CMMI MFN Demonstration Projects: Generous (Part 2)
CMMI has initiated three demo projects:
Generous for Medicaid drugs
Globe for Medicare Part B drugs
Guard for Medicare Part D drugs.
As currently proposed, the Generous CMMI demo is voluntary for manufacturers, while the currently proposed Globe and Guard programs are mandatory for designated demo products. The aim of Generous is to allow drug manufacturers to align Medicaid net drug prices with Most Favored Nation (MFN) rates for select products. The pricing benchmark is set at the second-lowest manufacturer reported net price from Canada, France, Germany, Italy, Japan, UK, Denmark, and Switzerland that is then adjusted by GDP. CMS and manufacturers negotiate specific Supplemental Rebate Agreements (SRA), with MFN prices remaining valid for at least twelve months after signing the SRA. Incremental rebates provided by pharma manufacturers are then excluded from the Medicaid Best Price calculation. States participating in the model can elect to participate on a product specific basis and would not be able to negotiate any further supplemental rebates for the selected product.
The Generous application period for manufacturers began on November 10, 2025, and concludes on March 31, 2026. Following the application process, CMS aims to execute agreements with selected manufacturers no later than June 30, 2026. The model is scheduled to run for five years from January 1, 2026 to December 31, 2030. Manufacturers who participate in Generous or who have signed separate MFN agreements with the Trump administration may be granted an exemption from Globe and Guard.
Manufacturer concerns regarding the Generous program include, but are not limited to:
Generous requires manufacturers to report country specific product net prices, and effectively redefines MFN not as the lowest visible list price in OECD countries, but as the second lowest country specific net price adjusted by GDP.
Generous fails to utilize per capita healthcare costs as the means of adjusting the second lowest net price and determining the final MFN.
The “standardized coverage” promised manufacturers does not guarantee that the coverage will be “unrestricted.”
The Generous guidelines say that State Medicaid programs will be developing a “pool of dollars” from the incremental manufacturer rebates. This pool of dollars can be “redirected to other uses”, with no oversight to ensure how these funds will be used or that patient OOP expenses will be lowered. Manufacturers should rightfully be concerned that this is yet another pharma discount program, like 340B, that doesn’t benefit the patient and for which middlemen, in this case State governments and CMS, can use to shift dollars to other programs that then become dependent upon this revenue source.
For a more in-depth discussion and recommended strategies in how Pharma companies should evaluate and respond to the CMMI MFN Demos, please contact either me or Rita.