| States are getting MFN-curious. At least 19 states have applied to participate in a Trump administration pilot program that gives them access to drugs at prices similar to other wealthy nations, called most-favored-nation (MFN) pricing, according to health officials in those states. But that doesn’t mean they’re all in on the experiment. The details, which have not been previously reported and were unearthed with a big assist from my WP Intelligence colleague Nour Wood, represent an attempt to get more clarity about sentiment for the experimental pricing model, called GENEROUS, from all 50 states. And, so far, the overwhelming response has been: Why not? That’s because, as we’ve learned, there’s no harm in applying. After expressing interest, states get more detailed information from the Centers for Medicare and Medicaid Services — which is running the pilot — and then they can decide whether to officially sign an agreement to join in. States had until last Thursday to apply. → So far, seven states told us that they are actually participating in the pilot program: Alaska, Arkansas, Colorado, Indiana, Massachusetts, Oregon and Pennsylvania. Missouri said it “plans to join” the model, and it’s currently working through how the MFN prices compare to “bring better value” to the state. A MassHealth spokesperson said that Massachusetts is “fully leveraging this model to lower prescription drug spending.” But the details behind those deals remain elusive. Multiple states said that participation in the model includes a confidentiality agreement, so it’s unclear exactly how widespread the savings could be. Why it matters: The massive open question since the (voluntary) GENEROUS model was announced has been whether it would actually save states money. The initiative has been a major part of President Donald Trump’s affordability push and an attempt to tackle increasing drug prices. A large share of Americans have said they worry about being able to pay for their medications. Zoom out: Medicaid already gets substantial discounts on prescription drugs through federal and state rebates. According to KFF, those rebates reduced gross Medicaid drug spending by an average of 53 percent from 2019 through 2024. In addition to the federal rebates that are required by law, most states negotiate directly with manufacturers for supplemental rebates for medications in the Medicaid program. KFF found that states could be expanding those negotiations as a way of fighting higher drug prices. However, a study published in JAMA in July found that international prices were cheaper for 82 brand-name drugs that represent a large portion of Medicaid spending. The analysis showed that the GENEROUS model could mean billions of dollars in total savings across 47 states and Washington, D.C. — although the amount saved by each state (and the District) varies. THE WHIP COUNT Some states are banking on the MFN pricing model to give them a better deal on some drugs — and improve their overall Medicaid savings. “Participation allows us to explore how these negotiated rates could improve the financial sustainability of our Medicaid program while maintaining beneficiary access to life-saving medications,” Shirley Sakaye, director of communications for the Alaska Department of Health, said in an emailed statement. The breakdown: Nineteen states responded that they applied to GENEROUS, which affords them specifics on the pricing for particular drugs. California said last week it planned to submit a nonbinding application to evaluate any savings. Two more states hadn’t committed to joining the model and were evaluating or awaiting more detail, but also didn’t confirm that they’d applied. And seven said they have signed or executed participation agreements. (The rest didn’t respond or declined to comment.) “We are confident that this will ultimately save money,” wrote Gavin Lesnick, chief of communications at the Arkansas Department of Human Services, in an emailed statement. “While it’s too early to know any specific projections, we look forward to continuing our work in this area and reducing Medicaid spending on certain prescription drugs included in the model.” The overview: States can choose which drugs they want to access at MFN prices in the GENEROUS model. In exchange, they must adopt coverage and utilization management terms negotiated by CMS and drugmakers, and they cannot receive additional state-negotiated supplemental rebates on those drugs. However, states can stick with existing Medicaid rebate agreements they’ve hammered out with drugmakers when those deals offer a better price. “As part of Oregon’s ongoing efforts to lower drug costs for Medicaid, the GENEROUS model offers the state a new opportunity to review and consider confidential manufacturer offers for individual drugs, compare available options, and identify potential savings,” said Kristen Lambert, communications officer for the Oregon Health Authority, in a statement. What to watch: CMS tells me that it will be announcing the overall participation from drugmakers “soon.” States have until Sept. 30 to finalize their participation agreements to officially join the GENEROUS model. → Gilead, Novo, Eli Lilly, Johnson & Johnson and AbbVie have “the highest exposure to potential