Drug Pricing Reform

CMS is moving drug pricing reform deeper into value-based payment infrastructure: the Trump administration’s GENEROUS Medicaid model is drawing enough manufacturer interest that CMS extended application timelines, but KFF cautions that its budget impact will depend heavily on confidential rebate terms, state participation, and interaction with already-large Medicaid rebate offsets (KFF analysis). At the same time, Medicare VBC stakeholders face growing pressure to manage specialty-drug spend through biosimilar adoption and formulary/channel strategy, with provider performance in Medicare value-based models increasingly tied to whether organizations can shift prescribing behavior without compromising quality or patient access (AJMC). For ACOs, Medicaid managed care plans, and risk-bearing providers, the strategic issue is no longer just pharmacy benefit design—it is whether drug-cost levers such as supplemental rebates, biosimilars, and potential GLP-1 coverage expansion can be operationalized inside total-cost-of-care contracts.