Birkett (2009) describes bioequivalence as "a clinical definition referring to two formulations of a drug".

"Drugs are considered bioequivalent if the extents and rates of absorption of drug from them are so similar that there is likely no clinically important difference between their effects."

The EMA states: “Two medicinal products containing the same active substance are considered bioequivalent if they are pharmaceutically equivalent or pharmaceutical alternatives and their bioavailabilities (rate and extent) after administration in the same molar dose lie within acceptable predefined limits. These limits are set to ensure comparable in vivo performance, i.e. similarity in terms of safety and efficacy.

Bioequivalence rests on the assumption that the measured medicine concentration is related to its clinical effect. If the active ingredient from both drug formulations achieves the same concentration at the same rate (or AUC of the concentration over time curve) then likely these two medicines will achieve the same clinical effect, and so they can be considered bioequivalent.

If one is able to agree on what one views as a clinically relevant effect, one may be able to test bioequivalence empirically. Typically one takes the serum concentration as the easily measurable and clinically relevant parameter. The two medicines are then compared in terms of their relative bioavailability. If the AUC ratio of the two medicines is within the range of 0.8-1.25 (applying statistical analysis), the claim can be made that the two formulations are bioequivalent (Rescigno, 1992) and a generic competitor product could obtain a marketing authorisation.

For example a new tablet ‘A’ from company ‘A’ compared to an already marketed tablet ‘B’ from company ‘B’. The bioavailabilities of the two tablets are compared to see if tablet A is bioequivalent to tablet B. The bioequivalence can be calculated using the equation for relative bioavailability.

Determining bioequivalence can also be used within the same company when for instance comparing new formulations of a medicine.