Trump Extends “Most‑Favored‑Nation” Drug‑Price Deals to Every State Medicaid Program

In a ceremony that felt part rally, part policy rollout, President Donald Trump stepped into the Oval Office on Friday and declared a new chapter for Medicaid drug costs. He said the “most‑favored‑nation” (MFN) pricing arrangements he brokered with a slew of pharmaceutical companies will now be handed down to state Medicaid programs from coast to coast, including Washington, D.C., and Puerto Rico.

“Thank you all for being here as we take historic action to extend the benefits of our most‑favored‑nation agreements on prescription‑drug prices to state Medicaid programs across the country,” Trump told a crowd of reporters, cabinet members, and a few familiar faces from his health‑care task force. He then added, almost as an afterthought, that the move would "save states billions and billions of dollars per year on drugs and let them invest those savings in better health care and higher‑quality service for the American people."

Under the so‑called GENEROUS Medicaid Payment Model, each state’s Medicaid agency will receive rebates directly from the drug makers. The idea, according to the White House, is simple: the final price a state pays for a brand‑name medication can’t rise above the MFN floor already locked in for the federal government.

Since late September 2025, the Trump administration has inked deals with 26 pharmaceutical firms—including big names like AstraZeneca, Eli Lilly, Novo Nordisk, Merck, and Gilead Sciences—to slash the list prices of high‑cost drugs. The list reads like a Who’s Who of the industry: Alcon, Astellas Pharma, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, GSK, Novartis, Regeneron, Sanofi, Johnson & Johnson, AbbVie, Teva, and several others.

“The Council of Economic Advisers estimates that the MFN deals we’re extending today will save Medicaid more than $64 billion in a relatively short period,” Trump said, his voice rising a notch. “I think the savings could reach $100 billion if we stay the course.” He went on to suggest that those extra billions could be redirected toward other health‑care improvements—or, he hinted, any number of state priorities.

Dr. Mehmet Oz, the Administrator of the Centers for Medicare and Medicaid Services, chimed in, “We are rescuing state budgets with this program, Mr. President.” He stressed that the plan isn’t a partisan perk; even states led by Democratic governors have signed on, eager to tap the newly promised rebates.

“It’s such a good deal that every state realized they need to take it,” Oz added, smiling at reporters.

Critics, of course, will ask how long the rebates will last, whether they’ll apply to all drug categories, and what oversight mechanisms will ensure the promised savings actually reach state coffers. The administration says the details are baked into the contracts, and that compliance audits will be conducted annually.

For now, though, the headline is clear: a federal‑level price cap is being projected onto the state Medicaid landscape, and the numbers being tossed around—$64 billion, maybe $100 billion—are enough to get heads turning in every capital from Albany to Sacramento.