CMS Launches Medicaid Drug Pricing Model Tied to International Rates

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The Centers for Medicare & Medicaid Services (CMS) announced that all 50 states, plus the District of Columbia and Puerto Rico, have applied to join the GENEROUS Model — a five-year initiative that requires participating drug manufacturers to sell covered outpatient drugs to Medicaid programs at "most-favored-nation" pricing, meaning the lowest prices paid by other countries. Forty states and Puerto Rico have already signed agreements; remaining states have until September 30, 2026, to do so. CMS estimates the program will save $64.3 billion in taxpayer dollars over ten years while preserving or improving quality of care for Medicaid enrollees.

For readers on Medicaid — including low-income adults aged 50 and older, and many people who are dually enrolled in both Medicare and Medicaid — the model is intended to expand access to medications that may currently be unaffordable or restricted under state formularies. The model launched in January 2026 and runs for five years; CMS will monitor pricing accuracy and share rebate savings with participating states.