Overview
- Participation is voluntary, with CMS inviting manufacturers to apply and states to submit letters of intent before opting in to negotiated pricing terms.
- The five-year model runs from January 2026 through December 2030, and states can enroll on a rolling basis through August 31, 2026.
- CMS will negotiate prices with participating drugmakers, calculate rebates, and states will invoice supplemental rebates to align net costs with selected international prices.
- The program applies most-favored-nation pricing to drugs for obesity, diabetes, and related conditions, and includes manufacturer commitments such as repatriating profits, expanding U.S. manufacturing, and extending discounts across state Medicaid programs.
- Analysts question potential savings since Medicaid already secures large rebates, citing a 2021 CBO finding that Medicaid obtained the lowest prescription drug prices among federal programs.