Assessment of Variation in State Regulation of Generic Drug and Interchangeable Biologic Substitutions | Clinical Pharmacy and Pharmacology | JAMA Internal Medicine | JAMA Network
[Skip to Navigation]
Figure 1.  Variation in Generic Substitution Policies
Variation in Generic Substitution Policies

Variation in generic substitution policies for small-molecule generic drugs related to pharmacist duty to substitute, patient notification and consent, and pharmacist liability adopted by 50 states and Washington, DC.

Figure 2.  Heat Map of Generic Substitution Scores
Heat Map of Generic Substitution Scores

Heat map showing range of small-molecule generic drug substitution scores across all 50 states and Washington, DC. Possible range of scores is 0 to 4, with lower scores reflecting regulatory frameworks more favorable to substitution.

Table 1.  Generic Substitution Scoring Scheme for Small-Molecule Drugs
Generic Substitution Scoring Scheme for Small-Molecule Drugs
Table 2.  Variation in Policy Changes for Interchangeable Biologic Substitution Compared With Each State’s Generic Drug Substitution Policies
Variation in Policy Changes for Interchangeable Biologic Substitution Compared With Each State’s Generic Drug Substitution Policies
1.
Papanicolas  I, Woskie  LR, Jha  AK.  Health care spending in the United States and other high-income countries.   JAMA. 2018;319(10):1024-1039. doi:10.1001/jama.2018.1150 PubMedGoogle ScholarCrossref
2.
Kesselheim  AS, Avorn  J, Sarpatwari  A.  The high cost of prescription drugs in the United States: origins and prospects for reform.   JAMA. 2016;316(8):858-871. doi:10.1001/jama.2016.11237 PubMedGoogle ScholarCrossref
3.
Association for Accessible Medicines. The case for competition: 2019 generic drug & biosimilars access & savings in the US report. Accessed June 7, 2020. https://accessiblemeds.org/sites/default/files/2019-09/AAM-2019-Generic-Biosimilars-Access-and-Savings-US-Report-WEB.pdf
4.
Shrank  WH, Hoang  T, Ettner  SL,  et al.  The implications of choice: prescribing generic or preferred pharmaceuticals improves medication adherence for chronic conditions.   Arch Intern Med. 2006;166(3):332-337. doi:10.1001/archinte.166.3.332 PubMedGoogle ScholarCrossref
5.
Gagne  JJ, Choudhry  NK, Kesselheim  AS,  et al.  Comparative effectiveness of generic and brand-name statins on patient outcomes: a cohort study.   Ann Intern Med. 2014;161(6):400-407. doi:10.7326/M13-2942 PubMedGoogle ScholarCrossref
6.
Lo-Ciganic  WH, Donohue  JM, Jones  BL,  et al.  Trajectories of diabetes medication adherence and hospitalization risk: a retrospective cohort study in a large state Medicaid program.   J Gen Intern Med. 2016;31(9):1052-1060. doi:10.1007/s11606-016-3747-6 PubMedGoogle ScholarCrossref
7.
Khunti  K, Seidu  S, Kunutsor  S, Davies  M.  Association between adherence to pharmacotherapy and outcomes in type 2 diabetes: a meta-analysis.   Diabetes Care. 2017;40(11):1588-1596. doi:10.2337/dc16-1925 PubMedGoogle ScholarCrossref
8.
Greene  JA.  Generic: The Unbranding Of Modern Medicine. Johns Hopkins University Press; 2014.
9.
Dave  CV, Hartzema  A, Kesselheim  AS.  Prices of generic drugs associated with numbers of manufacturers.   N Engl J Med. 2017;377(26):2597-2598. doi:10.1056/NEJMc1711899 PubMedGoogle ScholarCrossref
10.
Shrank  WH, Choudhry  NK, Agnew-Blais  J,  et al.  State generic substitution laws can lower drug outlays under Medicaid.   Health Aff (Millwood). 2010;29(7):1383-1390. doi:10.1377/hlthaff.2009.0424 PubMedGoogle ScholarCrossref
11.
Growdon  ME, Sacks  CA, Kesselheim  AS, Avorn  J.  Potential Medicare savings from generic substitution and therapeutic interchange of ACE inhibitors and angiotensin-II-receptor blockers.   JAMA Intern Med. 2019;179(12):1712-1714. doi:10.1001/jamainternmed.2019.3107 PubMedGoogle ScholarCrossref
12.
Sacks  CA, Lee  CC, Kesselheim  AS, Avorn  J.  Medicare spending on brand-name combination medications vs their generic constituents.   JAMA. 2018;320(7):650-656. doi:10.1001/jama.2018.11439 PubMedGoogle ScholarCrossref
13.
Chee  M, Zhang  JX, Ngooi  S, Moriates  C, Shah  N, Arora  VM.  Generic substitution rates of oral contraceptives and associated out-of-pocket cost savings between January 2010 and December 2014.   JAMA Intern Med. 2018;178(4):561-563. doi:10.1001/jamainternmed.2017.7849 PubMedGoogle ScholarCrossref
14.
IQVIA. Medicine use and spending in the US: a review of 2017 and outlook to 2022. Published April 19, 2018. Accessed June 7, 2020. https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022
15.
Sarpatwari  A, Barenie  R, Curfman  G, Darrow  JJ, Kesselheim  AS.  The US biosimilar market: stunted growth and possible reforms.   Clin Pharmacol Ther. 2019;105(1):92-100. doi:10.1002/cpt.1285 PubMedGoogle ScholarCrossref
16.
Regulation of biological products. 42 USC §262(i) (2018).
17.
Gabay  M.  Biosimilar substitution laws.   Hosp Pharm. 2017;52(8):544-545. doi:10.1177/0018578717726995 PubMedGoogle ScholarCrossref
18.
US Food and Drug Administration. FDA-approved biosimilar products. Accessed June 7, 2020. https://www.fda.gov/drugs/biosimilars/biosimilar-product-information
19.
