Prescription Prices Under the New York Generic Substitution Law

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Abstract
We evaluated the New York State generic substitution law. This law mandates substitution of a less expensive product if the physician signs the prescription for an eligible brand name drug on the line marked "subsitution permissible." We purchased drugs by brand name and generically before the law went into effect. Later, we purchased the same drugs in the same stores using the formats "brand-dispense-as-written," "brand-substitution-permissible," and "generic." Mean savings from generic prescribing or substitution increased from 12.1% +/- 20.4% before the law to 26.2% +/- 10.5% (brand-substitution-permissible) and 27.2% +/- 14.2% (generic). Prices for the same drug written the same way varied enormously among pharmacies. Brand-dispense-as-written, brand-subsitution-permissible, and generic prices in the same store varied substantially and unpredictably. Savings were not passed on to consumers in 29% of postlaw comparisons. Assuring maximal savings requires extensive comparison shopping.

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