MDRP Drug Category

Key facts

Program

Medicaid Drug Rebate Program (MDRP)

Categories

S single source, I innovator multiple source, N non-innovator multiple source

S and I basic rebate

23.1% of AMP, or AMP minus best price if greater

N basic rebate

13% of AMP

Inflation rebate

Added for all three categories when prices rise faster than inflation

What is the MDRP drug category?

Manufacturers in the Medicaid Drug Rebate Program report every covered outpatient drug to CMS and classify it into one of three categories. The category reflects how the drug was approved and whether other versions exist.

• S, single source: an innovator drug, typically approved under an NDA or BLA, with no generic equivalent on the market.
• I, innovator multiple source: an innovator drug, typically approved under an NDA, that now has therapeutically equivalent generics.
• N, non-innovator multiple source: a generic or other non-innovator version, typically approved under an ANDA.

How the category sets the rebate

For S and I drugs, the basic rebate per unit is the greater of 23.1% of the average manufacturer price (AMP) or AMP minus best price, with lower percentages for clotting factors and drugs approved only for pediatric use. For N drugs, the basic rebate is 13% of AMP.

All three categories also owe an additional inflation rebate when AMP rises faster than inflation since the drug launched. Since January 2024, the total rebate is no longer capped at 100% of AMP, so some older drugs with steep price increases owe more than their price.

Why the category matters

The category is one of the first things market access and pricing teams check, because it changes Medicaid net price and therefore launch and lifecycle strategy. Misclassification has also been a recurring enforcement issue, since reporting an innovator drug as N lowers the rebate owed.

CMS publishes the drug category for each NDC in its Medicaid drug product data, which makes it easy to separate branded from generic utilization in State Drug Utilization Data.