A Look at the GENEROUS Model and Factors That Could Impact Medicaid Drug Costs Authors: Elizabeth Williams, Robin Rudowitz, and Rhiannon Euhus Published: May 8, 2026

https://www.kff.org/medicaid/a-look-at-the-generous-model-and-factors-that-could-impact-medicaid-drug-costs/?utm_campaign=KFF-Medicaid&utm_medium=email&_hsenc=p2ANqtz-__75syTs8ndhKALGOrlMAzBSzBniozao8F1imjgK3SJm6JYINZhPwJqj-OiRZ5zs4ZpN0TUGq8vmwPXDR16Y2VrGCXDw&_hsmi=417875364&utm_content=417875364&utm_source=hs_email KFF Examines Factors That Could Impact Medicaid Drug Costs Under the GENEROUS Model’s Most-Favored-Nation Pricing As part of efforts to reduce prescription drug costs, the Trump administration has negotiated “most-favored-nation” (MFN) deals with pharmaceutical companies that include providing MFN pricing in Medicaid, though details remain confidential. A new KFF issue brief provides background on the GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid), a drug payment model through which the Centers for Medicare & Medicaid Services will make MFN drug prices available to state Medicaid programs by negotiating supplemental drug rebates based on prices paid in other countries. Although the White House estimates that a voluntary MFN framework in Medicaid would save $64.3 billion over 10 years, it is unclear what assumptions underlie the estimate. Several uncertain factors remain that make it difficult to assess the impact the new model will have on Medicaid drug costs. Such factors include which drug manufacturers and states participate as well as what drugs are included in the model, due to variation in drug rebates (and net prices) as well as spending and utilization trends. While existing Medicaid rebates already reduce overall Medicaid spending substantially -- likely limiting the impact of the GENEROUS model – information on how those rebates vary by drug is not publicly available.Contact: Chris Lee | 202.654.1403 | ChrisL@kff.org