On Sept. 30, President Trump welcomed Pfizer chief Albert Bourla to the White House to proclaim a new voluntary agreement aimed at lowering the price of prescription medicines for the Medicaid program. The announcement was framed as the first step in a series of “most-favored-nation” deals that would align U.S. drug costs with those paid by other wealthy nations. Yet, more than a year later, the initiative remains a patchwork of undisclosed contracts, selective drug discounts, and a state-by-state opt-in process that has slowed progress.
The September 30 announcement and its promises
During the Oval Office briefing, Trump declared, “We went from the highest prescription drug prices, by far, anywhere in the world, to the lowest prescription drug prices anywhere in the world” positioning the pact as a major victory for his administration’s second term. He added, “Today Pfizer is committing to offer all of their prescription medications to Medicaid” and promised that the prices would be set at “most favored nation” levels. The president emphasized the potential impact, saying, “And it will be at the most favored nation prices. It’s gonna have a huge impact on bringing Medicaid costs down like nothing else.” The White House later reported that a total of 26 pharmaceutical companies had signed similar agreements, though no public list of participants was released.
What the Medicaid pilot actually entails
The centerpiece of the plan, dubbed the Generous model is a voluntary pilot that requires both drug makers and individual states to opt in. Under the scheme, a company could choose to extend Medicaid discounts on a subset of its portfolio rather than on every product. This uncertainty is amplified by the fact that the Centers for Medicare and Medicaid Services declined to disclose how many drugs each firm will discount. As a result, the promised universal coverage of all Pfizer medicines – and those of the other 25 signatories – remains unverified.
Medicaid currently serves roughly 66 million Americans. Between 2019 and 2024, its net spending on prescription drugs rose 46 %, reaching an estimated $46 billion in the most recent year, according to the KFF health-policy analysis. The pilot was intended to blunt that surge, but the lack of a definitive drug list and the voluntary nature of participation have generated skepticism among policy observers.
Industry response and transparency gaps
When pressed for specifics, several major manufacturers gave only vague assurances. Gilead told reporters it is working with states to make “selected covered products available,” pointing to treatments for hepatitis C, hepatitis B, and HIV. Sanofi said it would extend discounted pricing to “certain wholly owned medicines that treat diabetes, cardiovascular and neurological conditions, and cancer.” Eli Lilly could not provide a final roster but expected “many” of its medicines to be included, excluding its GLP-1 drugs that belong to a separate Medicare pilot. Genentech limited its comment to “certain medicines” and two companies outright refused to discuss the terms, labeling them confidential.
Dr. Thomas Hwang of Brigham and Women’s Hospital expressed concern that the voluntary framework allows firms to cherry-pick products that already enjoy low Medicaid rebates, thereby inflating the appearance of savings. “Companies have every incentive to cherry-pick [for this program] the products for which they already give Medicaid the best discounts and for which the international price may not be that much lower,” he warned, adding that such gaming could undermine the original intent of the agreement.
State participation and fiscal considerations
Because each state must individually decide whether to join the Generous pilot, the rollout has been uneven. The deadline for state applications was Sept. 10, with a final signing window extending to Sept. 30. Massachusetts publicly announced its intent to opt in, while California signaled interest but requested additional details before committing. Ameet Sarpatwari, a Harvard professor of population medicine, described the repeated deadline extensions as a warning sign, noting that “everything in Medicaid is a trade-off” and that states must balance immediate budget constraints against long-term savings.
State Medicaid budgets are subject to annual balance-sheet requirements, unlike the federal share, which can absorb longer-term costs. Consequently, even if a discounted drug reduces This tension could make states reluctant to abandon their existing utilization-management tools—such as prior-authorization requirements or step-therapy protocols—in favor of a standardized pricing regime that might broaden access without guaranteeing budget neutrality.
In sum, the high-profile pledge made on Sept. 30 to deliver universal Medicaid drug discounts has morphed into a complex, largely opaque pilot. While the involvement of Pfizer and 25 other firms signals a willingness to engage, the selective nature of discounts, the secrecy surrounding contract terms, and the voluntary, state-by-state rollout all raise doubts about whether the initiative will achieve the sweeping cost reductions originally touted.
