📢 New clarity on most favored nation pricing in the U.S.: introducing the new GENEROUS model to define the MFN price.

After a long period of uncertainty, the Trump administration has provided clearer guidance on how international reference pricing (IRP) will be implemented to define the Most Favored Nation price. The information is based on the new GENEROUS model (“GENErating cost Reductions fOr U.S. Medicaid”) – a five-year pilot program starting January 1, 2026.

💡 The GENEROUS Model:

The model applies to Covered Outpatient Drugs (CODs) that fulfill certain criteria, having obtained FDA (Food and Drug Administration) approval, and are being used in the outpatient sector.

🎯 Its goal: reducing costs of pharmaceuticals for outpatient care in Medicaid, Medicare, and for self-payers by aligning U.S. net wholesale prices in comparison to prices in international reference countries.  

🌍 The international reference basket:

An international basket of eight reference countries is the integral part of the model and is set for the next five years: Canada, Denmark, France, Germany, Italy, Japan, Switzerland, United Kingdom.

📊 Identification of prices relevant for the GENEROUS model:

 Manufacturers must report the international manufacturer net prices at NDC-9 level for each participating reference country, for each dosage form, strength, and route of administration. The prices have to be submitted annually by September 30th of the following year and are goint to be audited externally. The prices refer to a rolling average net price of the last 12 months, not the latest net price.

💵 The MFN benchmark:

It is the second lowest country-specific manufacturer net price, adjusted for GDP per capita using purchasing power parity (PPP).

Furthermore, manufacturers will have to reimburse the difference between the U.S. Wholesale Acquisition Cost (WAC) and the given MFN price as well as additional legal required discounts.