Washington, D.C. — The Centers for Medicare & Medicaid Services (CMS) has announced a new initiative to lower prescription drug spending in Medicaid and expand access to affordable medications. The GENErating cost Reductions fOr U.S. (GENEROUS) Medicaid Model will allow participating states to purchase certain drugs at prices comparable to those paid in select other countries.
“Thanks to President Trump’s leadership and Dr. Oz’s bold direction at CMS, we’re expanding access to affordable medicines for millions of Americans,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “By bringing most-favored-nation pricing to Medicaid, we’re driving down drug costs and protecting the future of care for our most vulnerable citizens.”
Prescription drug spending in Medicaid exceeded $100 billion in 2024, or $60 billion after rebates, marking a $10 billion increase since 2022. Launching in 2026, the GENEROUS Model will empower CMS to negotiate with drug manufacturers for lower prices while encouraging participating states to adopt uniform and transparent coverage standards.
“Under the leadership of President Trump and Secretary Kennedy, CMS is making a historic commitment to driving down drug prices and ensuring Americans have access to life-saving medications,” said CMS Administrator Dr. Mehmet Oz. “The GENEROUS Model will help ensure state Medicaid programs are paying a fair and reasonable price for prescription drugs.”
CMS Innovation Center Director Abe Sutton added that the program “aims to ensure Medicaid pricing will be on par with other developed nations,” encouraging all eligible states to participate.
CMS will issue a Request for Applications later this fall for interested drug manufacturers and invite state Medicaid agencies to submit letters of intent. More information is available at cms.gov.
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