Luo  J, Kesselheim  AS, Sarpatwari  A.  Insulin access and affordability in the USA: anticipating the first interchangeable insulin product.   Lancet Diabetes Endocrinol. 2020;8(5):360-362. doi:10.1016/S2213-8587(20)30105-4 PubMedGoogle ScholarCrossref
20.
US Food and Drug Administration. Considerations in demonstrating interchangeability with a reference product. Updated May 2019. Accessed June 7, 2020. https://www.fda.gov/regulatory-information/search-fda-guidance-documents/considerations-demonstrating-interchangeability-reference-product-guidance-industry
21.
US Food and Drug Administration. Clinical immunogenicity considerations for biosimilar and interchangeable insulin products. Published November 2019. Accessed June 7, 2020. https://www.fda.gov/regulatory-information/search-fda-guidance-documents/clinical-immunogenicity-considerations-biosimilar-and-interchangeable-insulin-products
22.
Reuters  T. WestLaw Edge legal database. Accessed June 7, 2020. https://legal.thomsonreuters.com/en/products/westlaw
23.
Connecticut General Statutes. Substitution of generic drugs and biological products. Definitions. Interchangeable biological products. Prescribing practitioners. Pharmacy signs. Dispensing. Records. Regulations. § 20-619(h).
24.
Cal. Com. Code § 4073.5(b).
25.
Sarpatwari  A, Lee  MP, Gagne  JJ,  et al.  Generic versions of narrow therapeutic index drugs: a national survey of pharmacists’ substitution beliefs and practices.   Clin Pharmacol Ther. 2018;103(6):1093-1099. doi:10.1002/cpt.884 PubMedGoogle ScholarCrossref
26.
González López-Valcárcel  B, Librero  J, García-Sempere  A,  et al.  Effect of cost sharing on adherence to evidence-based medications in patients with acute coronary syndrome.   Heart. 2017;103(14):1082-1088. doi:10.1136/heartjnl-2016-310610 PubMedGoogle ScholarCrossref
27.
Heidari  P, Cross  W, Crawford  K.  Do out-of-pocket costs affect medication adherence in adults with rheumatoid arthritis? a systematic review.   Semin Arthritis Rheum. 2018;48(1):12-21. doi:10.1016/j.semarthrit.2017.12.010 PubMedGoogle ScholarCrossref
28.
Karter  AJ, Parker  MM, Solomon  MD,  et al.  Effect of out-of-pocket cost on medication initiation, adherence, and persistence among patients with type 2 diabetes: the Diabetes Study of Northern California (DISTANCE).   Health Serv Res. 2018;53(2):1227-1247. doi:10.1111/1475-6773.12700 PubMedGoogle ScholarCrossref
29.
Shrank  WH, Liberman  JN, Fischer  MA,  et al.  The consequences of requesting “dispense as written.”   Am J Med. 2011;124(4):309-317. doi:10.1016/j.amjmed.2010.11.020 PubMedGoogle ScholarCrossref
30.
Gagne  JJ, Avorn  J, Shrank  WH, Schneeweiss  S.  Refilling and switching of antiepileptic drugs and seizure-related events.   Clin Pharmacol Ther. 2010;88(3):347-353. doi:10.1038/clpt.2010.90 PubMedGoogle ScholarCrossref
31.
Kesselheim  AS, Bykov  K, Gagne  JJ, Wang  SV, Choudhry  NK.  Switching generic antiepileptic drug manufacturer not linked to seizures: a case-crossover study.   Neurology. 2016;87(17):1796-1801. doi:10.1212/WNL.0000000000003259 PubMedGoogle ScholarCrossref
32.
Sarpatwari  A, Avorn  J, Kesselheim  AS.  Progress and hurdles for follow-on biologics.   N Engl J Med. 2015;372(25):2380-2382. doi:10.1056/NEJMp1504672 PubMedGoogle ScholarCrossref
33.
Whyte  LE, Wieder  B. Amid federal gridlock, lobbying rises in the states. The Center for Public Integrity. Updated May 18, 2016. Accessed June 7, 2020. https://publicintegrity.org/politics/state-politics/amid-federal-gridlock-lobbying-rises-in-the-states/
34.
Hakim  A, Ross  JS.  Obstacles to the adoption of biosimilars for chronic diseases.   JAMA. 2017;317(21):2163-2164. doi:10.1001/jama.2017.5202 PubMedGoogle ScholarCrossref
35.
European Medicines Agency and European Commission. Biosimilars in the EU: information guide for healthcare professionals. Updated February 10, 2019. Accessed June 7, 2020. https://www.ema.europa.eu/en/documents/leaflet/biosimilars-eu-information-guide-healthcare-professionals_en.pdf
36.
Troein  P, Netwon  M, Patel  J, Scott  K. The impact of biosimilar competition in Europe. IQVIA. Published October 2019. Accessed May 19, 2020. https://ec.europa.eu/docsroom/documents/38461/attachments/1/translations/en/renditions/native
37.
US Department of Health and Human Services. American patients first: the Trump Administration blueprint to lower drug prices and reduce out-of-pocket costs. Published May 2018. Accessed June 7, 2020. https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf
38.
Avorn  J, Soumerai  SB.  Improving drug-therapy decisions through educational outreach: a randomized controlled trial of academically based “detailing.”   N Engl J Med. 1983;308(24):1457-1463. doi:10.1056/NEJM198306163082406 PubMedGoogle ScholarCrossref
39.
Avorn  J, Soumerai  SB, Everitt  DE,  et al.  A randomized trial of a program to reduce the use of psychoactive drugs in nursing homes.   N Engl J Med. 1992;327(3):168-173. doi:10.1056/NEJM199207163270306 PubMedGoogle ScholarCrossref
40.
O’Brien  MA, Rogers  S, Jamtvedt  G,  et al.  Educational outreach visits: effects on professional practice and health care outcomes.   Cochrane Database Syst Rev. 2007;(4):CD000409. doi:10.1002/14651858.CD000409.pub2 PubMedGoogle Scholar
Limit 200 characters
Limit 25 characters
Conflicts of Interest Disclosure

