President Donald Trump is set to announce on Friday the participation of all states in a Medicaid drug pricing model that follows deals struck with 17 major pharmaceutical companies over the past year.

The announcement builds on the president's push to get drug manufacturers to agree to lower prescription drug prices in the U.S. to price levels in other countries that typically pay less-a concept dubbed most favored nation, or MFN.

Full details of the agreements haven't been publicly released. The pricing provisions generally apply to future product launches, as well as to existing drugs purchased within the Medicaid program, the joint federal-state insurance program that covers people with lower income.

Drug companies had incentives to participate in the deals to stave off the threat of U.S. tariffs on their products. Wall Street generally reacted well to the MFN deals as they were released, starting with Pfizer in September 2025, as a cloud of uncertainty lifted.

The NYSE Arca Pharmaceutical Index was down about 0.50% in early afternoon trading, slightly lower than the broader market, which was down about 0.20%.

In a Friday morning client note, Mizuho's Jared Holz said the health of large-cap pharma companies "has improved markedly over the past 12-18 months, much of this due to drug pricing agreements and greater certainty around the political climate."

While these big players do face some financial pressure from MFN, as well as the implementation of the Medicare drug pricing provisions in the Biden-era Inflation Reduction Act, "the fact that the there is now more certainty regarding various politically driven tactics allows Companies to strategize and plan more effectively," Holz wrote.

News of today's Medicaid-focused announcement was reported earlier by Semafor and The Hill. A White House spokesperson confirmed to Barron's that all 50 states, D.C., and Puerto Rico will take part in the pricing model known as GENEROUS.

"A key component of the President's MFN deals was for drugmakers to provide drugs at MFN prices immediately to Medicaid, and today's announcement confirms that every state Medicaid program will save billions on prescription drug costs thanks to President Trump," the spokesperson said.