The Ohio General Assembly recently introduced legislation in the Senate that, if passed, would prohibit generic substitution of anticonvulsant drugs for the treatment of epilepsy without the prior consent of the physician and patient. Sub. Senate Bill 114 seeks to make an “end run” around ERISA, the Employee Retirement Income Security Act of 1974.

While ERISA is a comprehensive federal law intended to primarily regulate retirement and pension plans and displace all state regulations relating to pension plans, ERISA also has the effect of regulating all other employee benefits, including health benefits. Thus, for self-insured employers, ERISA preempts state laws such as benefit mandates, unless the state law falls into one of three exceptions. Although Sub. SB 114 does not fall into one of these exceptions, the state law, if passed, would have the effect of applying to self-insured employers in Ohio because it is a bill that affects the practice of pharmacy, which is regulated by the state vis-à-vis the Board of Pharmacy.

Today, many of the drugs used to treat epilepsy and therefore prevent seizures are brand medications with patents set to expire as early as the third quarter of 2008. As a result, many state legislatures, under pressure from advocacy groups like the Epilepsy Foundation, have crafted state laws to act as barriers to generic substitution.  Employers who provide medical and pharmacy benefits could be materially impacted if this bill and other “me too” bills are enacted to protect brand manufacturers.  

The cost of generic prescription drugs after a six month exclusivity period, post patent, can be a much as 60 to 80 percent cheaper than brand medications. Many employers have adopted benefit plan designed to mandate the use of generic medications once the brand patent expires. However, Sub. SB 114 would clearly erect barriers to employers’ wishes. These types of legislative initiatives, if successful, may lead to other special interest groups seeking protection. If you are an Ohio employer, write or call your Senator and ask that he or she not support this bill as it will lead to higher pharmacy costs.