Identify all potential conflicts of interest that might be relevant to your comment.

Conflicts of interest comprise financial interests, activities, and relationships within the past 3 years including but not limited to employment, affiliation, grants or funding, consultancies, honoraria or payment, speaker's bureaus, stock ownership or options, expert testimony, royalties, donation of medical equipment, or patents planned, pending, or issued.

Err on the side of full disclosure.

If you have no conflicts of interest, check "No potential conflicts of interest" in the box below. The information will be posted with your response.

Not all submitted comments are published. Please see our commenting policy for details.

Limit 140 characters
Limit 3600 characters or approximately 600 words
    2 Comments for this article
    EXPAND ALL
    Was data compared to NABP? Do any cases demonstrate a need for liability protection?
    Greg Low, RPh, PhD | Mass General Hospital
    My thanks to the authors for exploring the topic.

    The National Association of Boards of Pharmacy (NABP) annually revises and publishes the Survey of Pharmacy Law, which contains much of the same information as the authors compiled. Did the authors compare their Westlaw Edge classifications to the NABP classifications? If the tallies were different, why were there discrepancies? If the tallies were the same, what did this investigation add to what is known?

    The piece discussed liability protection. Is there any case-law to suggest that such protections are necessary? Has a pharmacist or pharmacy ever been
    held liable for a lawful generic substitution? If there aren't any cases, why is such protection important?

    Doesn't a mandate to substitute preclude the need for explicit liability protection, and therefore shouldn't the mandatory substitution states be excluded from the proportion providing liability protection?

    Lastly, having worked in Vermont, that state's law may have been misinterpreted. That section of law instructs pharmacists to receive consent if they change products for subsequent fills. It does not require consent or notification if the pharmacist continues to use the same substituted generic that they used during the initial fill. Vermont law reads:

    "(c) When refilling a prescription, pharmacists shall receive the consent of the prescriber to dispense a drug or biological product different from that originally dispensed"

    Thanks for the discussion.
    CONFLICT OF INTEREST: None Reported
    READ MORE
    The Importance of Liability and Refill Switching
    Ameet Sarpatwari, PhD, J.D. | Brigham and Women's Hospital and Harvard Medical School
    Greg Low raises interesting questions about the importance of pharmacist liability protections in state law. Although the risk of liability from generic substitution is low, some law firms advertise that injured patients could pursue claims against pharmacists for substitution. It is unclear whether the potential for such lawsuits factors into pharmacists’ decision-making (particularly regarding narrow therapeutic index dugs), whether they are aware of their state’s laws concerning liability protection, and, if so, whether this awareness impacts behavior. Such question would be good avenues for further research.

    We agree that notification or consent is not required for refilling a
    prescription with the same product in Vermont. Requirements to obtain notification or consent for switching products during refills may still disproportionally impact biosimilar uptake. As we note in the manuscript: “Because most biologics are intended for long-term use, many patients with the indicated condition will be receiving the original biologic when an interchangeable biosimilar reaches the market. Drug therapy in these patients will need to be switched—or at least be capable of being switched—to achieve the full cost- savings potential of interchangeable biosimilar agents.”

    While the data compiled by NABP are useful, there are some differences with our categorization system. For example, NABP combined patient consent with patient notification and included variables on other issues, such as how to prevent substitution. By contrast, we collected data on liability protections, and created a novel generic substitution score. We believe that the NABP’s efforts and our article could be complementary resources for pharmacists, policymakers, and patients.
    CONFLICT OF INTEREST: None Reported
    READ MORE
    Original Investigation
    August 31, 2020

    Assessment of Variation in State Regulation of Generic Drug and Interchangeable Biologic Substitutions

    Author Affiliations
    • 1Program on Regulation, Therapeutics, and Law, Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, Boston, Massachusetts
    • 2Mongan Institute and Division of General Internal Medicine, Department of Medicine, Massachusetts General Hospital, Boston
    JAMA Intern Med. 2021;181(1):16-22. doi:10.1001/jamainternmed.2020.3588
    Key Points

    Question  How do US state drug product selection laws vary with regard to how pharmacists can substitute prescriptions for brand-name drugs with small-molecule generic drug or interchangeable biologic equivalents?

    Findings  In this cross-sectional study of all 50 states and Washington, DC, substantial variation was noted in generic substitution rules for small-molecule drugs, including whether substitution was mandatory or permissive, whether patient consent and notification were required before and after substitution, and whether pharmacists were protected from liability for substitution. Almost all states imposed heightened requirements for interchangeable biologic substitution.

    Meaning  The findings of this study suggest a need for optimizing state drug product selection laws to improve medication adherence and reduce drug spending.