Medicaid MFN headwinds starting in the fourth quarter of 2026,” according to a recent Gordon Haskett analysis. The Paragon Health Institute is out today with a report examining the law meant to protect patients against surprise medical bills, called the No Surprises Act, and adds more fuel to calls for changes to it. The report, shared first with me, details several pitfalls with the current arbitration system, which is meant to handle disputes between providers and insurers over out-of-network bills. Its ultimate fixes include scaling back the federal arbitration system, reworking the payment rules, and building more transparency and accountability into the system. Why it matters: Paragon is an influential organization among Republicans in Congress and within the Trump administration seeking reforms to the health care system. The group was founded by Brian Blase, who served as a White House health care adviser during Trump’s first term, and it has alums currently serving as Capitol Hill and administration staffers. → An underlying point in the report is how providers have strong incentives to keep using arbitration when it can produce payments far above typical in-network rates. Seven of the 15 independent dispute-resolution firms handled about 76 percent of disputes decided under the federal system in 2025. Those firms sided with providers 82 percent to 98 percent of the time. More than half of all disputes were decided by firms where providers won more than 88 percent of the time, according to the report. The finding fits with a recent analysis from Georgetown University that also found that the arbitration companies that side with providers more often also award them higher payment amounts. What’s even newer: Insurers have apparently been unable to fix their win-rate issue by offering more money, according to Paragon’s findings. Provider win rates remained low even when insurers offered 600 percent or more of the qualifying payment amount, or QPA, that’s meant to represent the average in-network payment rate. At the same time, insurer median offers stayed near the QPA, though provider offers and arbitration awards climbed. What CMS is saying: CMS tells me that it’s preparing to launch a program that will audit the arbitrators, all while continuing to review “data, complaints and stakeholder feedback for potential noncompliance or other issues affecting the process’s operation and integrity.” Paragon’s recommendations: - Shrink the system by eliminating federal arbitration for elective care and narrowing its use for emergencies (while also requiring that patients receive better information about expected costs before elective care)
- Change the payment rules by updating the QPA using current median in-network rates (pulled from Transparency in Coverage data) and putting a cap on arbitration awards
- Implement some accountability by establishing penalties for insurers that fail to pay awards, and by restructuring arbitration fees to discourage ineligible or excessive filings
- Increase transparency by requiring written explanations for decisions and publishing individual arbitrators’ decision rates and awards
→ The analysis comes days after a set of reports from left-leaning patient group Families USA that also calls on lawmakers to revamp the federal arbitrations system. What doctors are saying: While insurers have charged physicians with gaming the system to extract much higher payments, doctor groups and their allies have argued that the QPA isn’t an accurate reflection of how much they’re reimbursed for services. They say that this results in award amounts that appear far above the in-network rates. → A federal court recently agreed, and has tasked regulators with going back to the drawing board to reformulate how the QPA is calculated. Physician groups have also complained that the law needs more robust enforcement, alleging that insurers are often slow to pay what they owe — or resist paying at all. (The latter issue has become one of the latest pieces of litigation testing the bounds of the No Surprises Act.) → HaloMD, a prolific middleman that helps providers handle claim disputes through arbitration, recently released its own study that found emergency medical spending has gone down after the No Surprises Act — and points out that most disputes are resolved without going to arbitration at all. “Pennsylvania woman dies of measles-related complications, local coroner says,” reports The Post’s Rachel Roubein. “The GOP’s $50 billion rural health fund is coming up short, hospital leaders say,” Daniel Payne reports at STAT. “Abortion opponents claim ‘tremendous victory’ as EPA tests water for abortion pills,” Politico’s Miranda Willson, Alice Miranda Ollstein, Ariel Wittenberg report. “Heart Disease, a Historic Strength for Big Pharma, Becomes a Weakness,” reports David Wainer at the Wall Street Journal. “FTC points to Ohio hospital deal as antitrust win,” Kristen Smithberg reports at BenefitsPRO.
This newsletter is published by WP Intelligence, The Washington Post’s subscription service for professionals that provides business, policy and thought leaders with actionable insights. WP Intelligence operates independently from The Washington Post newsroom. Learn more about WP Intelligence. | 
