CMS Declares Voluntary Most-Favored-Nation Pricing in Medicaid Via the GENEROUS Model | Insights

On November 6, 2025, the Centers for Medicare & Medicaid Services (CMS) introduced a voluntary initiative referred to as the GENEROUS Model (GENErating value Reductions fOr U.S. Medicaid Model) to introduce the choice of so-called most-favored-nation (MFN) pricing to the Medicaid program. Under the Model, a drug producer could voluntarily supply supplemental rebates to collaborating state Medicaid packages for a producer’s coated outpatient medicine (CODs). The rebates are supposed to supply an MFN value to collaborating state Medicaid packages for a producer’s CODs. CMS is accepting producer purposes to take part within the Model till March 31, 2026.

MFN Pricing Data. Under the Model, collaborating producers will present CMS with MFN pricing information on the NDC-9 degree for every of their CODs. Specifically, producers will report the “average price for the NDC-9” for specified reference nations for the prior 12-month interval, “calculated net of all rebates, discounts and price concessions” and adjusted by every nation’s gross home product (GDP) based mostly on “purchasing power parity.” There are eight MFN reference nations recognized as a part of the GENEROUS Model: the six different G-7 nations excluding the United States (United Kingdom, France, Germany, Italy, Canada, Japan) plus Denmark and Switzerland.

GENEROUS Model Supplemental Rebate Calculations. CMS will calculate the quantity of the supplemental rebate owed to collaborating state Medicaid companies by taking the wholesale acquisition value (WAC) minus the sum of the Guaranteed Net Unit Price (GNUP) (which CMS says will likely be “determined based on the MFN price”) and the usual Unit Rebate Amount (URA). According to CMS, the GNUP method “is commonly used in the supplemental rebate agreements [(SRAs)] that are currently negotiated between states and manufacturers.” The RFA doesn’t present additional element as to how GNUP will likely be calculated for functions of the GENEROUS Model however does notice that “CMS can make allowances in the final GNUP price” to account for “certain unique manufacturer costs relating to the storage, handling, or distribution of the COD.”

CMS states that it plans to interact a contractor to assessment and audit all manufacturer-reported information, together with GNUP values. CMS additionally retains “the right to modify any [Model] policy” and “may modify the terms of the [Model] or cancel it entirely.”

Government Price Reporting. According to the “Frequently Asked Questions” part of the CMS webpage on the Model, the “supplemental rebates provided to states by manufacturers under [the Model] does [sic] not change Medicaid Best Price and therefore does [sic] not affect ceiling prices offered under the 340B Drug Discount Program.” CMS additional emphasizes that “[s]upplemental rebates do not affect the calculation of Medicaid Best Price.”

Broad Participation Requirements. To take part within the Model, a producer should “[p]rovide MFN pricing for their CODs with respect to all their associated labeler codes that are listed in the [Medicaid Drug Rebate Program].” The RFA additional stipulates that “Model drugs are limited to all the single source drugs or innovator multiple source drugs of a participating manufacturer, as described in 42 C.F.R. § 447.502.” State Medicaid companies will then “make an individual determination of whether they want to access the MFN prices of a participation manufacturer’s CODs.” Manufacturers should agree that “states are able to seek supplemental rebates outside the model for CODs for which the state is not accessing the MFN for the COD under the model.”

Cell and Gene Therapy Model Excluded. Importantly, CODs which might be included within the CMS Innovation Center’s Cell and Gene Therapy mannequin will not be eligible for the GENEROUS Model.

Confidentiality Considerations. CMS will likely be permitted to reveal any data {that a} producer “has already made public.” However, producers will have the ability to use a template to establish particular examples of knowledge the producer considers to be proprietary and confidential, and such data “shall remain the sole property of the manufacturer and, except as authorized by federal law, shall not be released by CMS without the express written consent of the manufacturer.”

Application Process. In reference to its announcement, CMS has revealed a Request for Applications (RFA) that features a template utility that producers should use to use for participation within the GENEROUS Model. The utility interval started on November 10, 2025, and producers should submit their accomplished utility and supporting paperwork by March 31, 2026.

CMS can even search letters of intent from state Medicaid companies which might be enthusiastic about collaborating. CMS acknowledged that it anticipates issuing an RFA for states in December 2025.

The mannequin is scheduled to start in January 2026 and run for 5 efficiency years, ending on December 31, 2030, although it’s unclear whether or not the Model can operationalize in time for a January 2026 begin. This could counsel CMS intends a lagged invoicing course of for supplemental rebates, no less than for the preliminary yr of this system.