    Abstract

    Importance  Brand-name drugs, including biologics, have been the primary source of increasing prescription drug spending in the US. Each state has drug product selection laws that regulate whether and how pharmacists can substitute prescriptions for brand-name drugs with more affordable equivalents, either small-molecule generic drugs or interchangeable biologics, but the details of these laws can vary.

    Objective  To examine the variation in state drug product selection laws with regard to factors that may affect which version of a drug is dispensed.

    Design, Setting, and Participants  A cross-sectional analysis was performed, using a legal database, to obtain information on state laws of all states plus Washington, DC, as they existed on September 1, 2019.

    Exposures  Whether substitution was mandatory or permissive, patient consent was needed prior to substitution, patient notification of substitution was required independent of the drug’s packaging, and/or pharmacists were protected from special risk of liability for substitution.

    Main Outcomes and Measures  For small-molecule and biologic drugs, descriptive statistics were generated for the 4 exposure variables. In addition, for small-molecule drugs, a generic substitution score with a maximum of 1 point was assigned for each exposure variable (range, 0-4 points), with higher scores indicating regulatory requirements limiting substitution.

    Results  This cross-sectional analysis of the generic drug substitution regulations in the 50 US states and Washington, DC, found that for small-molecule drugs, 19 states required pharmacists to perform generic substitution; 7 states and Washington, DC, required patient consent; 31 states and Washington, DC, mandated patient notification independent of the drug’s packaging, and 24 states did not explicitly protect pharmacists from greater liability. Nine states and Washington, DC, had a generic substitution score for small-molecule drugs of 3 or higher, and 45 states had more stringent requirements for interchangeable biologic substitution, most commonly mandatory physician notification.

    Conclusions and Relevance  The findings of this study suggest that there is a need for optimizing state drug product selection laws to promote generic and interchangeable biologic substitution, which may help improve medication adherence and reduce drug spending.

    Introduction

    The US spends more per capita on prescription drugs than any other country in the world.1 Brand-name drugs account for most of this spending, making up more than 70% of all prescription drug costs but only about 10% of prescriptions.2 Over the past 3 decades, the main counterweight to high brand-name drug spending has been small-molecule generic drugs, which emerge after the brand-name drug’s market exclusivity period and are designated by the US Food and Drug Administration (FDA) as being bioequivalent. Between 2007 and 2016, generic drugs saved the US health care system $1.7 trillion.3 Availability of low-cost generic drugs may also promote medication adherence among patients4 and lead to improved clinical outcomes.5-7

    State laws are key to ensuring reductions in spending and improvements in adherence from generic drugs. In the US, pharmacy practices are managed at the state level, and each state has a set of drug product selection laws that regulate how pharmacists dispense drugs.8 The operation of drug product selection laws helps to determine the efficiency of the generic drug market. For example, when such laws allow pharmacists to automatically substitute a generic drug for its brand-name version, generic manufacturers are incentivized to earn market share by offering their products at as low a cost as possible and do not have to spend resources on marketing or other efforts to differentiate themselves from other manufacturers. This competition results in drug prices decreasing to close to the cost of production after a sufficient number of interchangeable generic drugs becomes available.9

    However, state drug product selection laws can vary in important respects, such as whether the substitution is mandatory or permissive and whether patient consent is required. An investigation of Medicaid outpatient dispensing of simvastatin (Zocor) between 2006 and 2007 by Shrank et al10 found that states requiring patient consent had 25% lower generic substitution rates. By undermining efficient dispensing of generic drugs, such variation in state drug product selection laws lead to unnecessary use of expensive brand-name versions. The investigators estimated that eliminating the patient consent requirement would have led to more than $100 million in savings for just 3 medications—atorvastatin (Lipitor), clopidogrel (Plavix), and olanzapine (Zyprexa)—in the year following loss of market exclusivity.

    Despite their widespread use, generic medications have remained underused in many clinical contexts, including cardiovascular disease management,11 combination products,12 and oral contraceptive medications.13 In addition, in the past decade, costly biologic drugs have become more common in the drug market. Today, biologics represent only 2% of dispensed medications but nearly 40% of spending.14 Biologic drugs had been excluded from generic-style competition until 2010, when the Biologics Price Competition and Innovation Act created a regulatory process for approving follow-on biologic drugs based on the generic drug approval system.15 Two types of approvals were authorized: biosimilars, which have no clinically meaningful differences in safety, purity, and potency to the originator biologic drug, and interchangeable biologics, which are biosimilar agents that have met additional testing standards demonstrating that they may be safely substituted for the originator biologic without the intervention of the prescribing physician.16 State laws do not allow pharmacist substitution of biosimilar drugs and vary with their approach to interchangeable biologic substitution.17 Although the FDA has yet to designate any biosimilar drugs as interchangeable,18 the first interchangeable biologics may appear soon, with the FDA having begun regulating insulin products as biologics as of March 2020.19 Efficient state drug product selection laws could then be critical to lowering spending on biologic drugs and ensuring optimal use of products, such as interchangeable insulin.20,21 We sought to understand the current landscape of drug product selection laws in the US, including how different states approach interchangeable biologic substitution.

    Methods

    We searched the legal database Westlaw Edge (Thomson Reuters)22 for all statutes and regulations in each state and Washington, DC, related to pharmacist dispensing of prescription medications between March 1 and March 30, 2019. We used the search terms drug, generic, biologic, biosimilar, follow-on biologic, product, selection, and substitution and reviewed neighboring sections of retrieved statutes and regulations using the database's table of contents tool to develop the range of each state's drug product selection laws. We reassessed the currency of these laws in October 2019, capturing any updates as of September 1, 2019.

