‘Generic Substitution’ in New Jersey, 1979–87

Abstract

A total of 76,385 prescription orders from 543 randomly selected New Jersey community pharmacies were reviewed from 1979 to 1987 to ascertain the overall extent of drug product selection, or generic substitution. Also assessed were factors affecting generic substitution such as extent of ordering generically, prescribers' and patients' disapproval of generic substitution, the limitations of a formulary, and pharmacists' compliance with the generic substitution law. Over the study period generic substitution more than doubled, from an average of 6.6% to an average of 14.2% of all new prescription orders. Prescribers disallowed generics on 32% of all eligible prescription orders in 1979 and on 42% in 1987. Patients disallowed generics on 3.7% of all eligible prescription orders in 1979 and on 5.7% in 1987. Pharmacists' compliance with state law mandating generic substitution rose from 47% in 1979 to 74% in 1987. A companion analysis of 4.64 million prescription payment records (2 million of which were for generics) from two state prescription reimbursement programs demonstrated an average savings of $5.73 and $8.74 per generic prescription order when compared to their branded counterparts. Prescribers and pharmacists were found to be the major impediments to more extensive generic substitution.