Every state joins Medicaid drug pricing pact, White House confirms

President Trump announced that all 50 states, Washington, D.C., and Puerto Rico will take part in a new Medicaid drug pricing model. Under the plan, pharmaceutical companies must offer supplemental rebates so that Medicaid's net costs align with most favored nation pricing. The initiative aims to lower drug expenditures for the federal-state program.

The newly confirmed pact marks an unprecedented level of participation, with every state plus the District of Columbia and Puerto Rico agreeing to the Medicaid drug pricing model. Under this framework, pharmaceutical manufacturers would provide supplemental rebates, effectively tying Medicaid’s net spending to the most favored nation pricing benchmark—typically the lowest price offered in comparable developed countries. This approach is designed to reduce the federal-state program’s drug expenditures by leveraging collective purchasing power across all jurisdictions. The announcement signals a major shift in how Medicaid negotiates drug costs, moving away from separate state-level arrangements toward a unified national standard. While the exact rebate calculations and implementation timeline remain unspecified, the scope of participation suggests a coordinated effort to curb rising pharmaceutical spending within the public healthcare system.