    Variable Extraction and Data Analysis

    We instituted an iterative process to develop the scheme for data extraction. An investigator (A.S.) first reviewed drug product selection laws in 10 states to identify factors that may affect whether a brand-name or generic/interchangeable biologic version of a drug was dispensed. This review resulted in the identification of the following variables: (1) duty to substitute (whether substitution was mandated or permissive), (2) notification (whether patient notification of the substitution independent of the drug’s packaging was required), (3) consent (whether patient consent for the substitution was required, patient consent was not specifically required but refusal was explicitly allowed, or no such reference was made), and (4) liability (whether reference was made that pharmacists incurred no greater risk of liability for substitution than if the brand-name product were dispensed, specific mention was made of possibly increased liability, or no such reference was made). Two of us (C.A.S. and V.L.W.d.W.) then independently reviewed the laws in 50 states and Washington, DC, and extracted those variables as they applied to generic drugs and interchangeable biologics between April 1, 2019, and November 30, 2019. Disagreements were resolved by consensus.

    Variation in these laws was documented using descriptive statistics. For small-molecule drugs, this included developing a generic substitution score for each state and Washington, DC, with a maximum of 1 point assigned for each variable that indicated a regulatory requirement making generic substitution more restrictive (Table 1). For variables with 2 options, a score of 0 or 1 was assigned. For variables with 3 possibilities, a score of 0, 0.5, or 1 was assigned. A lower total score indicates a state regulatory framework more favorable to generic substitution of small-molecule drugs. Differences between requirements for generic and interchangeable biologic substitution within each state were then examined. Institutional review board approval was not required because the study used only public data on state laws and not human participants.

    Results

    We found substantial variation in drug product selection laws (Figure 1). With regard to small-molecule drugs, less than half of the states (n = 19) mandated generic substitution by pharmacists when generic products were available (noting that pharmacists “shall” substitute). The remaining 31 states and Washington, DC, permitted but did not require substitution (noting that pharmacists “may” substitute); of these jurisdictions, 4 required pharmacies to post notice for patients of the possibility of substitution.

    Seven states and Washington, DC, required that patients consent to substitution, while 23 states noted a right of patients to refuse substitution without requiring that they consent. If substitution was performed, 31 states and Washington, DC, mandated that patients be notified of the action independent of the drug’s packaging.

    Most states and Washington, DC (n = 27) explicitly protected pharmacists from greater liability for substitution. By contrast, 23 states did not, while 1 state (Connecticut) noted the possibility of increased liability (“Neither the failure to instruct by the purchaser...nor the fact that a sign has been posted...shall be a defense on the part of a pharmacist against a suit brought by any such purchaser”).23

    Figure 2 shows the generic substitution score assigned to each state and Washington, DC. Thirteen states (Arizona, Illinois, Kentucky, Massachusetts, New Jersey, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Washington, Wisconsin, and Wyoming) had scores between 0 and 1, reflecting few restrictions for generic substitution of small-molecule drugs. By contrast, 9 states (Alaska, Arkansas, Connecticut, Iowa, Louisiana, South Carolina, Texas, Utah, and Virginia) and Washington, DC, had scores of 3 or higher, indicating greater barriers to generic substitution.

    Ninety percent of the states (n = 45) had more stringent requirements for substitution of interchangeable biologics than for substitution of generic drugs (Table 2). The most common heightened requirement—enacted by 45 states—was a mandate that physicians be notified of substitution. For example, California stipulated that within 5 days of dispensing, the pharmacist must communicate the substitution through “an entry that can be electronically accessed by the prescriber.”24 Nine states (Alabama, Arizona, Illinois, Massachusetts, Missouri, Nebraska, New Mexico, Oregon, and Rhode Island) did not have patient notification requirements for generic substitution but did have them for interchangeable biologic substitution. Six states (Florida, Indiana, Massachusetts, New Jersey, Pennsylvania, and Tennessee) that mandated generic drug substitution made interchangeable biologic substitution permissive.

    Discussion

    Our findings highlight considerable room for optimizing state drug product selection laws to promote generic and interchangeable biologic substitution. Nearly two-thirds of states did not require pharmacists to perform substitution with an FDA-approved generic when physicians prescribe a brand-name small-molecule drug. In addition, 15% of states required patient consent. When interchangeable biosimilar drugs reach the US market, possibly as soon as late 2020, they will encounter important limits on substitution.

    Prior analyses suggest that these state policy choices are important. In a national survey conducted to understand beliefs and practices related to narrow therapeutic index drug substitution, the odds of pharmacists in mandatory substitution states with a patient consent requirement not substituting initial prescriptions were nearly twice (odds ratio, 1.9; 95% CI, 1.1-3.3) those of pharmacists in mandatory substitution states without a patient consent requirement.25 In the Medicaid study by Shrank et al10 of simvastatin, substitution rates in 2006-2007 were nearly 20% higher in states with mandatory vs permissive substitution policies. Our data show that more than one-third of states still require pharmacists to notify patients of substitutions independent of the package labeling, and almost half did not explicitly protect pharmacists from liability for substitution. Research is needed to quantify the effects of these variables on pharmacists’ current practices and patient outcomes.

