When Widespread Agreement Broke Out

By ALDP Co-founders Michael Glassner and Jason Young

Sept. 22, 2026 – Spend any time watching American politics and you come away convinced that nothing gets agreed on anymore. Spend time on drug prices and you find something different.

Start with the diagnosis. President Trump says Americans pay too much for prescription drugs and shouldn’t be charged more than people in other wealthy countries. Senator Bernie Sanders has been saying a version of that for thirty years. They agree on the problem, they agree on the comparison, and they are not alone: it is one of the few things in American health care that polls well across every party and every age group.

Agreement on a diagnosis is common enough. Agreement on a specific treatment is rare. That’s what got our attention last week.

On Sept. 18, President Trump announced Medicaid programs across the country would have access to lower prices on hundreds of brand-name prescription drugs through GENEROUS, a voluntary program that ties Medicaid’s net price to what other wealthy countries pay for the same medicines. The administration has now reached broader Most Favored Nation agreements with 26 drug manufacturers covering about 90 percent of the branded U.S. market.

Here’s the part that stood out to us: every state applied, plus D.C. and Puerto Rico. No state declined to apply on principle. Forty states and Puerto Rico had already signed agreements when the announcement was made, with the rest working on a Sept. 30 deadline. Clearly, interest in – and the need for – potentially lower drug prices has transcended the usual party divisions.

At first look, the widespread agreement is surprising – but on second look, it really isn’t a mystery. A state’s Medicaid prescription drug bill is a big budget line item, and every governor must contend with it, especially when it forces tradeoffs on other priorities. Net Medicaid prescription drug spending topped $60 billion nationally in 2024, up roughly $10 billion in two years. In that way, Medicaid was always the likeliest place for this kind of agreement. As two old hands in politics and policy, we know most durable public policy gets built from common, overlapping interests, rather than shared conviction.

We should also be straight about the limits. Nonpartisan analysts have pointed out how little of these agreements is public – the discounts themselves, how they compare to what Medicaid already gets, what drug manufacturers received in return. Those are fair questions, and we come back to them below. But they’re about the details, not about whether Americans are paying too much. On that underlying question, the consensus is as real as it gets.

There is also an important baseline to keep in mind. Medicaid already receives substantial drug rebates. GENEROUS would add savings where its international benchmark would be a better deal than Medicaid already gets. For some medicines and some states, that opportunity may be substantial. For others, the existing deal may already be better. That’s why states get to choose drug by drug.

How much room is left on each medicine isn’t publicly knowable. Medicaid’s rebates are confidential, so there is no comprehensive public comparison of its net prices with what other wealthy countries pay. The administration’s savings estimate comes from its model, which assumes a substantial gap remains for many brand medicines. The choices states make will tell us more.

What the states actually signed up for

The price and potential savings pieces have been well covered. The other half – rules and access – hasn’t. For patients this second part may matter more.

For each medicine a state selects at the lower price, the federal government has negotiated a standardized access policy with the manufacturer – for simplicity’s sake, we’ll call it “the rules.” States taking that price basically adopt those rules, with only limited variation allowed.

It’s a real trade, and each state made it knowingly. The GENEROUS program’s own documents list uniform rules as an advantage for drug manufacturers, which otherwise have to work through each state’s process one at a time. Whether uniform rules are also good for a patient depends on what they say and the state rules that apply today to that patient’s situation.

That makes GENEROUS more than a drug-pricing model. It is also a coverage-policy model: the lower price and the rules governing access come together.

If you’re covered by Medicaid, you may not know that the rules are where the action is. You usually pay just a few dollars at the counter, so the price of the medicine isn’t typically what stands between you and your prescription. A rule is. Four of them do most of the work:

The preferred drug list is the list of medicines your coverage will fill, often without extra steps. A good PDL is built by a committee of clinicians and pharmacists reviewing the scientific evidence, revisited regularly as that evidence changes, and paired with a working process for the patient whose case may need an exception to the rules. A list that sits untouched for years is a different thing.

Prior authorization means your prescription has to be approved before the pharmacy can fill it. If you’ve had job-based insurance, you’ve likely run into this. PA works the same way there, run by the insurance company or the benefit administrator rather than by your employer. Whether it’s a sensible check or an obstacle depends almost entirely on what the criteria say and how fast the answer comes back.

Step therapy means trying a different, often older medicine first, and having it not work, before you can get the one that was prescribed. When the first medicine genuinely works for most people and costs far less, that’s good practice and good stewardship. When it’s a hoop for its own sake, or when your doctor already knows from your history that it won’t work for you, it’s lost time.

Quantity limits can mean a 30-day supply when your doctor wrote for 90, so you’re back at the counter each month or more worried about your mail delivery.

We’d add something that doesn’t get said often enough in this conversation: the prescription itself isn’t beyond question. Prescribing is shaped by marketing, by habit, and by what a drug company’s representative brought to the office last month. Price rarely comes up in the exam room at all. A well-built review process can catch that, and a patient can end up with a medicine that works as well for less. What patients need isn’t the absence of rules. It’s rules they can see, that are grounded in evidence, and that bend when a particular person’s treatment genuinely needs to be different.

