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Some states allow pharmacists to substitute generic drugs for name brand prescriptions. To my knowledge they don't need the doctor's permission, and can make the change on their own unless the doctor specifically requests the name brand medicine for some reason.

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Yes, those are "Dispense as Written" (DAW) Laws.

http://beta.aan.com/globals/axon/assets/4698.pdf

In most states, just using the trademark name instead of the generic is not sufficient (which makes sense, since the generic names are usually quite wordy and hard to remember) the doctor needs to specifically write "DAW" if a generic cannot be used.

This begs the question, under what circumstance would it be reasonable for a doctor to insist on "Dispense as Written"?

Generics are not guaranteed to be identical, especially in the inactive ingredients. It is rare but not unheard of for someone to have a reaction only to one form of a drug.

Edit: I have a friend who has such an allergy, which was confirmed with double blind testing.

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