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The Centers for Medicare and Medicaid Innovation has released a pilot model designed to lower prescription drug spending in Medicaid.
The voluntary model for states, called GENErating cost Reductions fOr U.S. Medicaid (GENEROUS), allows state Medicaid programs to purchase drugs named in the pilot at prices that are the same as those paid in other countries. CMS will be negotiating prices with participating drug manufacturers.
This offers more competitive pricing, according to the Centers for Medicare and Medicaid Services.
WHY THIS MATTERS
The model launches in 2026. States adopting the model would implement uniform, transparent coverage criteria for consistent standards to give patients and providers predictable access across participating states, CMS said.
CMS is releasing a Request for Applications (RFA) for drug manufacturers interested in participating in the GENEROUS Model.
The agency is also seeking letters of intent from state Medicaid agencies. States that express interest will later have the opportunity to formally apply. They would potentially opt in to the terms and prices CMS negotiates with participating drug manufacturers.
THE LARGER TREND
Total gross Medicaid spending on prescription drugs exceeded $100 billion in 2024, a $10 billion increase from 2022.
After collecting manufacturer rebates, net Medicaid drug spending was still $60 billion.
This announcement follows agreements between the White House and pharmaceutical companies to lower drug prices for Americans to prices that other countries pay.
ON THE RECORD
“Drug prices in the U.S. remain far too high,” said CMS Innovation Center Director Abe Sutton. “GENEROUS aims to ensure that Medicaid pricing will be on par with those in other developed nations. My hope is that all eligible Medicaid programs choose to participate in the pilot to help ensure that their Medicaid dollars can go further to support those in need.”
Email the writer: SMorse@himss.org