another approved drug, but that does not mean FDA will automatically rate the new product therapeutically equivalent to the referenced listed drug.
FDA’s recently issued draft guidance on choosing between an ANDA and a 505(b)(2) application reiterates that products approved through 505(b)(2) do not necessarily receive therapeutic-equivalence ratings against referenced drugs.
This creates an important commercial-development question:
Is approval enough for the intended business model—or does the product strategy depend on substitution?
Those are not always the same objective.
Where Companies Can Get Caught
A commercial team may assume:
“Once FDA approves our product, pharmacies will substitute it.”
Regulatory may know the situation is more complicated.
If the commercial model relies heavily on automatic substitution, the TE strategy should be understood during development, not after approval.
This can affect:
- application pathway;
- bioequivalence strategy;
- formulation choices;
- labeling;
- market-access forecasts;
- payer assumptions.
What Should Regulatory Teams Check?
For products where substitution matters, document:
Application pathway → Reference product → Pharmaceutical equivalence → Bioequivalence evidence → TE evaluation status → Orange Book code → Commercial implications
Do not let “generic-like product” become an internal shorthand that hides the actual FDA status.
What Pharmacy and Market-Access Teams Should Check
The Orange Book is useful, but TE ratings do not replace professional judgment.
Healthcare organizations should also consider:
- dosage form;
- route;
- strength;
- storage;
- excipients;
- device constituent differences;
- scoring;
- patient-specific considerations.
A TE code is evidence for substitution decisions not permission to ignore every product difference.
Example
Suppose two oral drug products use the same active ingredient and strength.
Both are FDA approved.
One was approved under an ANDA after demonstrating pharmaceutical equivalence and bioequivalence.
The other was approved through 505(b)(2) with a modified formulation.
A procurement team might view them as interchangeable because the ingredient name looks identical.
FDA’s TE framework asks a more precise question:
Has FDA actually determined that these products meet the therapeutic-equivalence criteria?
That answer belongs in the Orange Book not in assumptions based on product names.
What Changed and What Did Not?
The final guidance clarifies FDA’s thinking around TE evaluations and codes.
It does not create a new blanket rule requiring healthcare professionals to substitute products.
And it does not mean every FDA-approved drug receives a therapeutic-equivalence evaluation.
The guidance is final Level 1 guidance, representing FDA’s current thinking rather than creating a separate new statute.
Frequently Asked Questions
What is therapeutic equivalence?
FDA considers approved drug products therapeutically equivalent when they are pharmaceutical equivalents, have demonstrated bioequivalence and can be expected to have the same clinical effect and safety profile under labeled conditions of use.
Where are FDA therapeutic-equivalence ratings published?
FDA publishes them in the Orange Book, formally titled Approved Drug Products With Therapeutic Equivalence Evaluations.
Does FDA approval automatically give a product an AB rating?
No. Approval and therapeutic-equivalence evaluation are separate concepts.
Can therapeutically equivalent products look different?
Yes. FDA notes possible differences in shape, color, scoring, packaging, excipients and other characteristics that do not prevent a TE determination.
Are all 505(b)(2) products therapeutically equivalent to their referenced drugs?
No. FDA notes that products approved through 505(b)(2) are not necessarily evaluated or rated as therapeutically equivalent to their referenced listed drugs.
Is the August 2026 guidance final?
Yes. FDA identifies it as Final Level 1 Guidance.
Does therapeutic equivalence eliminate pharmacist judgment?
No. FDA specifically notes that professional care and judgment remain important when selecting or substituting drug products.
