Trump Extends Most‑Favored‑Nation Drug Pricing to Every State Medicaid Program

In a brief ceremony inside the Oval Office on Friday, President Donald Trump unveiled what he called a "historic" expansion of his most‑favored‑nation (MFN) drug‑pricing agreements. The plan, he said, will now stretch the low‑price guarantees he secured with big‑ticket pharmaceutical companies to every state Medicaid program, plus Washington, D.C., and Puerto Rico.

"Thank you for being here as we take historic action to officially extend the benefits of our most‑favored‑nation agreements on prescription drug prices to state Medicaid programs across the nation," Trump said, pausing to let the applause settle before continuing. "This will save states billions of dollars each year and let them invest those savings in better health care for the American people."

The White House explained that Medicaid agencies will receive rebates through what it calls the GENEROUS Medicaid Payment Model. In plain English, the rebates are designed to make sure that the final price a state pays for a brand‑name drug never exceeds the MFN price already negotiated with the drug maker.

Since late September 2025, the administration has struck MFN deals with 26 pharmaceutical giants—names like AstraZeneca, Eli Lilly, Novo Nordisk, Merck, and Gilead Sciences. The contracts cover a wide swath of high‑cost medicines, from diabetes treatments to oncology drugs.

According to the Council of Economic Advisers, the extension of these deals could shave more than $64 billion off Medicaid spending in the near term, and the president hinted that total savings might even top $100 billion. "Every state will now have the ability to use those extra billions of dollars to invest in other health‑care improvements," Trump added.

Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, backed the move, telling reporters, "We are rescuing state budgets with this program, Mr. President." He emphasized that the agreement is open to all states, regardless of which party controls their legislatures, and that "it’s such a good deal every state realized they need to take it."

Critics, however, remain skeptical about the long‑term impact and whether the rebates will truly translate into lower out‑of‑pocket costs for patients. Nonetheless, the administration is pressing ahead, promising to monitor the rollout and adjust the model if needed.

For now, state health officials are busy crunching numbers, trying to forecast how the incoming rebates will reshape their budgets and, ultimately, the care they can provide to millions of Medicaid beneficiaries.