All 50 states, the District of Columbia and Puerto Rico have applied to a new federal program that ties Medicaid’s drug prices to the lowest price paid by other wealthy countries. Forty of those states and Puerto Rico have already signed the agreement that makes participation official, and the rest are working against a hard deadline just over a week away. For households on Medicaid, or living alongside someone who is, the change reaches the pharmacy counter directly, since many of the drugs covered by the new rebate deal are ones people take every day, from insulin to blood thinners.
Applied Versus Signed: What the Announcement Actually Says
The White House and the Centers for Medicare & Medicaid Services announced the milestone on September 18, 2026, and the two figures behind it are different from each other on purpose. According to the White House fact sheet, all 50 states plus D.C. and Puerto Rico have applied to participate in the model, which is the “every state is moving toward” part of the story. Separately, CMS says 40 states and Puerto Rico have already signed the participation agreement, with the remaining states given until September 30, 2026, to finalize theirs. Applying is the first step; signing is the one that actually binds a state’s Medicaid program to the new pricing.
Inside the kit: 51 state Medicare cost-help packs, the new Part D out-of-pocket cap, the prior-authorization appeal steps and a medication and cost tracker. Open The Medicare Cost & Coverage Protection Kit.
How the GENEROUS Model Actually Sets a Price
The program has a name: the GENEROUS Medicaid Payment Model, short for GENErating cost Reductions fOr U.S. Medicaid. Under the model, participating drug manufacturers agree to make covered outpatient drugs available to state Medicaid programs at most-favored-nation pricing — meaning the price cannot exceed what the same manufacturer charges in other developed countries. States invoice manufacturers for supplemental rebates to make up the difference, and CMS says it will monitor pricing accuracy and share part of the rebate savings with states through a reduction in the federal share of Medicaid payments. As of the September 18 announcement, 26 pharmaceutical manufacturers have signed on, covering 89 percent of the branded drug market. The model launched in January 2026 and is set to run for five years; CMS keeps a running list of which states have signed on its Innovation Center model page.
$64.3 Billion, Split Between Washington and the States
The Council of Economic Advisers estimates the model will save $64.3 billion over the next ten years across all 50 Medicaid programs once fully signed. Because states and the federal government split Medicaid’s costs, CEA projects $36.6 billion of that savings will accrue to the federal government and $27.6 billion to state governments — money officials say frees up state budgets for other services aimed at Medicaid’s most vulnerable enrollees. That figure is separate from the administration’s broader most-favored-nation push across all drug pricing initiatives, which CEA now projects at $600 billion in savings over a decade once every agreement is counted.
A Year of Deal-Making Behind One Announcement
The September 18 Medicaid milestone did not appear out of nowhere; it capped roughly sixteen months of manufacturer-by-manufacturer negotiating. The administration’s most-favored-nation push began with an executive order signed May 12, 2025, followed by letters sent July 31, 2025, to 17 major drug manufacturers laying out the pricing terms the administration wanted. The first agreement, with Pfizer, was announced September 30, 2025. Nine more manufacturer agreements followed on December 19, 2025, and the administration separately reached a deal with the United Kingdom on December 1, 2025, that raises the price the U.K. pays for new prescription drugs by 25 percent — part of the broader argument that other countries should stop underpaying relative to American patients. TrumpRx.gov, the consumer-facing side of the same pricing push, launched February 5, 2026, and a ninth round of manufacturer deals was announced August 31, 2026, three weeks before the Medicaid participation numbers were released.
The Officials Behind the Numbers
“Americans should pay the same low prices for prescription drugs that other countries pay,” HHS Secretary Robert F. Kennedy Jr. said in the CMS announcement, adding that the model “will drive down Medicaid drug costs, save taxpayers billions, and expand access to lifesaving medicines.” CMS Administrator Dr. Mehmet Oz said the deal means “Medicaid programs will get the best possible price for drugs, delivering better value for taxpayers.” CMS Innovation Center Director Abe Sutton called the milestone significant, saying that even a fraction of reduced drug spending in Medicaid “allows states to invest more in education, infrastructure, and other ways to support Americans with Medicaid.”
A Companion Program Already Reaching Retirees
The Medicaid deal runs alongside a related consumer program, TrumpRx.gov, which brings the same most-favored-nation pricing directly to people buying drugs outside Medicaid. The White House fact sheet says patients have saved more than $700 million on medicines through that site since its February 2026 launch. One example the administration points to: seniors without GLP-1 coverage for obesity gained access to those drugs for $50 a month starting in July 2026, and in the two months since, roughly 600,000 seniors saved a combined $216 million. Neither program erases the separate question of what a specific Medicare Part D plan charges for a specific drug in 2027, which is a state-by-state, plan-by-plan calculation Medicaid’s new pricing model does not touch.
The Gap Between a National Pricing Deal and One Household’s Drug Bill
A national rebate agreement between Washington and a state Medicaid program says nothing about what a specific Medicare Part D plan charges for a specific prescription next year, or what happens when a pharmacy denies a refill pending prior authorization. Those decisions are made plan by plan and appealed form by form, on a timeline that rarely lines up with when a national pricing announcement makes headlines.
The Medicare Cost & Coverage Protection Kit is a 10-page kit covering the new Part D out-of-pocket cap and the prior-authorization appeal steps, plus 51 state Medicare cost-help packs.
Compare the Part D cap and appeal steps against a current plan using The Medicare Cost & Coverage Protection Kit.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources.
