CMS reports broad state interest in GENEROUS Medicaid MFN model

All 50 US states have applied to participate in the GENEROUS model, marking a further step in the implementation of the Trump Administration's Most-Favored-Nation (MFN) drug pricing policy. However, not all states have yet formally signed up, and questions remain over which products states will ultimately select for MFN pricing.

The Baseline

• All 50 states, the District of Columbia and Puerto Rico have applied to participate in the GENEROUS Model.
• As of September 18, 2026, 40 states and Puerto Rico had signed participation agreements, with remaining states given until September 30, 2026, to finalize their participation.
• The model covers hundreds of drugs across major therapeutic areas, including oncology, diabetes and asthma.
• The Council of Economic Advisers estimates that GENEROUS could reduce Medicaid drug spending by $64.3 billion over 10 years.

The Centers for Medicare & Medicaid Services (CMS) has announced broad state interest in the GENErating cost Reductions fOr US Medicaid (GENEROUS) Model, the first of three models developed as part of the Trump Administration's renewed push towards MFN drug pricing.

All 50 states, alongside the District of Columbia and Puerto Rico, submitted applications to participate, CMS claims. At the time of the announcement, 40 states and Puerto Rico had gone on to sign agreements, with the remaining states given until September 30, 2026 to finalize their participation.

The model launched in January 2026 and is scheduled to run for 5 years. Participation is voluntary for both states and manufacturers.

In its own announcement, the Whitehouse said GENEROUS will cover “hundreds of individual drugs, across virtually all major drug classes, including those acutely important to Medicaid beneficiaries like oncology, diabetes care, and asthma.”

How will GENEROUS work?

Under GENEROUS, participating manufacturers agree to provide MFN pricing on covered outpatient drugs through supplemental rebates to participating state Medicaid programs.

Further details published by CMS on the model explain that manufacturers report international net unit prices to CMS, with states invoicing manufacturers quarterly for supplemental rebates intended to bring Medicaid net prices into line with prices paid in selected international markets.

States will not necessarily apply the model to every eligible drug. CMS states that individual Medicaid programs can decide which covered outpatient drugs they want to obtain at a price similar to that paid internationally, allowing them to consider the MFN price alongside existing manufacturer rebates and other pricing arrangements.

Participating manufacturers will also negotiate standardized coverage criteria with CMS, rather than negotiating those criteria separately with each participating state.

According to CMS, the supplemental rebates provided through GENEROUS will not change Medicaid Best Price and therefore will not affect ceiling prices under the 340B Drug Discount Program.

Which manufacturers are participating?

The White House says the Administration now has MFN agreements with 26 pharmaceutical manufacturers, which it estimates account for 89% of the branded drug market.

The agreements extend beyond the 17 manufacturers originally contacted by the Administration in July 2025 and include Pfizer, AstraZeneca, Eli Lilly, Novo Nordisk, Johnson & Johnson, AbbVie, Novartis, Sanofi and GSK, among others.

CMS has stated that manufacturers that have reached agreements with the Administration will participate in GENEROUS once outstanding terms are finalized. Other manufacturers can also participate voluntarily, provided they meet the requirements of the model.

How much could GENEROUS save?

The Council of Economic Advisers estimates that GENEROUS could reduce Medicaid drug spending by $64.3 billion over the next 10 years, comprising $36.6 billion in federal savings and $27.6 billion for states.

These remain projected rather than realized savings, with the eventual impact dependent in part on state and manufacturer participation and the products selected under the model.

What happens next?

While the number of state applications indicates broad interest in the model, the final scale of participation will become clearer after the September 30, 2026 deadline. There is also a further question around which products individual states decide to include.

Speaking recently to The Evidence Base, Tim Wright (Genesis Research Group) noted that the next stage will provide a clearer picture of how extensively states actually use GENEROUS.

As Wright explained:

“States are comparing the prices under MFN with the current prices and the current rebates they're getting, and obviously logic says that they will select those products where MFN provides a greater rebate.”

The eventual impact of GENEROUS will therefore depend not only on state participation, but also on which products are selected and the extent to which MFN pricing offers additional savings over existing Medicaid rebates.

GENEROUS is one part of the Administration's wider MFN policy. Two further proposed mandatory models, GUARD (Guarding US Medicare Against Rising Drug Costs) for Medicare Part D and GLOBE (Global Benchmark for Efficient Drug Pricing) Medicare Part B, remain under development.

In our latest video, Wright provides an update on all three models, including where GENEROUS stands following the latest CMS announcement, what could happen next with GUARD and GLOBE, and how manufacturers are preparing for the potential impact of MFN on global pricing and launch strategies.

Watch the full interview with Tim Wright here.