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What is a multi-source drug?



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Question: What is a multi-source drug?
Category: Understanding Your Formulary

Answer:
Multi-source drug is a term used by the Centers for Medicare and Medicaid Services (CMS or Medicare) distinguish between:
  • Generic / Preferred Multi-Source Drug and
  • Other Drugs
when discussing Medicare Part D cost-sharing for:
  • the Catastrophic Coverage phase for all Medicare Part D beneficiaries and
  • the Initial Coverage phase for "Extra Help" (or Low-Income Subsidy LIS) recipients.
 
A Medicare Part D multi-source drug is defined by CMS as:
"A drug defined in section 1927(k)(7)(A)(i) of the Social Security Act."

1927(k)(7)(A)(i) of the Social Security Act (https://www.ssa.gov/OP_Home/ssact/title19/1927.htm):

(B) Multiple source drugs.—

(i) Identification of most frequently physician administered multiple source drugs.—Not later than January 1, 2007, the Secretary shall publish a list of the 20 physician administered multiple source drugs that the Secretary determines have the highest dollar volume of physician administered drugs dispensed under this title. The Secretary may modify such list from year to year to reflect changes in such volume.

(ii) Requirement.—In order for payment to be available under section 1903(a) for a covered outpatient drug that is a multiple source drug that is physician administered (as determined by the Secretary), that is on the list published under clause (i), and that is administered on or after January 1, 2008, the State shall provide for the submission of such utilization data and coding (such as J-codes and National Drug Code numbers) for each such drug as the Secretary may specify as necessary to identify the manufacturer of the drug in order to secure rebates under this section.

Generally speaking: a multi-source drug is a drug that is available from a brand-name drug manufacturer and also from other generic manufacturers.

To see where the term multi-source drug is used in regard to the Medicare Part D program, you can click here for a comparison of Medicare Part D plan parameters for all years since 2006 and scroll down to the cost-sharing sections of the chart.




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