CMS proposes mandatory GLOBE and GUARD models to link Medicare drug prices to global benchmarks

The US Centers for Medicare & Medicaid Services (CMS) has proposed two new mandatory drug payment models, GLOBE and GUARD, which would link Medicare drug prices and rebates to international benchmarks. The proposals extend the Administration’s most-favored-nation pricing agenda across Medicare Parts B and D.

Earlier than anticipated, CMS has released draft proposals for two innovative payment models that would test alternative approaches to existing inflation rebate programs under Medicare Parts B and D. The proposed Global Benchmark for Efficient Drug Pricing (GLOBE) Model and Guarding US Medicare Against Rising Drug Costs (GUARD) Model would require pharmaceutical manufacturers to pay rebates when US drug prices exceed those paid in economically comparable countries.

The proposals, issued through CMS’s Center for Medicare and Medicaid Innovation (CMMI), would apply to drugs covered under Medicare Part B and Medicare Part D, respectively, and signal a move away from voluntary pilots toward compulsory participation. Unlike the previously announced GENErating cost Reductions fOr US Medicaid (GENEROUS) Model, which is voluntary and focuses on Medicaid, the GLOBE and GUARD models would be mandatory for affected Medicare drugs. Public comments on the two proposed models are due by February 23, 2026.

The GUARD Model would apply to outpatient prescription drugs covered under Medicare Part D, including medications dispensed through retail pharmacies, mail order, home infusion, and long-term care settings. CMS proposes to test a revised rebate formula that modifies the Part D inflation rebate by incorporating international pricing information. Existing manufacturer rebates and discounts would be factored into the calculation, with manufacturers required to pay rebates to the federal government when prices exceed an international benchmark.

CMS calculates the model would encompass around 25% of Part D enrollees and would apply only to beneficiaries living in randomly selected geographic areas. The model is proposed to begin on January 1, 2027, and would operate for 5 years, with rebate invoicing and reconciliation continuing until 2033.

The proposed GLOBE Model would apply to certain separately payable Medicare Part B drugs, which are typically administered in physician offices and other clinical settings. These include drugs used to treat conditions such as cancer, autoimmune diseases, arthritis, and endocrine disorders. GLOBE would modify the Part B inflation rebate calculation by introducing an international pricing benchmark, triggering manufacturer rebates when US prices exceed levels observed in comparable markets would apply to Medicare beneficiaries who reside in a defined geographic area, encompassing approximately 25% of Medicare beneficiaries in the US.

Drugs eligible for inclusion would be limited to single-source drugs and sole-source biological products in therapeutic areas where high prices are associated with access barriers and avoidable downstream costs. Biosimilars, and their reference biologics once biosimilars enter the US market, would be excluded. The 5-year GLOBE Model would run from October 1, 2026.

Both models would exclude drugs already selected for Medicare price negotiations and would benchmark prices using either manufacturer-reported international pricing data or information available to CMS for up to 19 economically comparable markets. These include Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the UK. CMS has released more than 550 pages of draft documentation outlining the proposed design and implementation of the two models, signaling a rapid move to operationalize international reference pricing within Medicare.

For industry, the proposals mark a further shift from policy signaling to operational detail. As highlighted by Tim Wright in a recent video discussion, the move to mandatory models, defined reference markets, and specified rebate calculations significantly raises the stakes for manufacturers, particularly in terms of pricing strategy, portfolio planning, and global price coherence. With CMS now setting out how international benchmarks may be applied across Parts B and D, companies will be closely watching how these models progress through consultation and implementation.

Readers can view Tim Wright’s full analysis in the accompanying here, and are encouraged to register for the episode 2, where he will examine the GLOBE and GUARD models in greater detail and explore their potential implications for industry decision-making.