Donald Trump Strikes New Drug Price Deal as Democrats Eye Midterm Gains
Trump says all 50 states have joined his Medicaid drug-pricing plan as Democrats seek to keep healthcare central in the midterms.
President Donald Trump announced on Friday that all 50 states will participate in the administration's Medicaid drug-pricing model, aimed at lowering Medicaid payments for certain prescription medicines. This initiative, known as the GENEROUS model, uses an international reference-pricing system to reduce the amount Medicaid pays for brand-name drugs.
The model operates through the existing Medicaid Drug Rebate Program, allowing the Centers for Medicare & Medicaid Services to negotiate supplemental rebate agreements with pharmaceutical manufacturers.
The five-year model, launched in January, was initially voluntary for both states and manufacturers, but all state Medicaid programs have now agreed to participate. The White House argues that this model could save taxpayers billions of dollars over the next decade, estimating a potential savings of $64.3 billion over 10 years. However, health policy researchers caution that the actual savings depend on several factors, including which drugs and manufacturers participate and the size of existing Medicaid rebates.
The GENEROUS model is a significant expansion of President Trump's "Most Favored Nation" (MFN) drug-pricing agenda, which seeks to reduce the gap between U.S. prescription drug costs and prices in other developed countries. Currently, Medicaid already receives substantial discounts on prescription drugs, with rebates reducing gross spending by an average of 53 percent between 2019 and 2024.
The impact of the GENEROUS model on drug prices may vary significantly, as newer medicines with limited competition and older drugs already receiving large rebates could see varying degrees of savings.
Written by urgent.news from Newsweek's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
