# CMS Launches GENEROUS Medicaid Drug Pricing Model

The Centers for Medicare & Medicaid Services (CMS) has launched the GENEROUS Model, a five-year Medicaid drug payment initiative aimed at lowering prescription drug costs to international prices. As of September 2026, all 50 states, the District of Columbia, and Puerto Rico have applied to participate, with 40 states and Puerto Rico having signed agreements. The program, which began in January 2026, is expected to save $64.3 billion over ten years while improving access to medications and quality of care for vulnerable populations. States have until September 30, 2026, to join the model and benefit from most-favored-nation pricing strategies. South Dakota, led by Governor Larry Rhoden, anticipates saving approximately $750,000 annually by opting into this initiative.

- **Why this matters:** Procurement professionals should note the widespread adoption of the GENEROUS Model as it signals significant shifts in Medicaid drug purchasing strategies toward international pricing benchmarks.
- States and healthcare providers will require updated contracting and compliance processes to align with the new pricing model, impacting pharmaceutical procurement and supply chain management.
- Vendors and contractors in the pharmaceutical and healthcare sectors should evaluate how this model affects pricing, reimbursement, and market access for Medicaid populations.
- Organizations involved in Medicaid drug procurement can leverage this initiative to optimize costs and improve care delivery while navigating new federal-state agreements and deadlines.

**Jurisdictions:** federal, sled
**Industries:** Healthcare
**Topics:** Regulatory Compliance
**Published:** September 19, 2026

### Government Entities
- Centers for Medicare & Medicaid Services (CMS)
- Department of Health and Human Services (HHS)
- State of South Dakota

### Key Quotes
> America shouldn’t pay higher drug prices than other developed nations. We can now confidently get the lowest cost for every prescription drug in our state. It is a game changer for health care affordability.
> — Larry Rhoden, Governor of South Dakota

> Medicaid programs will get the best possible price for drugs, delivering better value for taxpayers and freeing up funds to give vulnerable Americans the high-quality care they deserve.
> — Dr. Mehmet Oz, CMS Administrator

> Americans should pay the same low prices for prescription drugs that other countries pay.
> — Robert F. Kennedy, Jr., HHS Secretary

### Sources
- [News - President Trump and Governor Rhoden Lower Prescription Drug Prices](https://news.sd.gov/news?id=news_kb_article_view&sys_id=77a99bd71b9b4350f744edb5604bcb4e) - SD
- [CMS Announces Participants in Landmark Medicaid Drug Payment Model to Bring Down Drug Costs for Most Vulnerable Americans | CMS](https://www.cms.gov/newsroom/press-releases/cms-announces-participants-landmark-medicaid-drug-payment-model-bring-down-drug-costs-most) - CMS