States have traditionally had the major responsibility for writing these rules themselves – for good reason. Each state answers for its own Medicaid budget and its own enrollees, and states learn from one another. A state that gets a class of medicines right often becomes the example others follow. The tradeoff is that the same medicine can come with different rules in neighboring states, and a family that moves may have to start over.

Where the new rules came from

The national rules weren’t invented from scratch. How they were built tells you what to expect.

When drug manufacturers applied to GENEROUS, the federal government’s Centers for Medicare and Medicaid Services (CMS) asked each one to list every version of the coverage rules states currently use for each of its medicines, and how many states use each version. The manufacturers then proposed a single set of national rules based on what they’d already worked out with the states. The federal government negotiated from there, with input from states.

So existing state practice was the starting point. The final national rule may be more generous than what some states use today and more restrictive than what others use. That’s the trade in practice. And once the terms are available, it will be knowable medicine by medicine by anyone who compares them with the rules states use today.

There’s a sensible feature built in, too: the rules can be revisited when a medicine’s approved uses change or when new clinical evidence comes in. That’s how coverage rules should work.

The program says it wants to put more medicines on those preferred lists, or cut back the hurdles in front of them. If that happens, patients should have more medicines to choose from, an easier time staying on the ones that work for them, and better access to newer medicines when they work better. The rules also have to apply the same way whether you’re in traditional Medicaid or a Medicaid managed care plan, so your access doesn’t depend on which plan you were assigned.

What to watch

You’ll see a lot of counting in the coming months: how many drug manufacturers signed up, how many medicines a given state picked, and so on. South Dakota, for instance, has identified three medicines so far and estimates they could save the state $750,000 a year.

We’d be careful about over-interpreting those numbers. A small number of medicines can account for an enormous share of what a state spends, and at this early stage we don’t know what drove a state’s particular selections. So “three” could mean very little or quite a lot.

Nationally, the five drugs with the highest gross Medicaid spending accounted for 10 percent of drug spending in 2024, and the top 50 accounted for more than a third. But spending isn’t the only consideration.

From a public policy perspective, the important questions are which medicines states choose, why they choose them, and how much better the new prices are than the deals they have today.

The short lists this year also have a plain explanation that has nothing to do with a state’s level of enthusiasm. States’ procurements are often on annual contracts, many of them through multi-state purchasing groups, and a state already locked into this year’s agreements can’t necessarily tear them up in the middle of the year, even for a better price. The program was designed with enough flexibility for states to make those judgments drug by drug rather than forcing a one-size-fits-all answer. We’re taking the long view and will be watching what choices states make as the program takes hold.

Here’s a part that’s actionable. Every state that keeps a preferred drug list has a process for deciding what goes on it and what rules apply, often involving a pharmacy and therapeutics committee or drug review board. Many states publish meeting materials and take public comment. If your state uses a single drug list for everyone on Medicaid, that process is one place to watch for changes. Your state Medicaid agency can also tell you where its current coverage criteria are posted.

The part that can’t stay hidden

Much of the news reporting on these agreements has focused on what isn’t public (e.g., the discounts, the specific terms each manufacturer agreed to, the arithmetic behind the savings estimates). That criticism is fair, and we’d be glad to see more disclosure there.

But we see the access half of this deal differently. A price can remain confidential indefinitely. A coverage rule is different: it has to reach a pharmacist deciding whether to fill a prescription, a doctor deciding what to document, and a health plan loading criteria into its system. The rules have to become visible in practice.

Which is why publishing the rulebook now or very soon is crucial. It exists, and states have already seen it: the program allowed states to review the terms before committing. Issuing it would let a mother in Pennsylvania know what January could look like – and it would let clinicians and patient groups read the criteria and say whether they’re sound, which nobody can do from the outside today.

Two things we’d ask alongside it. First, when the standard criteria don’t fit a particular patient, what’s the path, and how fast does it produce an answer? Every one of these tools rests on that path working. Second, the program’s terms let states change the national rules only where their own laws require it. States are accountable for their Medicaid programs, and many have worked hard to get their rules right. We’d ask that a state whose rules are more generous to patients be able to keep them. A national standard should raise the floor, not lower a ceiling a state has already built.

The administration isn’t the only party to watch. The manufacturers wrote the first draft of these coverage rules, they report their own international prices to the government, and their participation in this program renews one year at a time. So we’ll be watching them, too: whether the rules they proposed make it easier or harder for patients to get their medicines, whether the prices they report hold up when the government checks them, and whether they keep offering these terms at each renewal. Some have also said they may hold off launching new medicines in other wealthy countries rather than let lower prices there set the benchmark here. That’s worth watching closely.

The administration has also committed to tracking what happens next: changes to drug lists and coverage rules, whether patients can get their prescriptions and refills, whether people stay on their medicines, whether emergency room visits and hospital admissions go down. That’s the right list. Reporting it publicly, state by state and drug by drug, on a regular schedule, would let everyone evaluate how well GENEROUS is working.

The first useful report card on GENEROUS won’t be a count of manufacturers or medicines. It will be what states actually pay, whether patients face fewer or greater hurdles getting their prescriptions, and what happens to their care.

Agreement this broad doesn’t come along often in health care. We’ll be following what this does for patients and reporting what we find. If you’re on Medicaid and something changes at your pharmacy counter in the coming months, we’d like to hear from you.