Trump Administration Expands Most-Favored-Nation Drug Pricing Agreements

Key Takeaways

• The Trump Administration announced most-favored-nation (MFN) drug pricing agreements with 9 additional pharmaceutical manufacturers, bringing the total to 26 manufacturers.
• The agreements provide state Medicaid programs access to MFN pricing, with the voluntary Centers for Medicare & Medicaid Services (CMS) Generating Cost Reductions for US Medicaid (GENEROUS) Model offering a mechanism for supplemental rebates based on international prices.
• State participation and implementation will help determine the agreements’ ultimate impact on Medicaid drug spending, coverage policies, and patient access.

The Trump Administration announced agreements with 9 additional pharmaceutical manufacturers to provide MFN pricing on prescription drugs, expanding an initiative intended to align US drug prices more closely with prices paid in other developed countries.¹

The agreements involve Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals, and UCB. With the latest additions, 26 pharmaceutical manufacturers have reached MFN agreements with the administration, representing 89% of the branded drug market, according to the White House.¹

For Medicaid programs, the agreements could have particular implications as states consider participation in a federal model designed to translate international drug prices into lower Medicaid net costs.

New Agreements Broaden MFN Drug Pricing

Under the agreements announced August 31, the 9 manufacturers will provide state Medicaid programs access to MFN pricing for their products. The affected drugs include treatments for hemophilia, Parkinson disease, macular degeneration, glaucoma, liver disease, skin conditions, and several forms of cancer. The manufacturers also agreed to provide MFN pricing on new medicines brought to the US market.¹

According to STAT, the 9 companies made commitments similar to those reached previously between the administration and larger pharmaceutical manufacturers, including offering drugs to state Medicaid programs at MFN prices and pricing new medicines for US patients at levels comparable to the lowest prices available in peer countries.²

However, details surrounding some aspects of the agreements remain unclear. STAT reported that the full terms of the arrangements have not been publicly disclosed.²

GENEROUS Model Connects MFN Pricing to Medicaid

The agreements intersect with the CMS GENEROUS Model, a voluntary 5-year model launched in January 2026.³

Under GENEROUS, participating manufacturers provide supplemental rebates to participating state Medicaid programs, with the goal of aligning Medicaid net drug prices with prices paid in selected other countries. CMS negotiates with manufacturers on pricing and standardized coverage criteria for drugs included in the model.³

Manufacturers accepted into the model enter agreements with CMS establishing pricing for their portfolios of covered outpatient drugs. Participating states then invoice manufacturers for supplemental rebates designed to effectuate the international prices.³

CMS has said that supplemental rebates provided through GENEROUS will not change Medicaid Best Price and therefore will not affect ceiling prices under the 340B Drug Discount Program.³

Participation is voluntary for both manufacturers and states. All states and US territories participating in the Medicaid Drug Rebate Program are eligible to apply, provided they receive the necessary CMS authorization. Participating states must also align applicable coverage policies with Medicaid managed care organizations.³

States have until September 10, 2026, to apply to participate in the model.³

Medicaid Drug Spending Remains a Focus

CMS developed GENEROUS amid continued growth in Medicaid prescription drug spending. Net Medicaid spending on prescription drugs exceeded $60 billion in 2024, representing a $10 billion increase from 2022.³

States already receive statutory manufacturer rebates through the Medicaid Drug Rebate Program, and many negotiate additional supplemental rebates. GENEROUS is intended to build on those mechanisms by giving participating states access to prices based on international benchmarks.³

In exchange for lower prices, CMS and manufacturers negotiate standardized coverage criteria for drugs participating in the model. CMS has said this approach could reduce manufacturers' need to negotiate separate coverage criteria with individual states while potentially increasing access to medications.³

For Medicaid managed care organizations, implementation could require coordination with state Medicaid agencies as participating states align their coverage policies with the terms negotiated through the model.³

What Comes Next

The latest agreements expand the number of manufacturers participating in the administration’s broader MFN pricing strategy. The White House said the 26 manufacturers with agreements now account for 89% of the branded drug market.¹

The 9 manufacturers also committed to collectively invest at least $19.6 billion in US manufacturing. Several—including UCB, Sun Pharma, Teva, and Astellas—agreed to contribute active pharmaceutical ingredients to the Strategic Active Pharmaceutical Ingredients Reserve.¹

For Medicaid programs and managed care organizations, the immediate next step will be determining how broadly states participate in GENEROUS and how the negotiated pricing and standardized coverage criteria are implemented. Because participation remains voluntary, the ultimate effect on Medicaid drug spending and access will depend in part on manufacturer and state participation as the model moves forward.³

Bottom Line

The Trump Administration’s latest agreements extend MFN pricing commitments to 9 additional pharmaceutical manufacturers and could broaden the reach of internationally benchmarked drug prices within Medicaid. For state Medicaid agencies and managed care plans, the GENEROUS Model provides the mechanism for translating those commitments into supplemental rebates and standardized coverage policies, making state participation and implementation key factors to watch.

References

1. The White House. Fact sheet: President Donald J. Trump announces deal with nine additional pharmaceutical manufacturers to lower drug prices for Americans. Published August 31, 2026. Accessed September 3, 2026. https://www.whitehouse.gov/fact-sheets/2026/08/fact-sheet-president-donald-j-trump-announces-deal-with-nine-additional-pharmaceutical-manufacturers-to-lower-drug-prices-for-americans/
2. Payne D, Chen E. Trump strikes nine more deals with drugmakers to lower prices. STAT. Published August 31, 2026. Accessed September 3, 2026. https://www.statnews.com/2026/08/31/trump-most-favored-nation-drug-pricing-new-round-price-cuts-announced/
3. Centers for Medicare & Medicaid Services. GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model. Update July 1, 2026. Accessed September 3, 2026. https://www.cms.gov/priorities/innovation/innovation-models/generous