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F I S C A L I M P A C T R E P O R T

SPONSOR Heaton

ORIGINAL DATE

LAST UPDATED

1/20/2006

2/7/2006 HB 34/aHCPAC

SHORT TITLE Interchange of Therapeutic Alternate Drugs

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

www.fda.gov/cder/drugsatfda/glossary.htm

https://physician.express-scripts.com/esi_md/info/faq/1,11259,,00.html

SUMMARY

Synopsis of HCPAC Amendment

The House Consumer and Public Affairs Committee amendment does the following:

A. Upon receipt of a prescription written by a practitioner who may prescribe drugs, a pharmacist may

therapeutic interchange of a prescription drug with a therapeutically alternate drug in order to comply

with a preferred drug list or formulary, in accordance with prior authorization granted by the prescribing

practitioner (page 1, line 23) and after consultation with the patient or the patient's representative. The

pharmacist must notify the prescribing practitioner of the therapeutically alternate drug that was dis-

pensed" (page 1, line 24).

"C. The therapeutic interchange of a prescription drug pursuant to Subsection A of this section shall not

be construed in any way to constitute permitted product selection for the purposes of Subsection B of Sec-

tion 27-2-16 NMSA 1978 unless drug product selection is otherwise permitted by that subsection upon

such therapeutic exchange."". (page 2, line 17).

House Bill 34/aHCPAC – Page

2

Synopsis of Original Bill

House Bill 34 enacts a new section to the Drug Product Selection Act that allows pharmacies to

dispense “therapeutic alternative drugs” upon prior authorization from the prescribing practitio-

ner.

SIGNIFICANT ISSUES

Therapeutic alternative programs are typically based upon lists from pharmacies, states, or

other agencies. For example, Express Scripts indicates that:

Alternative, or therapeutic alternative, drugs are drugs that can be

substituted for other drugs. Many times, therapeutic alternatives are

selected because they are equally effective as the originally prescribed

drug, but they cost less or are the preferred drug on the prescription

benefits formulary.

For example, "antihistamines" is an example of a drug class.

Numerous drugs such as Claritin, Allegra, Zyrtec, and Clarinex are

contained in the antihistamine drug class. These antihistamines are

generally thought to be equally effective for treating allergies. So,

if Claritin is originally prescribed to treat a patient’s allergies but

it is not covered by the prescription drug formulary, an equally

effective therapeutic alternative such as Allegra, Zyrtec, or

Clarinex may be chosen to substitute for Claritin.

The federal FDA defines therapeutic equivalence as follows:

Drug products classified as therapeutically equivalent can be substituted with

the full expectation that the substituted product will produce the same clinical

effect and safety profile as the prescribed product. Drug products are

considered to be therapeutically equivalent only if they meet these criteria:

• they are pharmaceutical equivalents (contain the same

active ingredient(s); dosage form and route of

administration; and strength.)

• they are assigned by FDA the same therapeutic equivalence codes . . .

The coding system for therapeutic equivalence evaluations allows users

to determine whether FDA has evaluated a particular approved product as

therapeutically equivalent to other pharmaceutically equivalent products

and to provide additional information on the basis of FDA’s evaluations.

OTHER SUBSTANTIVE ISSUES

House Bill 34 uses the term “therapeutic alternate” and “therapeutic interchange.” Generally,

Therapeutic Interchange Programs are programs that allow pharmacists to automatically substi-

tute a drug that is preferred on a preferred drug list for a nonpreferred drug when a prescription is

House Bill 34/aHCPAC – Page

3

filled. Drug interchange programs are often created to save money on drug costs while still pro-

viding safe, effective, and less costly drugs.

TECHNICAL ISSUE

The bill contains no effective date. If passed by the Legislature, the provisions become effective

90 days after it is signed by the governor.

POSSIBLE QUESTIONS

House Bill 34 leaves the determination of “therapeutically alternative drug” up to the prescribing

practitioner and the pharmacist, or perhaps, the drug benefit providers.

Would consumers prefer therapeutic equivalents defined by the FDA or therapeutic alternatives

as determined by health care providers.

BMC/yr:nt