The Centers for Medicare and Medicaid Services has announced a new plan that aims to lower drug prices for Medicaid patients across the country. The initiative is called the GENEROUS Model, and it is designed to help states buy certain prescription drugs at prices similar to what other developed countries pay. The goal is to give Americans fairer prices, expand access to needed medicines, and make Medicaid stronger for the future.
Government leaders say the model will help millions of people who rely on Medicaid for their health care. They explained that high drug prices strain families, states, and the federal budget, and that this new approach will help reduce costs while making important medicines easier to get.
Giving States a New Way to Save Money on Drugs
Medicaid spending on prescription drugs is rising quickly. In 2024, gross spending reached more than one hundred billion dollars, which was ten billion more than in 2022. Even after rebates from manufacturers, Medicaid still spent about sixty billion dollars on medications. CMS says this makes reform urgent.
Starting in 2026, the GENEROUS Model will let CMS negotiate lower drug prices with manufacturers. States that choose to join the model will follow a simple and consistent set of rules for covering the drugs included in the pilot. This will help patients and doctors know what to expect, no matter which participating state they live in.
Leaders Call the Model a Major Step Forward
Officials involved in the announcement said that the new model will help protect vulnerable Americans by making life-saving medicines more affordable. They also said that tying Medicaid drug prices to prices paid in other countries will keep the program fair and sustainable.
CMS Administrator Dr. Mehmet Oz said the model will help states pay a fair price for prescription drugs. He added that lowering drug prices is an important part of protecting the future of Medicaid and the people who rely on it. Abe Sutton, director of the CMS Innovation Center, said the new model aims to bring U.S. Medicaid prices closer to the levels seen in other developed nations.
Next Steps for Manufacturers and States
With the launch of this announcement, CMS is now accepting applications from drug manufacturers who want to take part in the GENEROUS Model. CMS is also inviting state Medicaid programs to share letters of intent if they may want to participate. Later, states will be able to formally apply and choose whether they want to adopt the prices and rules negotiated through the model.
This announcement follows earlier agreements between the White House and drug companies to bring down costs for Americans. CMS says the GENEROUS Model is another major move toward lowering drug prices, improving access to care, and protecting the Medicaid program for future generations.
Source : U.S. Centers for Medicare & Medicaid Services – https://www.cms.gov/
