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

SPONSOR

Bratton

ORIGINAL DATE

LAST UPDATED

2/2/07

HB

566

SHORT TITLE

Generic Drug Prescription Authorization

SB

ANALYST

C.Sanchez

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total None

$20.0

$20.0

$40.0 Recurring Pharmacy

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Medical Board

Regulation and Licensing Department (RLD)

SUMMARY

Synopsis of Bill

House Bill 566 proposes to amend the Drug Product Selection Act to add language requiring that

a pharmacist personally receive authorization from a patient’s treating physician prior to

substituting a lower-cost generic or therapeutically equivalent medication

FISCAL IMPLICATIONS

The Pharmacy Board would receive complaints based on substitutions where the pharmacist did

not personally receive authorization from the attending physician. The Regulation and Licensing

Department estimate at least 20 new investigations each year with each investigation costing

approximately $1,000 to complete and prosecute.

SIGNIFICANT ISSUES

HB 566 would enhance protections for patient health and safety by requiring that a patient’s

treating physician personally authorize any medication substitutions. There are a variety of

economic factors that come into play around prescription medications, including the formularies

established by insurance providers and patients’ ability to afford higher cost drugs. Physicians

House Bill 566 – Page

2

are well aware of these economic issues, and make every effort to prescribe medication that is on

the patient’s insurance formulary or is affordable out-of-pocket. Clearly, there is little medical

value in prescribing a specific drug that the patient will be unable to access. However, only

treating physicians can make the final judgment about which medication is most appropriate for

their patient – only the treating physician knows the full details of the patient’s medical history

and current condition(s), and it is the treating physician who will be held accountable for the

success or failure of the prescribed treatment.

ADMINISTRATIVE IMPLICATIONS

The Pharmacy Board would see an increase in investigations

TECHNICAL ISSUES

Physician is no longer a term used in the Drug Device and Cosmetic Act. The correct term is

“licensed practitioners" which includes any practitioner authorized under New Mexico laws to

prescribe dangerous drugs (prescription drugs).

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Status Quo

POSSIBLE QUESTIONS

Would most Pharmacists comply with this law.

CS/mt