CMS finalizes GLOBE Model

On Sept. 30, CMS announced the final Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory model designed to reduce out-of-pocket costs for Medicare Part B beneficiaries and lower program expenditures by applying international pricing benchmarks to certain Part B drugs.

The model was originally slated to begin on Oct. 1, but the final model announcement indicates a Jan. 1, 2027 start date for data collection from manufacturers, and an April 1, 2027 start date for the five-year performance period. The final rule establishing the model also includes the set of covered Part B drugs and exclusions (including orphan drugs), the criteria for selecting the cohort of Medicare Part B beneficiaries and geographic areas the model will be tested in, and many other details. Most notably, CMS notes that manufacturers participating in the voluntary GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model are waived from the mandatory participation of the GLOBE Model.

CMS estimates that the GLOBE Model could generate savings of approximately $440 million, down from the initial estimate of $11.9 billion, over the seven-year period, including $298 million in traditional Medicare Part B benefit savings, $288 million in Medicare Advantage payment savings, and $147 million in premium offset impacts. The significant decrease in savings is primarily due to GENEROUS Model participants being waived from GLOBE Model participation.

PhRMA filed a lawsuit Oct. 7 arguing that the GLOBE model exceeds CMS’ “limited authority” and that it does not have “carte blanche to rewrite the Medicare program to fit policy priorities that Congress has not authorized.” PhRMA is asking the U.S. District Court for the District of Columbia to declare the program illegal and prevent CMS from implementing it.