• All 50 states, plus D.C. and Puerto Rico, have signed onto a voluntary Medicaid drug-pricing model that aims to secure lower prices benchmarked to countries like Canada.
  • The administration claims 26 drugmakers, covering 89% of the branded market, have agreed to pricing deals, but key contracts remain confidential.
  • Experts warn that without public terms, the actual savings for states and patients are impossible to verify.

Broad Participation, Murky Math

President Trump announced on September 18 that every U.S. state has agreed to participate in a Medicaid drug-pricing pilot program called GENEROUS, which seeks to apply “most-favored-nation” pricing to certain prescription medicines. The voluntary model aims to peg U.S. prices to those paid in other high-income countries, including Canada, where drug costs are often significantly lower.

The announcement marks a significant expansion of the administration’s push to reshape pharmaceutical pricing. According to the White House, 26 manufacturers—representing about 89% of the branded-drug market—have already reached pricing agreements under the broader initiative. The deals pair price concessions with commitments such as domestic manufacturing investments and availability through direct-to-patient channels like TrumpRx.gov.

But the headline claim that U.S. pricing would be “substantially less” than what the government pays in Canada goes beyond the typical policy framework. The formal model generally seeks to align prices with the lowest or near-lowest among a group of wealthy nations, not to guarantee universal undercutting.

Companies Sign On, Terms Stay Secret

Major drugmakers have signed on, including Pfizer (PFE), Novo Nordisk (NVO), Eli Lilly (LLY), Merck (MRK), and AstraZeneca (AZN). For some, the discounts are steep: Reuters reports that Pfizer has agreed to average discounts of about 50% on certain drugs through TrumpRx, with some products discounted by as much as 85%. Novo Nordisk’s Ozempic and Wegovy will be offered at $350 per month under the program, down from list prices of roughly $1,000 and $1,350.

In exchange, companies gain policy certainty and potential relief from prospective pharmaceutical tariffs. CSL, for example, committed to a $1.5 billion manufacturing investment in Illinois projected to create over 1,100 jobs.

The agreements, however, are not public. Health-policy experts say the lack of transparency makes it difficult to assess the administration’s projected billions in savings. “Without the details, Congress can’t evaluate what it would be codifying,” said Kathy Hempstead of the Robert Wood Johnson Foundation, according to the Associated Press.

Medicaid Patients May See Little Direct Relief

While the program could ease pressure on state and federal Medicaid budgets, its impact on patients’ out-of-pocket costs is likely limited. Medicaid enrollees already pay only nominal copays, so any savings would primarily accrue to government payers. States could redirect those funds to coverage or other health services.

The broader commercial market remains a wild card. For Americans with employer insurance or Medicare, drug prices depend on rebates, formularies, and pharmacy benefit managers—not just list prices. Whether discounted products become widely accessible through direct-pay channels is uncertain.

“Institutional investors are focused on regulatory stability,” said one industry executive, speaking on condition of anonymity. “But without seeing the contracts, it’s hard to price the risk.”

The administration did not respond to requests for comment on the confidential terms.

The policy builds on a decades-long debate over international reference pricing, which gained renewed momentum under Trump’s first term. Last year, an executive order directed a most-favored-nation approach, followed by deals with 17 large manufacturers and a late-August expansion involving nine more companies.

As states begin to operationalize the discounts through Medicaid managed-care organizations and pharmacy benefit systems, the key questions will be which medicines are covered, at what net prices, and whether companies meet their manufacturing and access commitments. Until then, the program remains a significant escalation in U.S. drug-pricing intervention—but not yet a proven price revolution.