CMS finalizes mandatory international pricing model for Part B drugs
CMS finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory rule that recalculates rebates for certain separately payable Medicare Part B drugs and biologics using prices paid in economically comparable countries. The model covers drugs typically administered in clinical settings for conditions like cancer, autoimmune disease and arthritis, applying to roughly 25% of Original Medicare beneficiaries in randomly selected geographic areas; it excludes biosimilars, orphan drugs and cell and gene therapies. CMS's performance period runs April 2027 through March 2032, and the agency now projects about $440 million in net Part B savings over the seven-year payment period, down sharply from the $8.4 billion it had projected when the rule was proposed.
Why it's notable: Hospitals and physician offices that administer infused or injected drugs now have a federal rule, not just a proposal, that ties part of their Medicare Part B drug reimbursement to international prices, adding a new variable to drug acquisition and billing planning. Hospital groups had pushed to make participation voluntary and warned that manufacturers could respond by raising the acquisition prices hospitals pay, so how drugmakers react will matter as much as the rule itself.
Update 2026-10-07: PhRMA sued the Department of Health and Human Services, HHS Secretary Robert F. Kennedy Jr. and CMS in the U.S. District Court for the District of Columbia, asking the court to declare the GLOBE Model unlawful and vacate it. The trade group argues CMS exceeded its demonstration authority by using a test model to impose nationwide price-setting that predetermines its outcome and bypasses Medicare's statutory rebate structure without congressional authorization. (U.S. News & World Report (AP), Pharmaceutical Commerce, STAT News)