Trump Drug Pricing Plan to Cover All 50 States
The Trump administration is preparing to announce that Medicaid programs in all 50 states will have access to international benchmark pricing for certain prescription drugs, expanding President Donald Trump’s effort to reduce the amount the United States pays for medications compared with other developed countries.
President Trump is expected to promote the initiative at the White House on Friday alongside the governors of South Dakota, Mississippi and Arkansas. The announcement comes as the administration has placed prescription drug costs among its major domestic policy priorities ahead of the November midterm elections. Semafor first reported details of Friday’s planned announcement.
According to estimates from the White House Council of Economic Advisers cited by Semafor, the initiative is projected to produce $27.6 billion in net savings for state governments over the next decade, in addition to $36.6 billion in savings for the federal government. Those figures are administration estimates and have not yet been independently demonstrated through the program’s results.
The administration’s approach is based on the idea that Medicaid should be able to obtain prices for certain medicines that more closely resemble the lower prices paid in selected foreign countries.
“This is a clear cut example of how you can save money in the Medicaid program in a way that strengthens the program as a whole,” a White House official told Semafor. “By getting lower drug prices, more people will have access.”
Reuters reported that the administration was preparing to make the announcement, although the news organization said it had not independently confirmed Semafor’s reporting.
At the time of that report, neither the White House nor the Department of Health and Human Services had immediately responded to Reuters requests seeking comment.
At the center of the initiative is the administration’s GENEROUS Model — short for GENErating cost Reductions fOr U.S. Medicaid — which was launched in January 2026. Under the program, participating drug manufacturers provide supplemental rebates intended to bring Medicaid’s net cost for selected medicines in line with prices paid in certain other countries.
The Centers for Medicare & Medicaid Services says the five-year model is voluntary for both states and pharmaceutical manufacturers. States choose whether to participate and which eligible medicines they want covered through the program.
The initiative is part of President Trump’s broader push for what the administration calls “most-favored-nation” drug pricing, an approach intended to narrow the gap between prescription drug prices in the United States and those paid abroad.
The administration has also been reaching agreements directly with pharmaceutical companies. On Aug. 31, it announced another group of agreements involving nine midsize pharmaceutical and biotechnology companies, including Teva Pharmaceuticals, Astellas Pharma and UCB. Those arrangements followed earlier agreements reached with other major drugmakers.
The ultimate size of the savings produced by the Medicaid initiative, however, remains uncertain.
One reason is that Medicaid already obtains significant discounts on prescription medications through federally required manufacturer rebates. States are also permitted to negotiate supplemental rebates of their own, raising questions among health-policy analysts about how much additional savings international benchmarking can generate. Semafor noted that experts have questioned whether the GENEROUS model will produce savings on the scale projected by the administration.
CMS has reported that gross Medicaid prescription drug spending exceeded $100 billion in 2024. After manufacturer rebates were collected, net spending was approximately $60 billion.
The administration nevertheless believes the international-pricing mechanism can drive those costs down further.
Under the GENEROUS system, CMS negotiates with participating pharmaceutical manufacturers, which report applicable international net prices. Participating states can then obtain supplemental rebates intended to reduce the net Medicaid price of eligible drugs toward the agreed international benchmark.
Friday’s announcement represents a nationwide expansion of access to that approach, giving state Medicaid programs across the country the option of participating as the Trump administration seeks to make lower prescription drug prices a prominent part of its domestic agenda.
{Matzav.com}
