Overview
- CMS will negotiate prices with participating manufacturers, calculate rebates, and have states invoice supplemental rebates to align costs with selected international reference prices.
- The five-year model runs from January 2026 through December 2030, and states can apply on a rolling basis through August 31, 2026.
- States that opt in must adopt uniform, transparent coverage criteria for included drugs to ensure consistent patient access and provider predictability.
- CMS cited 2024 prescription drug spending of more than $100 billion gross and about $60 billion after rebates as the rationale for the initiative.
- Trade reporting says the model will focus on high-spend categories such as obesity and diabetes drugs using a most-favored-nation approach, with additional manufacturer commitments reported but not officially detailed.