    Overall, the variation we observed highlights an opportunity not only to reduce health system spending, but also to improve population health. Generic drugs are clinically equivalent to their brand-name counterparts and have been associated with improved medication adherence and health outcomes. For example, a study of 6 classes of medications prescribed for long-term use between 2001 and 2003 reported 13% greater adherence among patients who initiated treatment with a generic rather than a brand-name drug.5 More recently, researchers found a 6% absolute increase in the proportion of days covered (a measure of adherence) and an 8% relative reduction in all-cause mortality and hospitalization for acute coronary syndrome or stroke among initiators of generic instead of brand-name statins.6 Over time, as payers have shifted more drugs onto coinsurance tiering and more costs onto patients through higher deductible plans, the individual burden of higher drug prices has only increased.26-28

    Optimizing state laws to facilitate generic drug substitution as the default option is an important lever to increase medication adherence and reduce excess drug spending. For the rare patients who require a brand-name drug when an interchangeable generic is available, all states allow prescribers to indicate dispense as written on prescriptions, ensuring that a brand-name drug is dispensed.29 In addition, some states have created special substitution rules for some drug classes, such as immunomodulators used in patients who have undergone transplantation or are receiving antiepileptic drugs, based on concerns that some clinicians and patients have about generic interchangeability.24 In the case of antiepileptics, well-controlled observational studies have not shown increased risk of adverse patient outcomes from generic substitution.30,31

    Of special concern are the heightened requirements most states have imposed on interchangeable biosimilar substitution, in particular, the permissive substitution standard. The adoption of these laws reflects in part well-documented efforts of originator biologic manufacturers with state legislators,32 which generally have looser lobbying and transparency standards than the federal government.33 When interchangeable biosimilar agents enter the market, it will be important to assess the extent to which heightened substitution requirements suppress their uptake.

    The requirement for physician authorization for substitution of refills may also have important ramifications. Because most biologics are intended for long-term use, many patients with the indicated condition will be receiving the original biologic when an interchangeable biosimilar reaches the market. Drug therapy in these patients will need to be switched—or at least be capable of being switched—to achieve the full cost-savings potential of interchangeable biosimilar agents.34

    In addition, the requirement in nearly all states that pharmacists notify physicians about interchangeable biologic substitution may pose administrative challenges. For example, the logistics required to implement such a notification and acknowledgment process may vary for different electronic medical record systems and may introduce workflow challenges that pose an additional barrier to widespread use. At a minimum, states may need to be flexible about the mode and timing of this communication.

    The increased complexity of biologic drugs, such as monoclonal antibodies, clotting factors, and hormones, is often presented as the justification for these heightened requirements. However, the experience of other nations that found higher biosimilar uptake compared with the US offers substantial evidence of the safety of biosimilars35 and their ability to yield cost savings.36

    To best facilitate generic and interchangeable biologic use, optimization of state drug product selection laws should be coupled with educational outreach to prescribers and patients. The US Department of Health and Human Services has endorsed such efforts,37 which can help improve public confidence in the safety and efficacy of generic drugs and interchangeable biologics. Academic detailing, which uses an interactive individualized approach to convey to physicians the most current, evidence-based information on optimal care decisions, is one strategy that has been shown in randomized clinical trials to improve prescribing patient outcomes and cost containment.38-40 Among other benefits, well-designed and deployed educational interventions may decrease the likelihood of physicians writing dispense-as-written prescriptions and increase their likelihood of using nonproprietary names in their clinical practice.

    Limitations

    Limitations of our investigation warrant discussion. Although the examined variables were determined after review of literature findings and laws in a subset of states, there may have been relevant points of variation that we did not identify. It is also possible that different pharmacy state boards interpret and enforce similar laws differently. In addition, insurance management tools, such as tiering and prior authorization requirements, play a role in modifying the effect of state drug product selection laws but were not assessed in this investigation.

    Conclusions

    State laws governing pharmacist dispensing practices represent an important policy lever to contain increasing drug costs and improve health outcomes. The substantial variation in these laws provides opportunities to further evaluate and implement policies that promote generic and interchangeable biologic substitution.

    Back to top
    Article Information

    Accepted for Publication: June 19, 2020.

    Published Online: August 31, 2020. doi:10.1001/jamainternmed.2020.3588

    Corrections: This article was corrected on November 30, 2020, to fix misclassification of some US states caused by coding errors in the data file; and on March 1, 2021, to fix name abbreviations of 2 states in Figure 2.

    Corresponding Author: Ameet Sarpatwari, PhD, JD, Program on Regulation, Therapeutics, and Law, Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, 1620 Tremont St, Ste 3030, Boston, MA 02120 (asarpatwari@bwh.harvard.edu).

    Author Contributions: Drs Sacks and Sarpatwari had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

    Concept and design: Sacks, Kesselheim, Sarpatwari.

    Acquisition, analysis, or interpretation of data: Sacks, Van de Wiele, Fulchino, Patel, Sarpatwari.

    Drafting of the manuscript: Sacks, Van de Wiele, Fulchino, Patel, Sarpatwari.

    Critical revision of the manuscript for important intellectual content: Van de Wiele, Kesselheim, Sarpatwari.

    Statistical analysis: Van de Wiele, Sarpatwari.

    Obtained funding: Kesselheim, Sarpatwari.

    Administrative, technical, or material support: Van de Wiele, Patel, Sarpatwari.

    Supervision: Kesselheim, Sarpatwari.

    Conflict of Interest Disclosures: Dr Sacks reported a grant from the Carney Family Foundation during the conduct of the study. Dr Sarpatwari reported a grant from the Anthem Public Policy Institute outside the submitted work. No other disclosures were reported.

    Funding/Support: Funding for the study was provided by the Robert Wood Johnson Foundation, Public Health Law Research Program (72231), Arnold Ventures, and the Harvard-MIT Center for Regulatory Science. The Association for Accessible Medicines provided a grant to Brigham and Women's Hospital that partially supported Mr Van de Wiele's fellowship.

