On Friday, September 18, the Centers for Medicare & Medicaid Services (CMS) announced it is working to end skyrocketing drug costs. The agency announced that all 50 states, plus the District of Columbia and Puerto Rico, have applied to participate in an initiative that provides most-favored-nation pricing for certain prescription drugs to people with Medicaid. 

A CMS news release said that forty states and Puerto Rico have already signed agreements to participate in the program, which will lower Medicaid drug costs to the levels paid by other countries. CMS estimates the program will save $64.3 billion in taxpayer dollars over the next ten years.

Under the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model: 

• Participating manufacturers will make covered outpatient drugs available to participating state Medicaid programs at most-favored-nation pricing.
• Under agreements with states, participating manufacturers will be invoiced by states for supplemental rebates to align with international prices. CMS will monitor pricing accuracy and share in rebates with states by reducing its federal share of Medicaid payments.

Remaining states have until Sept. 30, 2026, to sign agreements with CMS to participate in the model. The GENEROUS Model launched in January 2026 and runs for five years.

Pietje Kobus-McAllister has an international background and experience in content management and editing. She studied journalism in the Netherlands and Communications and Creative Nonfiction in the U.S. Pietje joined Healthcare Innovation in January 2024.