CMS finalizes GLOBE with new drug exclusions and lower projected savings

CMS has finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, introducing international pricing into the calculation of rebates for selected Medicare Part B drugs from 2027. The final rule adds new drug exclusions and a planned waiver for manufacturers participating in GENEROUS, substantially reducing CMS's projected savings compared with the proposed model.

The Baseline

• GLOBE will launch on January 1, 2027, with its five-year performance period beginning on April 1, 2027.
• The final rule adds exclusions for orphan-only drugs, certain cell and gene therapies and plasma-derived products.
• CMS now estimates $298 million in Original Medicare Part B benefit savings, compared with $8.4 billion under the proposed model.

The Centers for Medicare & Medicaid Services (CMS) has announced finalization of its mandatory Global Benchmark for Efficient Drug Pricing (GLOBE) Model, setting out how international drug prices will be incorporated into the calculation of manufacturer rebates for selected medicines covered under Original Medicare Part B.

At 585 pages, the final rule provides substantial detail on the model's operation and responds to the many comments submitted following its proposal in December 2025. Several elements have changed, including the implementation timetable, eligible drugs and interaction with the GENErating cost Reductions fOr US Medicaid (GENEROUS) Medicaid MFN model.

The rule, published in the Federal Register on October 2, 2026, takes effect on November 30, 2026. GLOBE will begin on January 1, 2027, with voluntary submission of international net pricing data. It will be tested over five performance years, running from April 1, 2027 through March 31, 2032.

GLOBE within the wider MFN program

GLOBE is one of three CMS Innovation Center models developed as part of the Administration's Most-Favored-Nation (MFN) drug pricing policy, alongside GENEROUS and Guarding US Medicare Against Rising Drug Costs (GUARD).

The models apply international pricing to different parts of US government drug coverage. GENEROUS, which began in January 2026, is a voluntary Medicaid model under which participating manufacturers provide MFN pricing through supplemental rebates to state Medicaid programs.

GLOBE applies to selected drugs administered under Medicare Part B, while the proposed GUARD model would apply a similar international benchmarking approach to selected prescription drugs covered under Medicare Part D. Unlike GENEROUS, GLOBE is mandatory for manufacturers of drugs that meet its eligibility criteria, although the final rule introduces an important connection between the two models by allowing CMS to waive GLOBE participation for manufacturers participating in GENEROUS.

GUARD was proposed in December 2025 but has not yet been finalized.

How will GLOBE work?

GLOBE applies to certain single-source drugs and sole-source biological products administered under Medicare Part B, including medicines used in oncology, immunology, rheumatology, ophthalmology and endocrinology.

For eligible drugs with more than $100 million in annual Original Medicare Part B spending, CMS will compare US pricing with benchmarks derived from 19 economically comparable countries, including the UK, Germany, France, Canada and Japan. The $100 million threshold will be adjusted annually for inflation.

CMS will use two methods to determine the international benchmark. One uses the lowest adjusted price across the 19 reference countries, while the other uses volume-weighted international net prices voluntarily submitted by manufacturers, with CMS applying the higher of the two benchmarks where both are available.

Manufacturers will owe an additional GLOBE rebate where the applicable Medicare amount exceeds the international benchmark. The rebate cannot be lower than that already payable under the Medicare Part B Drug Inflation Rebate Program.

Approximately 25% of eligible Original Medicare Part B beneficiaries will be included in the model through randomly selected geographic areas. Beneficiaries receiving GLOBE drugs may pay reduced coinsurance from April 2027, while provider reimbursement will remain unchanged. CMS estimates the model will reduce beneficiary out-of-pocket costs by $177 million over the model period.

New exclusions added

Following consultation, CMS has added three categories to the drugs excluded from GLOBE: drugs whose only approved indications are for rare diseases or conditions, products included on the FDA's approved cell and gene therapy list and plasma-derived products.

Drugs subject to a Maximum Fair Price under the Medicare Drug Price Negotiation Program are also excluded, alongside biosimilars and their reference products under specified circumstances.

GENEROUS changes the projected reach of GLOBE

The final rule also sets out how GLOBE will interact with GENEROUS, the voluntary MFN model for Medicaid launched in January 2026.

CMS intends to use its existing waiver authority to remove the mandatory GLOBE participation requirement for manufacturers participating in GENEROUS during the same calendar quarter. The waiver has not been incorporated as a regulatory exemption within the GLOBE rule itself.

For its impact analysis, CMS assumes manufacturers that had signed GENEROUS participation agreements by August 17, 2026 will receive the waiver. Based on an illustrative 2024 drug list, CMS estimates that around 19 manufacturers could otherwise be affected by GLOBE, falling to approximately four after accounting for assumed GENEROUS participation.

Projected savings fall

The narrower scope of the GLOBE model is reflected in CMS's revised financial estimates.

When GLOBE was proposed, CMS estimated $8.4 billion in Original Medicare Part B savings over the model before accounting for changes in Part B premiums. Under the final rule, estimated Original Medicare Part B benefit savings have fallen to $298 million.

Accounting for Medicare Advantage payment effects and premium offsets, CMS estimates overall Medicare Part B net savings of $440 million over the seven-year payment period, equivalent to approximately $80 million in annualized savings.

CMS attributes the change to factors including the additional drug exclusions, delayed implementation and the assumed exclusion of manufacturers participating in GENEROUS.