By Admire Manzamwa
WASHINGTON — President Donald Trump announced Friday that Medicaid programs in all 50 states, the District of Columbia and Puerto Rico will participate in a new “most favored nation” prescription drug pricing initiative intended to lower the net cost of selected medications to prices paid in other developed countries.
The program, dubbed the GENEROUS Medicaid Payment Model, will require participating drug manufacturers to provide rebates to state Medicaid programs on expensive brand-name drugs so the final price to Medicaid does not exceed the most favored nation price, according to a White House fact sheet. The administration said the model covers hundreds of drugs “across virtually all major drug classes,” including medications to treat cancer, diabetes and asthma.
“We’re launching this program with the participation of all 50 states, red and blue,” Trump said in an Oval Office announcement on Sept. 18, accompanied by the governors of Arkansas, Mississippi and South Dakota. The White House said agreements are in place with 26 pharmaceutical manufacturers representing about 89 percent of the branded-drug market.
The White House Council of Economic Advisers estimates the initiative will save taxpayers $64.3 billion over the next decade — $36.6 billion for the federal government and $27.6 billion for states. The estimates have not been independently verified, and the White House did not release details on which drugs will be included or final prices after rebates are applied.
The announcement comes as cost-of-living issues dominate voter concerns ahead of the November midterm elections. “This one thing alone should win us the midterms,” Trump told reporters in the Oval Office, where he was flanked by Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare & Medicaid Services Administrator Mehmet Oz.
Health policy experts say the eventual savings remain uncertain because the content of the deals with pharmaceutical companies has not been made public. The Medicaid drug discounts have drawn skepticism from critics who note that Medicaid, funded jointly by state and federal governments, already draws steep discounts from drugmakers mandated by existing law.
The broader most-favored-nation initiative, which Trump launched with an executive order last year committing the U.S. to paying the same price for medications as the nation paying the lowest price anywhere in the world, is estimated by the White House to save the government $529 billion over a decade. The administration said its deals with drugmakers have already delivered one million free prescriptions of Eliquis, a widely used heart disease drug.
Friday’s announcement also follows earlier rounds of drug-pricing agreements, including a first pact with Pfizer in September 2025 and follow-up deals with 16 additional manufacturers.
This story is based on reporting by the Associated Press, Reuters and USA Today.