    Role of the Funder/Sponsor: The funding sources had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

    References
    1.
    Papanicolas  I, Woskie  LR, Jha  AK.  Health care spending in the United States and other high-income countries.   JAMA. 2018;319(10):1024-1039. doi:10.1001/jama.2018.1150 PubMedGoogle ScholarCrossref
    2.
    Kesselheim  AS, Avorn  J, Sarpatwari  A.  The high cost of prescription drugs in the United States: origins and prospects for reform.   JAMA. 2016;316(8):858-871. doi:10.1001/jama.2016.11237 PubMedGoogle ScholarCrossref
    3.
    Association for Accessible Medicines. The case for competition: 2019 generic drug & biosimilars access & savings in the US report. Accessed June 7, 2020. https://accessiblemeds.org/sites/default/files/2019-09/AAM-2019-Generic-Biosimilars-Access-and-Savings-US-Report-WEB.pdf
    4.
    Shrank  WH, Hoang  T, Ettner  SL,  et al.  The implications of choice: prescribing generic or preferred pharmaceuticals improves medication adherence for chronic conditions.   Arch Intern Med. 2006;166(3):332-337. doi:10.1001/archinte.166.3.332 PubMedGoogle ScholarCrossref
    5.
    Gagne  JJ, Choudhry  NK, Kesselheim  AS,  et al.  Comparative effectiveness of generic and brand-name statins on patient outcomes: a cohort study.   Ann Intern Med. 2014;161(6):400-407. doi:10.7326/M13-2942 PubMedGoogle ScholarCrossref
    6.
    Lo-Ciganic  WH, Donohue  JM, Jones  BL,  et al.  Trajectories of diabetes medication adherence and hospitalization risk: a retrospective cohort study in a large state Medicaid program.   J Gen Intern Med. 2016;31(9):1052-1060. doi:10.1007/s11606-016-3747-6 PubMedGoogle ScholarCrossref
    7.
    Khunti  K, Seidu  S, Kunutsor  S, Davies  M.  Association between adherence to pharmacotherapy and outcomes in type 2 diabetes: a meta-analysis.   Diabetes Care. 2017;40(11):1588-1596. doi:10.2337/dc16-1925 PubMedGoogle ScholarCrossref
    8.
    Greene  JA.  Generic: The Unbranding Of Modern Medicine. Johns Hopkins University Press; 2014.
    9.
    Dave  CV, Hartzema  A, Kesselheim  AS.  Prices of generic drugs associated with numbers of manufacturers.   N Engl J Med. 2017;377(26):2597-2598. doi:10.1056/NEJMc1711899 PubMedGoogle ScholarCrossref
    10.
    Shrank  WH, Choudhry  NK, Agnew-Blais  J,  et al.  State generic substitution laws can lower drug outlays under Medicaid.   Health Aff (Millwood). 2010;29(7):1383-1390. doi:10.1377/hlthaff.2009.0424 PubMedGoogle ScholarCrossref
    11.
    Growdon  ME, Sacks  CA, Kesselheim  AS, Avorn  J.  Potential Medicare savings from generic substitution and therapeutic interchange of ACE inhibitors and angiotensin-II-receptor blockers.   JAMA Intern Med. 2019;179(12):1712-1714. doi:10.1001/jamainternmed.2019.3107 PubMedGoogle ScholarCrossref
    12.
    Sacks  CA, Lee  CC, Kesselheim  AS, Avorn  J.  Medicare spending on brand-name combination medications vs their generic constituents.   JAMA. 2018;320(7):650-656. doi:10.1001/jama.2018.11439 PubMedGoogle ScholarCrossref
    13.
    Chee  M, Zhang  JX, Ngooi  S, Moriates  C, Shah  N, Arora  VM.  Generic substitution rates of oral contraceptives and associated out-of-pocket cost savings between January 2010 and December 2014.   JAMA Intern Med. 2018;178(4):561-563. doi:10.1001/jamainternmed.2017.7849 PubMedGoogle ScholarCrossref
    14.
    IQVIA. Medicine use and spending in the US: a review of 2017 and outlook to 2022. Published April 19, 2018. Accessed June 7, 2020. https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022
    15.
    Sarpatwari  A, Barenie  R, Curfman  G, Darrow  JJ, Kesselheim  AS.  The US biosimilar market: stunted growth and possible reforms.   Clin Pharmacol Ther. 2019;105(1):92-100. doi:10.1002/cpt.1285 PubMedGoogle ScholarCrossref
    16.
    Regulation of biological products. 42 USC §262(i) (2018).
    17.
    Gabay  M.  Biosimilar substitution laws.   Hosp Pharm. 2017;52(8):544-545. doi:10.1177/0018578717726995 PubMedGoogle ScholarCrossref
    18.
    US Food and Drug Administration. FDA-approved biosimilar products. Accessed June 7, 2020. https://www.fda.gov/drugs/biosimilars/biosimilar-product-information
    19.
    Luo  J, Kesselheim  AS, Sarpatwari  A.  Insulin access and affordability in the USA: anticipating the first interchangeable insulin product.   Lancet Diabetes Endocrinol. 2020;8(5):360-362. doi:10.1016/S2213-8587(20)30105-4 PubMedGoogle ScholarCrossref
    20.
    US Food and Drug Administration. Considerations in demonstrating interchangeability with a reference product. Updated May 2019. Accessed June 7, 2020. https://www.fda.gov/regulatory-information/search-fda-guidance-documents/considerations-demonstrating-interchangeability-reference-product-guidance-industry
    21.
