Forty states agree to tie Medicaid drug prices to international levels

Source: This report is based on an official public release from Centers for Medicare & Medicaid Services. PULSE organizes and summarizes public government communications.

Forty states and Puerto Rico have signed agreements to participate in a federal program designed to lower prescription drug costs for Medicaid beneficiaries by aligning prices with rates paid in other countries, the Centers for Medicare & Medicaid Services announced.

The GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model launched in January 2026 and will run for five years. All 50 states, the District of Columbia, and Puerto Rico have applied to participate. Remaining states have until Sept. 30, 2026, to sign on.

Under the program, drug manufacturers participating in state agreements would be invoiced for supplemental rebates to match prices in other nations. CMS will monitor pricing accuracy and share rebates with states through a reduction in the federal share of Medicaid payments.

The 40 participating states and Puerto Rico are projected to save an estimated $5.2 billion annually in taxpayer dollars, according to CMS. The program aims to lower drug spending while maintaining or improving beneficiaries' access to medications.