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Mandatory Generic Reimbursement (MGR) for Brand Drugs


It is the policy of HMSA to encourage the use of high quality generic medications when available.


The majority of HMSA plans incorporate the HMSA Mandatory Generic Reimbursement (MGR) program into their benefits. The MGR program is a generic substitution program. Generic substitution is a process by which a generic equivalent is dispensed instead of a brand name product.


The HMSA MGR program mandates generic substitution for brand drugs that have generic equivalents that are "A-rated" by the Food and Drug Administration (FDA). Generic drugs contain the same active ingredient(s), are the same strength, and have the same dosage form as their brand name counterparts. The FDA will designate a generic to be "A-rated" if it is determined to be therapeutically equivalent to the branded counterpart. "A rated" generics can be substituted with the expectation that the substituted product will produce the same clinical effect and have the same safety profile as the brand product. Refer to the FDA reference, Approved Drug Products with Therapeutic Equivalence (Orange Book), at


The HMSA MGR program does not recommend that generic substitution be used for drugs that might be considered to have a narrow therapeutic index (NTI) or which are known not to be bioequivalent, or when generic substitution conflicts with state regulations or restrictions.


When a member receives a brand name drug that is included in the HMSA MGR program, the member is responsible for the appropriate copayment plus the difference between the generic and brand name cost. The appropriate dispense as written (DAW) code of 2 should be utilized when submitting the prescription claim for reimbursement.


When a member chooses to obtain a brand name drug instead of the generic equivalent or receives the brand name drug because a particular generic equivalent was out-of-stock or not available at the pharmacy, the system will calculate the difference between brand and generic eligible charge and copay. Members may opt to fill their prescriptions at another pharmacy in cases when a particular generic equivalent is out-of-stock or not available at that pharmacy.



First Published:09/11/2007
Latest Revision:12/10/2009
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