    US Food and Drug Administration. Clinical immunogenicity considerations for biosimilar and interchangeable insulin products. Published November 2019. Accessed June 7, 2020. https://www.fda.gov/regulatory-information/search-fda-guidance-documents/clinical-immunogenicity-considerations-biosimilar-and-interchangeable-insulin-products
    22.
    Reuters  T. WestLaw Edge legal database. Accessed June 7, 2020. https://legal.thomsonreuters.com/en/products/westlaw
    23.
    Connecticut General Statutes. Substitution of generic drugs and biological products. Definitions. Interchangeable biological products. Prescribing practitioners. Pharmacy signs. Dispensing. Records. Regulations. § 20-619(h).
    24.
    Cal. Com. Code § 4073.5(b).
    25.
    Sarpatwari  A, Lee  MP, Gagne  JJ,  et al.  Generic versions of narrow therapeutic index drugs: a national survey of pharmacists’ substitution beliefs and practices.   Clin Pharmacol Ther. 2018;103(6):1093-1099. doi:10.1002/cpt.884 PubMedGoogle ScholarCrossref
    26.
    González López-Valcárcel  B, Librero  J, García-Sempere  A,  et al.  Effect of cost sharing on adherence to evidence-based medications in patients with acute coronary syndrome.   Heart. 2017;103(14):1082-1088. doi:10.1136/heartjnl-2016-310610 PubMedGoogle ScholarCrossref
    27.
    Heidari  P, Cross  W, Crawford  K.  Do out-of-pocket costs affect medication adherence in adults with rheumatoid arthritis? a systematic review.   Semin Arthritis Rheum. 2018;48(1):12-21. doi:10.1016/j.semarthrit.2017.12.010 PubMedGoogle ScholarCrossref
    28.
    Karter  AJ, Parker  MM, Solomon  MD,  et al.  Effect of out-of-pocket cost on medication initiation, adherence, and persistence among patients with type 2 diabetes: the Diabetes Study of Northern California (DISTANCE).   Health Serv Res. 2018;53(2):1227-1247. doi:10.1111/1475-6773.12700 PubMedGoogle ScholarCrossref
    29.
    Shrank  WH, Liberman  JN, Fischer  MA,  et al.  The consequences of requesting “dispense as written.”   Am J Med. 2011;124(4):309-317. doi:10.1016/j.amjmed.2010.11.020 PubMedGoogle ScholarCrossref
    30.
    Gagne  JJ, Avorn  J, Shrank  WH, Schneeweiss  S.  Refilling and switching of antiepileptic drugs and seizure-related events.   Clin Pharmacol Ther. 2010;88(3):347-353. doi:10.1038/clpt.2010.90 PubMedGoogle ScholarCrossref
    31.
    Kesselheim  AS, Bykov  K, Gagne  JJ, Wang  SV, Choudhry  NK.  Switching generic antiepileptic drug manufacturer not linked to seizures: a case-crossover study.   Neurology. 2016;87(17):1796-1801. doi:10.1212/WNL.0000000000003259 PubMedGoogle ScholarCrossref
    32.
    Sarpatwari  A, Avorn  J, Kesselheim  AS.  Progress and hurdles for follow-on biologics.   N Engl J Med. 2015;372(25):2380-2382. doi:10.1056/NEJMp1504672 PubMedGoogle ScholarCrossref
    33.
    Whyte  LE, Wieder  B. Amid federal gridlock, lobbying rises in the states. The Center for Public Integrity. Updated May 18, 2016. Accessed June 7, 2020. https://publicintegrity.org/politics/state-politics/amid-federal-gridlock-lobbying-rises-in-the-states/
    34.
    Hakim  A, Ross  JS.  Obstacles to the adoption of biosimilars for chronic diseases.   JAMA. 2017;317(21):2163-2164. doi:10.1001/jama.2017.5202 PubMedGoogle ScholarCrossref
    35.
    European Medicines Agency and European Commission. Biosimilars in the EU: information guide for healthcare professionals. Updated February 10, 2019. Accessed June 7, 2020. https://www.ema.europa.eu/en/documents/leaflet/biosimilars-eu-information-guide-healthcare-professionals_en.pdf
    36.
    Troein  P, Netwon  M, Patel  J, Scott  K. The impact of biosimilar competition in Europe. IQVIA. Published October 2019. Accessed May 19, 2020. https://ec.europa.eu/docsroom/documents/38461/attachments/1/translations/en/renditions/native
    37.
    US Department of Health and Human Services. American patients first: the Trump Administration blueprint to lower drug prices and reduce out-of-pocket costs. Published May 2018. Accessed June 7, 2020. https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf
    38.
    Avorn  J, Soumerai  SB.  Improving drug-therapy decisions through educational outreach: a randomized controlled trial of academically based “detailing.”   N Engl J Med. 1983;308(24):1457-1463. doi:10.1056/NEJM198306163082406 PubMedGoogle ScholarCrossref
    39.
    Avorn  J, Soumerai  SB, Everitt  DE,  et al.  A randomized trial of a program to reduce the use of psychoactive drugs in nursing homes.   N Engl J Med. 1992;327(3):168-173. doi:10.1056/NEJM199207163270306 PubMedGoogle ScholarCrossref
    40.
    O’Brien  MA, Rogers  S, Jamtvedt  G,  et al.  Educational outreach visits: effects on professional practice and health care outcomes.   Cochrane Database Syst Rev. 2007;(4):CD000409. doi:10.1002/14651858.CD000409.pub2 PubMedGoogle Scholar
    ×