On Nov. 7, the Centers for Medicare & Medicaid Services (CMS) Innovation Center announced a voluntary Medicaid most favored nation (MFN) drug model set to begin on Jan. 1, 2026, and run for five years. Through the Generating Cost Reductions for U.S. Medicaid (GENEROUS) model, drug manufacturers agreeing to participate will provide discounted MFN pricing on brand-name outpatient drugs covered through the Medicaid Drug Rebate Program to states via supplemental Medicaid rebates. Drugs covered by the Innovation Center’s Cell and Gene Therapy Access model would be excluded from the GENEROUS model. The CMS will set the target price for covered outpatient drugs using drug manufacturer-submitted international pricing data from eight countries: the United Kingdom, France, Italy, Germany, Canada, Japan, Switzerland, and Denmark. The MFN price will be based on the second-lowest net price reported for the drug in these countries, adjusted by gross domestic product per capita. The agency stated that the prices offered through the model will be excluded from Medicaid best price calculations and therefore not affect calculation of 340B program ceiling prices.
The CMS issued a request for applications (PDF) from drug manufacturers to participate in the model, with a deadline of March 31, 2026, to apply and June 30 to sign a participation agreement. Supplemental rebates would be retroactive to Jan. 1. The agency will seek letters of intent from state Medicaid agencies interested in joining the model and will open a request for applications for states this December.
- Washington Highlights