'Generic substitution' in New Jersey, 1979-87

Area of Science:

• Health Policy
• Pharmacy Practice
• Pharmacoeconomics

Background:

• Generic substitution, or drug product selection, offers potential cost savings for prescription medications.
• Understanding factors influencing generic substitution rates is crucial for healthcare policy and practice.
• Previous studies have explored prescriber, patient, and pharmacist roles in generic prescribing and dispensing.

Purpose of the Study:

• To assess the extent of generic substitution in New Jersey community pharmacies from 1979 to 1987.
• To identify factors influencing generic substitution, including prescriber/patient disapproval and formulary limitations.
• To evaluate pharmacists' compliance with generic substitution laws and associated cost savings.

Main Methods:

• Review of 76,385 prescription orders from 543 New Jersey community pharmacies (1979-1987).
• Analysis of factors affecting generic substitution: generic ordering, disapproval rates (prescriber/patient), formulary impact, and pharmacist compliance.
• Examination of 4.64 million prescription payment records to determine cost savings of generic vs. branded drugs.

Main Results:

• Generic substitution more than doubled, from 6.6% in 1979 to 14.2% in 1987.
• Prescriber disallowance increased from 32% to 42%; patient disallowance rose from 3.7% to 5.7% over the study period.
• Pharmacist compliance with generic substitution laws improved from 47% to 74%.
• Average savings per generic prescription ranged from $5.73 to $8.74 compared to branded counterparts.
• Prescribers and pharmacists were identified as the primary obstacles to greater generic substitution.

Conclusions:

• While generic substitution increased, significant potential for cost savings remains unrealized.
• Prescriber and pharmacist behaviors are critical determinants of generic substitution rates.
• Policy interventions targeting prescriber and pharmacist practices may enhance generic drug utilization and reduce healthcare costs.