ISMA e-Reports, November 20, 2006

Know the law: Generics may be substituted without your permission/knowledge

Under Indiana law, each prescription must have two signature lines:

  1. “Dispense as written” and
  2. “May substitute”

One of those lines must be signed to be valid. However, even if you state that the prescription must be dispensed as written, it may still be substituted with a generic.

As a general rule, prescriptions may be substituted for generic only if the physician signs on the “May substitute” line. But Indiana law states that if a prescription is being filled under the Medicaid program, Children’s Health Insurance Program (CHIP) or Medicare, the pharmacist must substitute a generic drug if the substitution would result in a lower price. The pharmacist must notify the customer — but not the physician — of the substitution.

If a physician does not want a prescription for a Medicaid, CHIP or Medicare patient to be substituted with a generic, the physician must write “Brand Medically Necessary” on the form (or electronically transmit the words on an e-prescription).

The physician may communicate this information orally to the pharmacist, as long as the physician also subsequently forwards to the pharmacist a similar written instruction.

Although this law has been in effect for well over a decade, more physicians may be noticing their patients’ prescriptions are being substituted as a result of the new Medicare Part D program.

If you have additional questions about this law, or would like to receive a copy of it, please contact the ISMA Legal Department.