Trump Says All 50 States Will Join Medicaid Drug Pricing Program/ TezzBuzz/ WASHINGTON/ J. Mansour/ President Donald Trump announced that all 50 states will participate in a Medicaid program linking selected drug prices to lower prices paid in other countries. The administration says its “GENEROUS” model could save Medicaid billions of dollars, potentially freeing state funds for other priorities. Health policy experts say the projected savings cannot yet be independently confirmed because the pharmaceutical agreements remain largely confidential.
Quick Look
- All 50 states are joining the Medicaid “GENEROUS” model.
- The program applies Most Favored Nation pricing to selected medications.
- Prices would be linked to those paid in certain other affluent countries.
- Medicaid patients already generally pay small prescription copayments.
- State and federal Medicaid budgets would receive the direct savings.
- The White House has projected $529 billion in savings over 10 years.
- The underlying agreements have not been fully released publicly.
- Experts question whether Congress has enough information to codify the deals.
- Critics want lower prices extended beyond government health programs.
- The announcement comes ahead of the November midterm elections.
Deep Look
All 50 states enter Medicaid drug pricing model
WASHINGTON — President Donald Trump announced that every state will participate in a Medicaid program intended to reduce the price of selected prescription drugs by linking them to lower prices charged in other countries.
The Medicaid “GENEROUS” model uses what the administration calls Most Favored Nation pricing. Under the approach, Medicaid would pay net prices comparable to prices available in designated foreign markets.
Trump made the announcement in the Oval Office alongside Health and Human Services Secretary Robert F. Kennedy Jr., Centers for Medicare & Medicaid Services Administrator Mehmet Oz and several state officials.
“This one thing alone should win us the midterms,” Trump told reporters.
The announcement comes as the cost of health care, groceries, fuel and other necessities remains a major concern for voters ahead of the November congressional elections. (Associated Press)
How Most Favored Nation pricing works
Trump signed an executive order in 2025 establishing a Most Favored Nation drug policy.
The stated objective is to prevent the United States from paying substantially more for prescription medications than other wealthy countries. For drugs covered by a negotiated agreement, the U.S. price would be connected to the lowest—or among the lowest—prices available in selected foreign markets.
American drug prices vary based on several factors, including insurance coverage, competition among manufacturers, rebates and negotiations involving insurers and pharmacy benefit managers.
Most Americans receive prescription coverage through employers, individual insurance plans, Medicare or Medicaid. Those plans shield patients from some of a medication’s total cost, but government programs, employers and insurers still bear significant expenses.
The GENEROUS model focuses specifically on Medicaidthe jointly funded federal-state health program serving eligible low-income adults, children, pregnant women, older adults and people with disabilities.
Medicaid patients may not see large changes at the pharmacy
Medicaid beneficiaries already typically pay nominal prescription copayments of only a few dollars. As a result, the program’s immediate financial benefits may be more visible in government budgets than at pharmacy counters.
Lower net prices could reduce the amounts paid by state Medicaid agencies and the federal government. States could then use the resulting savings for other health services or budget priorities.
“Every state will have the ability to use those extra billions of dollars to invest in other healthcare improvements or something else,” Trump said.
Exactly which medications are covered, how their prices were calculated and how much individual states could save have not been fully disclosed.
White House projects billions in savings
The administration has said its pharmaceutical pricing agreements could generate significant long-term reductions in Medicaid spending.
In May, the White House estimated that Trump’s agreements with pharmaceutical manufacturers could save as much as $529 billion over 10 years.
That projection covers deals intended to lower the U.S. prices of certain medications to levels paid in other countries. However, the contracts and commercially sensitive pricing terms have not been released in full.
Without those details, outside analysts cannot independently determine whether the projected savings are realistic or how much of the estimate is attributable specifically to the Medicaid GENEROUS model.
The $529 billion figure therefore remains an administration projection rather than a verified total.
Experts seek more information about pharmaceutical deals
Kathy Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, said the administration faces pressure to provide more detailed information supporting its savings claims.
She said the lack of public data could make it difficult for lawmakers to turn Trump’s agreements into permanent legislation.
“He is saying Congress should codify all of his MFN arrangements,” Hempstead said. “But it’s kind of unreasonable because it’s not clear what Congress would actually do. No one knows what is in these deals.”
The concern extends beyond the immediate savings. Analysts also question whether the agreements will remain in effect after Trump leaves office or whether drug prices could return to previous levels under a future administration.
Congressional action could make the policy more durable, but lawmakers would need enough information to determine how the pricing system works and how it would affect federal spending.
White House defends keeping pricing terms confidential
White House spokesperson Kush Desai compared the administration’s limited disclosures with drug-price negotiations conducted under former President Joe Biden’s Inflation Reduction Act.
Desai said those earlier agreements also withheld commercially sensitive information.
He said experts “now poking holes at the Trump administration for also not wanting to disclose commercially sensitive information should be regarded as either an idiot or partisan hack.”
Pharmaceutical pricing contracts frequently contain confidential rebate and discount information. Policy specialists, however, say enough data must be available for Congress and independent analysts to evaluate savings claimed by an administration.
Some advocates want broader eligibility for lower prices
The announced pricing model applies to Medicaid, meaning people with employer-sponsored insurance, individual market coverage or other health plans may not receive the same negotiated prices.
JD Hayworth, a former Republican congressman and spokesperson for the Pharmaceutical Reform Alliancedescribed the program as an improvement but said its reach remains limited.
He said the announcement reflects “meaningful progress, but that progress remains incomplete.”
Millions of people who are not enrolled in Medicaid or another government health program continue to face high prescription costs, Hayworth said.
How much an individual pays depends on the medication, insurance plan, deductible, copayment requirements and whether a competing treatment or generic version is available.
Announcement enters broader affordability debate
Trump has highlighted individual agreements with pharmaceutical companies as part of his response to voters’ concerns about affordability.
Critics contend that the administration has not established a comprehensive strategy for controlling overall health expenses, including insurance premiums, hospital charges and out-of-pocket costs.
Those concerns intensified after enhanced Affordable Care Act subsidies expired, increasing premiums for many people purchasing coverage through the individual insurance market.
The GENEROUS model could lower government spending on selected Medicaid prescriptions, but its effect on the broader health system—and on patients outside Medicaid—will depend on the drugs included, negotiated prices and duration of the agreements.
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