All 50 States Opt Into Trump Medicaid Drug Rebates; CMS Puts Savings at $64.3 Billion

President Donald Trump said Friday in the Oval Office that every state Medicaid program — plus the District of Columbia and Puerto Rico — will participate in the GENEROUS model, which extends manufacturer most-favored-nation rebates to coverage for roughly 70 million people. The White House Council of Economic Advisers estimates $64.3 billion in lower Medicaid drug costs over 10 years: $36.6 billion for the federal government and $27.6 billion for the states. CMS said 40 states and Puerto Rico have already signed participation agreements. The rest have until Sept. 30 to sign. All 50 states, D.C., and Puerto Rico have applied. “We’re launching this program with the participation of all 50 states, red and blue,” Trump said, flanked by HHS Secretary Robert F. Kennedy Jr., CMS Administrator Mehmet Oz, and the governors of Arkansas, Mississippi, and South Dakota.

GENEROUS — Generating Cost Reductions for U.S. Medicaid — launched in January and runs five years. Participating manufacturers invoice states for supplemental rebates so the net price on selected brand-name drugs does not exceed the most-favored-nation price paid in other developed countries. CMS monitors the prices and shares the rebate with states by cutting the federal share of Medicaid payments. The White House fact sheet said the model covers hundreds of drugs across virtually all major classes, including oncology, diabetes, and asthma. It did not publish the drug list or the post-rebate prices. Twenty-six manufacturers covering 89 percent of the branded market are in the broader MFN deals, including Pfizer, Eli Lilly, Novo Nordisk, Merck, Johnson & Johnson, AbbVie, Amgen, and Novartis. “Americans should pay the same low prices for prescription drugs that other countries pay,” Kennedy said. “The GENEROUS Model will drive down Medicaid drug costs, save taxpayers billions, and expand access to lifesaving medicines for the Americans who need them most.” Oz said the program was “rescuing state budgets” and that “the $50 billion in pharmaceutical prices that they are paying after rebates is crowding out schools and roads and long-term care and rural care.” Trump said states could put the savings into other health services “or something else,” and that CEA’s $64.3 billion figure “could be $100 billion.” He also said, “This one thing alone should win us the midterms.” Medicaid beneficiaries already pay only nominal copays; the cash savings land on federal and state budgets. Industry groups have argued the pricing model threatens future research. The remaining unsigned CMS agreements are due Sept. 30.