All 50 States Join Trump’s ‘Most Favored Nation’ Medicaid Drug Pricing Plan

President Trump announced Friday that all 50 states, along with Washington, D.C., and Puerto Rico, have agreed to participate in his administration’s new Medicaid prescription drug pricing program, expanding the initiative nationwide.

The program, known as the GENEROUS Model, is designed to bring the net prices Medicaid pays for participating prescription drugs closer to prices paid in other developed countries. Drug manufacturers participating in the program will provide additional rebates to state Medicaid programs to achieve those lower net prices.

President Trump has made “most favored nation” pricing a major part of his effort to reduce prescription drug costs. The administration argues that Americans have historically paid substantially higher prices for many medications than patients in comparable countries, effectively leaving the U.S. to shoulder a disproportionate share of pharmaceutical costs.

Major pharmaceutical manufacturers, including Pfizer, Eli Lilly and Novo Nordisk, are participating in agreements connected to the initiative. The arrangements cover hundreds of medications, including treatments for conditions such as diabetes, asthma and cancer.

The White House Council of Economic Advisers estimates the new pricing framework could save state governments approximately $27.6 billion over the next decade. The federal government could save another $36.6 billion, bringing projected Medicaid savings to roughly $64 billion over 10 years.

Medicaid already receives substantial rebates from pharmaceutical manufacturers, meaning the program often pays considerably less than a drug’s listed price. The GENEROUS Model is intended to secure additional discounts by tying participating manufacturers’ net prices to international benchmarks.

The program could have a particularly significant impact on certain high-cost medications. The administration has highlighted weight-loss drugs as one area where international pricing arrangements could produce substantial savings for Medicaid programs and expand access for eligible patients.

HHS Secretary Robert F. Kennedy Jr. has backed the initiative, arguing that lowering prescription drug costs will help preserve Medicaid resources while making medications more affordable. CMS Administrator Dr. Mehmet Oz has similarly promoted the program as a way to use the federal government’s purchasing power to secure better prices.

The pharmaceutical industry has raised objections to most-favored-nation pricing. PhRMA has argued that international reference pricing could affect investment in new treatments and potentially create problems with patient access, while the administration maintains that drugmakers can continue innovating without charging Americans significantly more than patients overseas.

With every state agreeing to participate, the program is positioned to become a nationwide component of Medicaid drug purchasing rather than an initiative limited to a smaller group of states. The ultimate savings will depend on which medications are included, manufacturer participation and the international prices used to calculate the additional rebates.