SB 537
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 537 (Senator Hershey)
Education, Health, and Environmental Affairs Health and Government Operations
Pharmacists - Required Notification and Authorized Substitution - Lower-Cost
Drug or Device Product
This bill permits a pharmacist to substitute a therapeutically equivalent brand-name drug
or device product for any originally prescribed generically equivalent drug or device
product if (1) the prescriber does not expressly state that the prescription must be dispensed
only as directed; (2) the substitution is recognized, as specified; and (3) the consumer is
charged less for the substitution than the originally prescribed drug or device. If a
substitution is made, a pharmacist must take specified actions. A pharmacist must inform
a retail consumer of the availability of a therapeutically equivalent brand name drug that is
the lowest cost alternative to the originally prescribed generically equivalent drug and the
approximate cost difference as compared to the originally prescribed drug.
Fiscal Summary
State Effect: The bill’s changes can be handled with existing budgeted resources.
Revenues are not affected.
Local Effect: None.
Small Business Effect: Minimal.
Analysis
Bill Summary: Determination of whether the consumer would be charged less for the
substitution must be based on the consumer’s prescription drug benefit and formulary, if
applicable, and if that information is readily available.
If a substitution is made, a pharmacist must (1) notify the patient in writing, or maintain a
record that indicates the patient has been notified in writing or orally, that the substitution
is a generic equivalent of, a brand-name drug or device product that is therapeutically
equivalent to, or is interchangeable with the originally prescribed drug or device product
and (2) record on the prescription and keep a record of specified information.
A pharmacist who substitutes a drug or device product or an interchangeable biological
product in compliance with law incurs no greater liability in filling the prescription by
dispensing the equivalent drug or device product or interchangeable biological product than
would be incurred in filling the prescription by dispensing the originally prescribed drug
or device.
Current Law: A pharmacist (or the pharmacist’s designee) must inform a retail consumer
to the best of the pharmacist’s or designee’s knowledge of the availability of a generically
equivalent drug or an interchangeable biological product and must inform a retail consumer
of the approximate cost difference as compared to the brand name drug. The State Board
of Pharmacy must adopt procedures for a consumer to notify the board when a pharmacist
fails to provide this required information and advising a pharmacist to bring the pharmacist
into compliance with that requirement. However, the requirement does not apply (1) to a
prescription written for a generic drug or an interchangeable biological product; (2) when
the authorized prescriber states expressly that the prescription is to be dispensed only as
directed; (3) to a pharmacist who works in a pharmacy that primarily serves institutional
recipients; or (4) when the cost of the prescription is reimbursed by a third-party payer,
including Medicaid.
A pharmacist may substitute a generically equivalent drug or device product or an
interchangeable biological product, of the same dosage form and strength, for any brand
name drug or device product prescribed if (1) the prescriber does not state expressly that
the prescription is to be dispensed only as directed; (2) the substitution is recognized in the
U.S. Food and Drug Administration’s (FDA) current list of approved drug or device
products with therapeutic equivalence evaluation or is an interchangeable biological
product for the brand name drug; and (3) the consumer is charged less for the substituted
drug or device or interchangeable biological product than the price of the brand name drug
or device.
If a drug or device product or an interchangeable biological product is substituted, a
pharmacist must (1) notify the patient in writing that the drug or device product or
interchangeable biological product dispensed is a generic equivalent of or is
interchangeable with the prescribed drug or device product and (2) record on the
prescription and keep a record of the name and manufacturer of the substituted drug or
device product or interchangeable biological product.
SB 537/ Page 2
The Maryland Department of Health (MDH) may list any additional drug or device
products that are determined by the department to meet requirements that are adequate to
assure product quality and therapeutic equivalence, after an opportunity for public
comment. MDH may disqualify a drug or device product or an interchangeable biological
product on FDA’s current list from being used in Maryland as a substitute if MDH
determines that the drug, device, or interchangeable biological product is therapeutically
nonequivalent or not interchangeable or has a negative physical or biological effect on the
consumer of that drug or device product or interchangeable biological product. However,
when it does so, the department has to provide specified opportunity for public comment.
A pharmacist who substitutes a drug or device product or an interchangeable biological
product in compliance with law incurs no greater liability in filling the prescription by
dispensing the equivalent drug or device product or interchangeable biological product than
would be incurred in filling the prescription by dispensing the prescribed brand name drug
or device.
Additional Information
Prior Introductions: A similar bill, HB 1119 of 2020, as amended, passed in the House
but received no further action from the Senate Education, Health, and Environmental
Affairs Committee.
Designated Cross File: HB 429 (Delegate Shetty) - Health and Government Operations.
Information Source(s): Maryland Department of Health; Department of Legislative
Services
Fiscal Note History: First Reader - February 2, 2021
rh/ljm Third Reader - March 19, 2021
Revised - Amendment(s) - March 19, 2021
Revised - Updated Information - March 19, 2021
Analysis by: Jennifer B. Chasse Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 537/ Page 3


Statutes affected:
Text - First - Pharmacists - Required Notification and Authorized Substitution - Lower-Cost Drug or Device Product: 12-504 Health Occupations
Text - Third - Pharmacists - Required Notification and Authorized Substitution - Lower-Cost Drug or Device Product: 12-504 []