Bill Text - SB140 (2013)

Requiring a pharmacy to substitute generically equivalent drugs for any prescription paid for by state funds.


Revision: March 7, 2013, midnight

SB 140-FN – AS AMENDED BY THE SENATE

03/07/13 0521s

2013 SESSION

13-0921

01/05

SENATE BILL 140-FN

AN ACT requiring a pharmacy to substitute generically equivalent drugs for any prescription paid for by state funds.

SPONSORS: Sen. Woodburn, Dist 1

COMMITTEE: Commerce

AMENDED ANALYSIS

This bill requires a pharmacy to substitute generically equivalent drugs for any prescription paid for by state funds unless the legend drug is less expensive.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/07/13 0521s

13-0921

01/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Thirteen

AN ACT requiring a pharmacy to substitute generically equivalent drugs for any prescription paid for by state funds.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Pharmacies; Generic Drugs Paid for by the State. Amend RSA 318:47-d to read as follows:

318:47-d Pharmacies; Substituting Generic Drugs. Pharmacies, including mail-order pharmacies, may substitute generically equivalent drug products for all legend and non-legend prescriptions unless the prescribing practitioner handwrites “medically necessary” on each paper prescription, or uses electronic indications when transmitted electronically, or gives instructions when transmitted orally that the brand name drug product is medically necessary. Notwithstanding any provision of law to the contrary, pharmacies, including mail order pharmacies, shall substitute generically equivalent drugs for all legend and non-legend prescriptions when all or part of the payment for such prescription is state funds, unless the prescribing practitioner handwrites “medically necessary” on each paper prescription, or uses electronic indications when transmitted electronically, or gives instructions when transmitted orally that the brand named drug is medically necessary; provided that in cases where the legend drug is less expensive, the legend drug shall be used. Prescription refills shall not require the reissuance of the “medically necessary” indication.

2 Effective Date. This act shall take effect 60 days after its passage.

LBAO

13-0921

Revised 02/13/13

SB 140 FISCAL NOTE

AN ACT requiring a pharmacy to substitute generically equivalent drugs for any prescription paid for by state funds.

FISCAL IMPACT:

      The Departments of Health and Human Services, Administrative Services, and Corrections state this bill, as introduced, will have an indeterminable fiscal impact on state expenditures and revenue in FY 2014 and in each year thereafter. There will be no fiscal impact on county or local expenditures or revenue.

METHODOLOGY:

    The Department of Health and Human Services states the New Hampshire Medicaid program utilizes a contract with a third party pharmacy benefits manager (PBM). The Department indicates the contract requires the PBM to maximize generic substitutions when it is advantageous to do so and where it is tolerated by the patient. The Department provides the following information concerning Medicaid prescription drugs:

      • FY 2013 year to date generic drug utilization is 77% calculated by dividing the number of generic drug claims by total drug claims.

      • The Medicaid program benefits from drug rebates from the industry which are processed by the Centers for Medicare and Medicaid Services. In some instances the cost of the brand drug after rebates is less than its generic equivalent.

      • One-half Medicaid pharmacy expenditures are reimbursed with federal revenue.

      • This bill would not permit the Medicaid program to utilize brand drugs when it is more cost effective to do so.

      The Department is not able to estimate the potential reduction in rebate revenue or the overall impact on the Medicaid pharmacy costs. In addition, the Department states these assumptions are based on experience in the fee-for service program and the Medicaid program will be moving to a managed care model in the near future. The Department is not able to determine how this bill would impact managed care capitation rates or the program and plan design for managed care participants.

    The Department of Administrative Services states the pharmacy benefit plan design for the state funded state employee and retiree health benefit programs mandates substitution of generic medications for the majority of brand-name medications unless the physician orders the prescription to be “dispensed as written”. The Department states the plans also include a traditional generic step therapy program requiring enrollees to try a generic alternative before the brand drug. Exceptions to this requirement would include an unsuccessful attempt to utilize the generic alternative or attainment of a prior authorization validating a brand medication is medically necessary. The Department expects the impact would be small but it is not able to determine the fiscal impact.

    The Department of Corrections is not able to determine how many individuals would be impacted by this bill and therefore cannot determine the impact on state expenditures.

    The New Hampshire Veterans Home states this bill will have no fiscal impact on the Home’s budget since it currently follows the procedure described in the bill. The Home indicates it utilizes a federal supply schedule which requires written directions from the Medical Director if generic drugs are not used.