All 50 U.S. states, Washington, D.C., and Puerto Rico have applied to join the Trump administration’s new Medicaid drug-pricing initiative, the GENEROUS model, which aims to bring Medicaid’s prices for certain prescription drugs closer to what other developed countries pay. President Trump announced the milestone Friday from the Oval Office, flanked by Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare and Medicaid Services Administrator Mehmet Oz, framing the rollout as a major win on drug affordability ahead of November’s midterm elections.
How the GENEROUS Model Actually Works
Under the program, formally called the GENEROUS Medicaid Payment Model, participating pharmaceutical manufacturers agree to provide rebates on covered outpatient drugs to state Medicaid programs, structured so the final net price a state pays doesn’t exceed the most-favored-nation, or MFN, price, the lowest price the same drug commands in other developed countries. Manufacturers invoice states directly for the supplemental rebates needed to bring prices down to that level, CMS monitors the pricing for accuracy, and the federal government shares in the resulting savings by reducing its share of Medicaid payments to participating states.
According to CMS, all 50 states have formally applied to join, and 40 states plus Puerto Rico have already signed final agreements; the remaining states have until September 30, 2026, to complete their own agreements with the agency.
The Claimed Savings, and Why They’re Hard to Verify
The administration is citing substantial projected savings. According to the White House Council of Economic Advisers, the GENEROUS model could save state governments an estimated $27.6 billion and the federal government $36.6 billion over the next decade. That builds on a broader estimate the White House issued in May, projecting that Trump’s full slate of most-favored-nation pharmaceutical deals could save $529 billion over ten years across all federal drug programs, not just Medicaid.
Those figures come with an important caveat that multiple independent outlets have flagged: the specific terms of the underlying deals between the administration and individual drugmakers haven’t been made public, making the projected savings difficult for outside experts to independently verify. It’s also worth noting that most Medicaid beneficiaries already pay only a nominal co-payment of a few dollars per prescription, meaning the program’s savings are likely to show up primarily in state and federal budgets rather than as a directly noticeable change for most individual Medicaid patients at the pharmacy counter.
Which Drugs and Companies Are Involved
The Trump administration has now signed most-favored-nation agreements with more than two dozen drugmakers, including most of the world’s largest pharmaceutical companies. Reuters named Pfizer, Eli Lilly, and Novo Nordisk among the participating manufacturers, and the White House says the GENEROUS model spans hundreds of individual drugs across virtually every major drug class, including medicines the administration specifically flagged as critical for Medicaid beneficiaries: oncology treatments, diabetes care, and asthma medications. As one concrete example of impact so far, the White House said Medicaid programs have already received one million free prescriptions of Eliquis, a widely used blood thinner for heart disease, as a result of the broader MFN deals.
The Weight-Loss Drug Angle
Weight-loss medications have produced the most significant savings under the broader MFN framework to date. Novo Nordisk and Eli Lilly, the two dominant players in the GLP-1 weight-loss and diabetes drug market, agreed to price cuts on their respective medicines in exchange for those drugs being made more widely available through the Medicare program, a trade-off that gave both companies expanded market access in return for lower list prices.
From Executive Order to Nationwide Rollout
The path to Friday’s announcement began in May 2025, when Trump signed an executive order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” directing the administration to pursue price alignment with other developed nations. That July, Trump sent formal letters to 17 of the world’s leading pharmaceutical manufacturers outlining specific steps they would need to take to bring their U.S. prices in line with prices charged elsewhere. Agreements with all 17 of those companies followed over the subsequent months, and the administration added a further round of deals with international pharmaceutical companies and smaller biotech firms just last month, expanding the program’s reach ahead of this week’s all-50-states milestone.
Political Context
Friday’s announcement landed squarely amid the run-up to November’s midterm elections, with cost-of-living concerns dominating voter sentiment. Trump told reporters the initiative alone “should win us the midterms,” a characteristically blunt framing of the policy’s political stakes.
“GENEROUS allows states to invest more in education, infrastructure, and other ways to support Americans with Medicaid.”
— Abe Sutton, Director, CMS Innovation Center
That kind of national push to align domestic drug prices with what other countries pay isn’t unique to the U.S. Similar cost-containment pressure is playing out in other health systems too, including India’s own recent scrutiny of medical pricing gaps, where regulators have been examining a different but related question: whether the prices patients actually pay for medical products bear any reasonable relationship to what those products cost to produce and distribute in the first place.
What Comes Next
With the remaining states facing a September 30 deadline to finalize their agreements, the GENEROUS model is poised to become effectively nationwide within weeks. Whether the administration’s projected savings materialize as advertised will likely take considerably longer to assess, given that the underlying contract terms with drugmakers remain undisclosed and independent verification of the claimed billions in savings isn’t currently possible from publicly available information.