CMS Finalizes Mandatory GLOBE Model to Test Lower Part B Drug Costs

A finalized mandatory model will test whether tying Medicare Part B drug rebates to international prices can lower costs for beneficiaries and Medicare while preserving quality of care, according to CMS.¹

The Global Benchmark for Efficient Drug Pricing (GLOBE) Model, part of the Trump Administration's efforts to reduce drug costs, will launch January 1, 2027. Participation is mandatory for manufacturers of eligible Part B drugs that are not otherwise excluded.²

How GLOBE Works

GLOBE tests an alternative way to calculate rebates under the Medicare Part B Drug Inflation Rebate Program, using an international benchmark instead of the current domestic one. The Inflation Reduction Act established that program to require manufacturer rebates to Medicare when prices for certain drugs rise faster than inflation.^2,3

The benchmark is based on international net pricing data that manufacturers may voluntarily submit or on commercial data sources, covering reference countries from 19 countries, including Canada, Germany, Japan, and the United Kingdom.² Manufacturers will continue to send rebates directly to the Medicare Supplementary Medical Insurance Trust Fund.

Which Drugs GLOBE Covers and Excludes

GLOBE drugs are single-source drugs and sole-source biologicals from oncology, rheumatology, immunology, ophthalmology, and endocrinology classes, with certain exceptions, where annual original Medicare spending exceeds $100 million.

GLOBE excludes biosimilars and their reference biologicals once a biosimilar enters the US market.¹ CMS said excluding orphan-only drugs, plasma-derived products, and certain cell and gene therapies is a change from the proposed rule made in response to public comments.

Why CMS Is Targeting Part B Drug Spending

CMS said Americans pay more than 4 times as much for brand-name prescription drugs as people in other developed countries,¹ though its GLOBE model page puts the gap at 3 times for the same medications.² CMS also cited data from the HHS Office of the Assistant Secretary for Planning and Evaluation showing original Medicare Part B drug spending grew nearly 4 times as fast as drug spending across all payers, including Medicare, Medicaid, and commercial insurance, between 2008 and 2021.¹

CMS Administrator Mehmet Oz, MD, said Part B patients and taxpayers have "paid significantly more for prescription medications than people in comparable countries." He said the agency is piloting a new approach intended to lower costs and strengthen quality of care while preserving medical innovation.

GLOBE applies the Trump administration’s earlier Most Favored Nation (MFN) pricing approach to Part B through rebates rather than set prices, with a benchmark based on the reference countries CMS names. The MFN concept dates to the end of President Donald Trump's first term, when it specifically covered Part B drugs.⁴ After a May 2025 MFN executive order, HHS and CMS set a target price equal to the lowest price in an Organisation for Economic Co-operation and Development country with a gross domestic product per capita at least 60% of the US figure. GLOBE's rebate benchmark is defined separately, using pricing from the reference countries CMS names.²

GLOBE Timeline and Beneficiary Reach

After its January 1, 2027, launch, GLOBE will run through March 31, 2032. Rebate invoicing and reconciliation will continue until March 31, 2034, 2 years after the model ends.¹

The model applies to beneficiaries in a randomly selected subset of geographic areas covering about 25% of beneficiaries who have original Medicare as their primary coverage. Reduced coinsurance for GLOBE drugs will be in effect for beneficiaries in those areas from April 1, 2027, through March 31, 2032, with out-of-pocket costs tied to the international benchmark.² CMS said Medicare's payment to providers and suppliers will be adjusted when the coinsurance reduction applies and will equal the allowed amount minus the GLOBE coinsurance amount, subject to other adjustments.

References

1. CMS finalizes new mandatory drug payment model to deliver lower drug prices for beneficiaries in Original Medicare Part B. News release. CMS. September 30, 2026. Accessed October 1, 2026. https://www.cms.gov/newsroom/press-releases/cms-finalizes-new-mandatory-drug-payment-model-deliver-lower-drug-prices-beneficiaries-original
2. GLOBE (Global Benchmark for Efficient Drug Pricing) Model. CMS. Updated September 30, 2026. Accessed October 1, 2026. https://www.cms.gov/priorities/innovation/innovation-models/globe
3. Medicare Inflation Rebate Program. CMS. Updated October 1, 2026. Accessed October 1, 2026. https://www.cms.gov/initiatives/medicare-prescription-drug-affordability/overview/medicare-inflation-rebate-program
4. Joszt L. HHS sets pricing target for Trump's most favored nation drug price model. AJMC^®. May 20, 2025. Accessed October 1, 2026. https://www.ajmc.com/view/hhs-sets-pricing-target-for-trump-s-most-favored-nation-drug-price-model