CMS Launches Voluntary Medicaid MFN Drug Pricing Model; Trump-Era Manufacturer Agreements Expand

On November 6, 2025, CMS introduced the voluntary GENERous payment model for Medicaid, which applies most favored nation (MFN) drug pricing.

This allows participating state Medicaid programs to buy drugs at prices aligned with select international markets. Set to launch in 2026, the five-year model enables CMS to negotiate prices with manufacturers, while enforcing uniform coverage criteria among adopting states. Manufacturers report international net unit prices to CMS and provide supplemental rebates billed quarterly by states against these prices.

Simultaneously, two additional U.S. pharmaceutical manufacturers entered confidential pricing agreements under the Trump administration, bringing the total to five. These agreements, linked to participation on the TrumpRx platform, have not disclosed detailed terms but are part of executive actions to manage drug costs amid ongoing congressional debate over legislated MFN pricing.

CMS also issued a Request for Applications to manufacturers for the GENERous model, with revisions issued shortly after. In parallel, FDA granted six new awards under the Commissioner’s National Priority Voucher program to manufacturers involved in pricing deals, potentially accelerating product review timelines and influencing market launch strategies.

The 2026 Physician Fee Schedule final rule published on November 5 includes updates related to the Inflation Reduction Act and Medicare, though the companion Hospital Outpatient Prospective Payment System rule is still pending. Separately, the Health Resources & Services Administration contractor disclosed implementation plans for eight manufacturers within the 340B drug rebate model amid ongoing litigation over 340B-related state laws.

State-level drug affordability initiatives continue to face legal challenges, typified by Colorado's Prescription Drug Affordability Board imposition of upper payment limits and ongoing litigation. Stakeholders note Virginia's PDAB law may gain traction under new legislative leadership. These federal and state developments collectively reflect an evolving landscape of drug pricing reforms affecting Medicaid and commercial payers, with implications for manufacturers, providers, and regulatory compliance.