All 50 States Apply for CMS's GENEROUS Model, With $64.3B in Savings Projected

CMS recently announced that all 50 states, plus the District of Columbia and Puerto Rico, have submitted applications to participate in the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model.¹

The GENEROUS Model, launched in January 2026, aims to reduce the price of drugs for Medicaid beneficiaries by aligning them with prices paid by other countries; the specific countries used for comparison have not been disclosed. Net Medicaid spending on prescription drugs, after rebates, grew 46% from fiscal year (FY) 2019 to FY 2024—from $31 billion to $46 billion, according to a KFF analysis. Over that same period, net spending per prescription rose 42% (from $43 to $61), and net spending per enrollee rose 25% (from $481 to $603). The growth has largely been driven by the emergence of novel therapies, including glucagon-like peptide-1 receptor agonists and cell and gene therapies that often target rare diseases.² CMS projects the GENEROUS Model will save taxpayers an estimated $64.3 billion over the next 10 years.¹

“The GENEROUS Model will drive down Medicaid drug costs, save taxpayers billions, and expand access to lifesaving medicines for the Americans who need them most,” Robert F. Kennedy Jr., HHS secretary, said in a press release.¹

How the Model Connects States and Drug Manufacturers

The model links participating manufacturers—including AstraZeneca, Pfizer, and EMD Serono, which are expected to join once terms are finalized—with state Medicaid programs. Participating manufacturers agree to offer lower prices to state Medicaid programs and report the international net unit price for their drugs, along with supplemental rebate amounts, to CMS. This centralized reporting is designed to reduce the administrative burden manufacturers would otherwise face negotiating prices individually with each state.

States must enter into supplemental rebate agreements to participate. Each state decides which covered outpatient drugs it wants priced closer to the lower international net price, then bills manufacturers quarterly for the resulting supplemental rebates.

Those supplemental rebates are not expected to affect Medicaid Best Price, meaning they will not change the ceiling prices offered under the 340B Drug Discount Program.³ The model's pricing applies to a participating manufacturer's portfolio of covered outpatient drugs, with rebate amounts calculated to bring net Medicaid prices in line with what select other countries pay.^1,3

Will Medicaid Beneficiaries Benefit From This Model?

Although the GENEROUS Model appears to target Medicaid spending and drug access for beneficiaries, it arrives alongside other Trump administration decisions affecting the program. The reconciliation law President Trump signed in July 2025, for example, is expected to result in significant Medicaid funding cuts and coverage losses.²

Medicaid beneficiaries are typically protected from high out-of-pocket drug costs, which raises the question of how much this model will actually change for them—and whether it addresses the underlying drivers of Medicaid drug spending or simply offsets the coverage losses expected from the reconciliation law's budget cuts.^2,3

Manufacturer Deadlines and Lingering Questions About the Rollout

Participation is voluntary for both manufacturers and state Medicaid agencies. In March 2026, CMS extended the application deadline for manufacturers—from March 31 to April 30, 2026—to give small and midsize companies more time to apply, even though the model had already been announced in November 2025.⁴

“Extending this deadline will allow for small and midsize manufacturers to participate and lower costs to the Medicaid program, providing more flexibility for state budgets and ensuring that people who depend on Medicaid continue to access the care they need,” Abe Sutton, director of the CMS Innovation Center, said in a press release.

As of September 18, 2026, only 40 states plus Puerto Rico have signed agreements confirming their participation in the model.¹ CMS has not yet reported when state Medicaid programs will begin receiving supplemental rebates from manufacturers, nor has it released a finalized list of participating manufacturers beyond those named above.

References

1. CMS Newsroom. CMS announces participants in landmark Medicaid drug payment model to bring down drug costs for most vulnerable Americans. CMS. September 18, 2026. Accessed September 22, 2026. https://www.cms.gov/newsroom/press-releases/cms-announces-participants-landmark-medicaid-drug-payment-model-bring-down-drug-costs-most

2. Williams E. Recent trends in Medicaid outpatient prescription drugs and spending. KFF. March 12, 2026. Accessed September 22, 2026. https://www.kff.org/medicaid/recent-trends-in-medicaid-outpatient-prescription-drugs-and-spending/

3. CMS. GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) model. CMS. September 18, 2026. Accessed September 22, 2026. https://www.cms.gov/priorities/innovation/innovation-models/generous

4. CMS Newsroom. CMS to lower drug costs and improve care by extending deadline for GENEROUS model application. CMS. March 2, 2026. Accessed September 22, 2026. https://www.cms.gov/newsroom/press-releases/cms-lower-drug-costs-improve-care-extending-deadline-generous-model-application