Most-Favored-Nation Drug Pricing Arrives in Medicare Part B: CMS Finalizes GLOBE Model
The Centers for Medicare & Medicaid Services ("CMS") has finalized the Global Benchmark for Efficient Drug Pricing ("GLOBE") Model, which ties certain Medicare Part B drug inflation rebate calculations to drug prices in economically comparable countries.
On September 30, 2026, CMS released the final rule for the GLOBE Model, a mandatory Medicare payment model that tests an alternative methodology for calculating Part B drug inflation rebates for certain separately payable Part B drugs and biologicals.
Final Rule Key Highlights
- Duration: Five-year performance period beginning April 1, 2027.
- Covered Drugs: Single-source drugs and sole-source biologicals in one of seven therapeutic categories (Antigout Agents, Antineoplastics, Blood Products and Modifiers, Central Nervous System Agents, Immunological Agents, Metabolic Bone Disease Agents, and Ophthalmic Agents) with more than $100 million in annual Part B spending.
- Excluded Drugs: Drugs ineligible for an inflation rebate under the Part B Inflation Rebate Program (e.g., 340B-covered drugs), drugs subject to a maximum fair price under the Medicare Drug Price Negotiation Program, orphan-only drugs, plasma-derived products, certain cell and gene therapies, and biosimilars and their reference products once a biosimilar launches.
- Mandatory Participants: All manufacturers of covered drugs, except those participating in another CMS Innovation Center model (e.g., GENEROUS) that waives participation in GLOBE.
- International Benchmark (subject to adjustment):
Method I. By default, CMS uses existing, commercially available international drug pricing data to set the benchmark at the lowest price for the drug among the reference countries. CMS sets this default benchmark when a covered drug enters the model and does not recalculate or adjust it.
Method II. Alternatively, manufacturers may choose to participate in voluntary reporting of nonpublic international net pricing data, such that CMS is able to calculate the average international price for a drug among the reference countries. If that average price benchmark is higher than the default benchmark calculated under Method I, CMS uses Method II's benchmark instead. Voluntary reporting for manufacturers begins January 1, 2027.
- Rebate: Each quarter, manufacturers owe the difference between Part B's current payment limit for the covered drug and the applicable international benchmark or the drug's existing Part B inflation rebate, if larger.
- Scope of Rebate: Applies to covered drugs furnished to original Medicare beneficiaries in randomly selected geographic areas, encompassing approximately 25% of total original Medicare beneficiaries.
