President Trump just turned one of Washington’s oldest drug-pricing complaints into a nationwide Medicaid agreement.

All 50 states, the District of Columbia and Puerto Rico have applied to participate in a model that ties the prices of selected Medicaid drugs to the lower prices paid in other developed countries.

This reaches far beyond a pilot in a handful of friendly states. The nationwide move covers hundreds of medicines across major drug classes, with the administration projecting $64.3 billion in taxpayer savings over the next decade.

President Trump announced the breakthrough Friday:

The White House says participating drug manufacturers will provide supplemental rebates so the final Medicaid price for covered medicines does not exceed the most-favored-nation price. The list reaches into oncology, diabetes, asthma and other expensive categories that hit state budgets hard.

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The administration estimates $36.6 billion of the projected savings will go to the federal government and $27.6 billion to state governments. Because Washington and the states jointly finance Medicaid, both levels of government stand to benefit when the program pays less for the same medicine.

Those numbers matter, but the structure matters more.

For decades, Americans have watched drugmakers charge this country more while offering lower prices overseas. The political class treated that disparity like a permanent law of nature.

Trump treated it like a negotiation.

The new vehicle is called the GENEROUS Model, short for GENErating cost Reductions fOr U.S. Medicaid.

The Centers for Medicare and Medicaid Services reports that all 50 states, Washington, D.C., and Puerto Rico applied. Forty states and Puerto Rico have already signed participation agreements, and the remaining states have until September 30 to sign.

Under the five-year model, states invoice participating manufacturers for supplemental rebates that bring covered outpatient-drug costs down to international benchmarks. CMS will monitor pricing accuracy and share in the rebates by reducing the federal portion of Medicaid payments.

CMS Administrator Dr. Mehmet Oz explained one immediate result: one million free prescriptions of Eliquis, a widely used blood thinner, have already been delivered through the broader drug-pricing agreements.

The one-million-dose figure makes the policy easier to understand. A pricing agreement is only useful if it reaches a pharmacy counter, a state ledger or a patient who needs the medicine.

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Trump’s approach is built around leverage.

Drug companies that want access to the enormous American market are being pressed to stop making American patients and taxpayers carry a disproportionate share of global pharmaceutical costs.

The administration says it now has most-favored-nation agreements with 26 manufacturers covering 89 percent of the branded-drug market. That group includes Pfizer, Eli Lilly, Novo Nordisk, Merck, Johnson & Johnson, AbbVie, Gilead, Sanofi and other major companies.

Axios notes that the Medicaid arrangement includes hundreds of selected brand-name drugs and separates the projected savings into $27.6 billion for states and $36.6 billion for the federal government. It also reports that some outside analysts want more public detail because portions of the manufacturer agreements remain confidential.

The report places the announcement inside Trump’s broader series of agreements with more than two dozen large and midsize drugmakers. Those deals combine Medicaid price concessions with commitments to peg future American launch prices to prices available abroad.

That is a fair point to watch. Savings projections are not cash until claims are processed, rebates are paid and state budgets reflect the lower net costs.

But the skepticism does not erase what has already happened.

Every state has stepped into the process. Forty states and Puerto Rico have signed.

Manufacturers covering nearly nine-tenths of the branded market have agreements with the administration. A million Eliquis prescriptions have already been supplied without charge.

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That is more than a press release.

It is also part of a much larger campaign.

Trump signed his most-favored-nation executive order in May 2025, sent demands to 17 leading manufacturers that July and announced the first company agreement with Pfizer in September 2025. TrumpRx launched in February 2026 to offer direct consumer discounts.

The White House says patients have saved more than $700 million through TrumpRx since launch. It also says 600,000 seniors saved a combined $216 million during the first two months of a $50-per-month GLP-1 access program.

The programs use different channels to reach patients and taxpayers. Each reflects the same governing theory: use the size of the American market to demand a better price for Americans.

Trump put the projected Medicaid savings in plain terms Friday:

The administration says state governments could use their share of the savings for health care, education, infrastructure or other priorities. Governors and legislators will decide those budgets, but they cannot redirect money that was never saved.

The federal government should now publish clear scorecards showing which manufacturers, drugs and states are producing the promised results. Transparency will make a strong policy stronger and prevent bureaucrats or drug companies from hiding weak performance.

Still, the political contrast is already sharp.

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Washington spent years telling Americans that lower foreign prices were too complicated to touch. President Trump negotiated with the manufacturers, built a model states could join and got every state through the door.

If the projected savings hold, taxpayers will keep $64.3 billion that otherwise would have gone into inflated drug costs.

And if the model works as designed, the real legacy will not be the acronym.

It will be that Americans finally stopped paying the world’s highest price simply because Washington had never forced anyone to change it.

 

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