All 50 States Join Medicaid GENEROUS Drug-Pricing Model as Pfizer MFN Contract Details Surface
核心洞察
The Trump administration said all 50 state Medicaid (搜索) programs have agreed to participate in the GENEROUS international reference-pricing model, which launched in January as a five-year voluntary program.
CMS calculates a most-favored-nation price from manufacturer-reported data in eight countries, using the second-lowest net international price adjusted for purchasing power parity.
A White House analysis estimated a Medicaid (搜索) MFN framework could save about $64.3 billion over 10 years, though KFF says savings depend on participation and confidential pricing data.
President Donald Trump announced Friday that all 50 states will participate in the administration's Medicaid (搜索) GENEROUS drug-pricing model, a program that uses international reference pricing to lower what Medicaid pays for certain prescription medicines. The nationwide rollout marks an expansion of the administration's "Most Favored Nation" drug-pricing agenda, which seeks to narrow the gap between U.S. prescription drug costs and prices paid in other developed countries.
The GENEROUS model, short for "GENErating cost Reductions fOr U.S. Medicaid (搜索)," operates through the existing Medicaid Drug Rebate Program and allows the Centers for Medicare & Medicaid Services (搜索) to negotiate supplemental rebate agreements with participating manufacturers. The five-year model launched in January and was initially voluntary for both states and manufacturers. States can choose which eligible drugs they want covered but must adopt standardized coverage criteria negotiated by CMS and manufacturers, including utilization-management tools such as prior authorization or step therapy.
How the international benchmark is set
CMS calculates an MFN price for participating drugs using manufacturer-reported pricing data from eight countries: the United Kingdom, France, Germany, Italy, Canada, Japan, Denmark and Switzerland. The benchmark is based on the second-lowest net international price after rebates and discounts and is adjusted using purchasing-power-parity measures. CMS then negotiates supplemental rebates intended to bring Medicaid (搜索)'s net price down to that level.
The program focuses on brand-name drugs, including single-source and innovator multiple-source medicines. Unlike commercial drug pricing, which is negotiated primarily within the U.S. market among insurers, pharmacy benefit managers and manufacturers, the GENEROUS model explicitly incorporates international price benchmarks to determine a target Medicaid (搜索) net price.
"This one thing alone should win us the midterms. It won't, because the press doesn't report it," Trump told reporters in the Oval Office. He added that "every state will have the ability to use those extra billions of dollars to invest in other healthcare improvements or something else."
Savings estimates remain uncertain
The White House has argued that broader MFN drug-pricing initiatives could save taxpayers billions of dollars over the next decade. A White House analysis previously estimated that a Medicaid (搜索) MFN framework could save approximately $64.3 billion over 10 years.
Health policy researchers say it remains difficult to determine whether those estimates will be achieved because several variables remain unknown. According to KFF, the independent health policy nonprofit, savings will depend heavily on which manufacturers participate, what drugs are included, the size of existing Medicaid (搜索) rebates and confidential international pricing information that is not publicly available.
KFF also notes that Medicaid (搜索) already receives some of the deepest prescription-drug discounts in the U.S. healthcare system. Its analysis found that rebates reduced gross Medicaid prescription-drug spending by an average of 53 percent between fiscal years 2019 and 2024. A separate MACPAC analysis found rebates reduced spending on brand-name drugs by 62 percent in fiscal year 2020. That means the program's impact could vary significantly from drug to drug. Newer medicines with limited competition may generate meaningful additional savings if they currently receive relatively small rebates, while other drugs may already receive such large Medicaid rebates that additional savings under the GENEROUS model could be limited.
Pfizer contract shows foreign-revenue sharing
Separately released documents provide new detail on how the MFN policy intersects with trade negotiations. The "most favored nation" contract with Pfizer was released by the consumer watchdog organization Public Citizen, which obtained it after filing a Freedom of Information Act lawsuit. The group released documents related to the Pfizer and Eli Lilly contracts, though the rest of the more than two dozen deals remain confidential.
Under the contract, Pfizer agreed to share a portion of its net increased revenue from charging higher prices abroad with the Department of Health and Human Services. The provision applies to medicines already on the market and is effective from Jan. 1, 2026, through Jan. 20, 2029. The rate of revenue sharing, included medicines and other details are redacted. The redactions make it unclear whether Eli Lilly agreed to similar terms.
"President Trump has been very clear that this is not a one-way street: Foreign prices are going to increase and American patients are no longer going to solely bear the burden of funding global innovation," White House spokesperson Kush Desai said in a statement. "The foreign-revenue provisions are intended to ensure incremental revenue from higher prices abroad benefit American patients, not drugmakers."
Pfizer spokesperson Amy Rose said the company stands "by our belief that the agreement Pfizer voluntarily reached with the administration last September is a win for American patients" and achieves priorities to lower prices for patients, redistribute global research and development costs, and create a predictable investment environment.
It is unclear what HHS plans to do with the money. The contract states that the money will be used "for the purpose of lowering costs for US patients and taxpayers," but provides no additional detail. The initial White House fact sheet on the Pfizer deal released last year stated that Pfizer is required to "repatriate increased foreign revenue on existing products that Pfizer realizes as a result of the President's strong America First U.S. trade policies for the benefit of American patients."
The US and UK in December reached a trade agreement to allow tariff-free imports of medicines in exchange for a significant reduction in rebates drugmakers pay to the UK's National Health Service. Under the agreement, the UK government will boost spending on medicines by 25 percent.
Political stakes around affordability
The announcement gives Republicans a healthcare policy achievement to promote as healthcare affordability, Medicare and prescription drug costs feature in November's midterm elections. Trump said "every single state" signed on after some governors initially questioned whether the administration's savings claims were genuine. "They all signed up quickly," he said.
Arkansas Republican Governor Sarah Huckabee Sanders praised the effort during the White House event, telling Trump, "You're the only person who could have gotten this done," and described the initiative as a potential "generational change in our country's health care."
A January KFF Health Tracking Poll found that 66 percent of Americans worry about being able to afford healthcare for themselves or their families, while 55 percent said their healthcare costs had increased over the previous year. KFF found voters were nearly evenly divided on which party they trusted more to address prescription drug prices, with 35 percent choosing Democrats and 30 percent selecting Republicans.
"Health care is intensely personal," Michael Fahey, CEO of Fahey Communications and a political strategy expert, told Newsweek. "If voters hear reform and think lower costs or greater access, that can be attractive. If they hear reform and think losing their current insurance, changing doctors or handing over control of a system they already know, the politics change very quickly."