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Avalere Health Conducts State-by-State Assessment of Generic Substitution Laws

Contact: Lindsey Spindle, 202.207.1337, lspindle@avalerehealth.net

09.14.05

Washington, DC — A new state-by-state assessment of generic substitution laws conducted by Avalere Health found that 94% of states (47 out of 50) currently permit or require pharmacists to offer generic equivalents to patients who present prescriptions for brand-name drugs.  The Avalere analysis also showed that a growing number of state Medicaid programs are pursuing more aggressive approaches to generic substitution by providing financial incentives to pharmacists for using generics.

Viewed against the current debate of how to reduce overall healthcare costs, and more specifically Medicaid spending, this state-by-state comparison of state laws provides insights into current cost-reduction strategies used by states. 
Avalere's analysis uncovered some consistent trends across states. Among their findings:

• Most states require that patients give consent or be informed of generic substitution
• Many states regulate which drugs may or may not be substituted with generics
• A growing number of state Medicaid programs have been expanding their use of generic substitution requirements in recent years

In addition to actions by states to promote generic substitution, many commercial health plans and pharmacy benefit managers have achieved dramatic increases in the rate at which they are able to shift utilization from brand-name drugs to generics.  Federal regulations implementing the new Medicare prescription drug benefit also require pharmacists to notify patients if a generic substitute is available, and any efforts by these health plans to further promote generics use in Medicare Part D will undoubtedly be reinforced by most state legislative and regulatory environments.

For more information contact Suzanne Duda at sduda@avalerehealth.net.

Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 125 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

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