The Trump administration's GENEROUS Model creates incentives for pharmaceutical manufacturers to offer Medicaid programs drug prices comparable to what other wealthy countries pay. This study estimates how much each state could save if these "Most-Favored-Nation" prices replaced existing Medicaid drug rebates. Published as a research letter in JAMA, the analysis covers 82 high-spending brand-name drugs across all 50 states and the District of Columbia.

Why This Matters

Medicaid already pays some of the lowest net drug prices in the country, but prices in other high-income nations are often lower still. The GENEROUS Model is the first federal initiative to tie Medicaid drug prices to international benchmarks. State policymakers, Medicaid directors, and federal officials need independent estimates of how much this model could save and where the savings would be largest to evaluate whether the model delivers on its promise.

What We Found

Most-Favored-Nation pricing would generate an estimated $8.6 billion in annual Medicaid savings across 47 states and DC. That represents about 35 percent of net Medicaid spending on the drugs in the study. Savings would vary widely by state. States with little or no existing supplemental rebates, such as Alaska, Hawaii, Massachusetts, and Rhode Island, would see the largest percentage reductions (59 to 66 percent of net drug spending). States that already negotiate substantial rebates would gain less. Three states — Oklahoma, Mississippi, and North Dakota — already negotiate supplemental rebates that exceed what the model would offer, so they would not benefit.

Other key findings:

• About 90 percent of the drugs studied had lower prices in reference countries than net Medicaid prices (after basic and inflation rebates but before state supplemental rebates).
• The 17 pharmaceutical companies that have signed agreements with the administration account for 88 percent of Medicaid spending on these drugs and 94 percent of estimated savings. This means the vast majority of estimated savings could be realized even if the remaining manufacturers do not participate.
• Achieving equivalent savings in Medicaid without the GENEROUS Model would require Congress to raise the statutory Medicaid rebate from 23.1 percent to about 49 percent.
• For each drug a state opts into the model for, the new rebate replaces any existing supplemental rebate the state had negotiated. But states can choose drug by drug: they can keep their existing rebate for drugs where they already get a better deal and use the model only where it offers more. Our estimates assume states give up all existing supplemental rebates, so actual savings could be higher.

How We Did It

We used CMS drug utilization data from July 2024 through June 2025 and focused on brand-name drugs with at least $100 million in annual Medicaid spending that were approved in both the US and at least one reference country. We estimated current Medicaid rebates (basic and inflation-linked) using previously published methods and compared net Medicaid prices with international prices from eight countries, adjusted for differences in national income. Full methodological details are available in the supplemental appendix.