The Centers for Medicare & Medicaid Services (CMS) on Oct. 1 finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory Innovation Center model that aims to reduce Medicare Part B spending on certain eligible pharmaceutical products. GLOBE will apply in randomly selected ZIP codes encompassing approximately 25% of Original Medicare beneficiaries. The model will launch Jan. 1, 2027, with a performance period from April 1, 2027, through March 31, 2032.
The GLOBE Model modifies the Medicare Part B Inflation Rebate Program, which requires manufacturers that increase prices above a domestic-based benchmark to pay a rebate penalty to CMS. GLOBE modifies the calculation of those rebates for selected drugs by incorporating an international pricing benchmark based on prices in 19 economically comparable countries. While GLOBE does not directly modify the 340B ceiling price, changes in Medicare Part B drug prices could affect 340B savings through their potential effects on average sales price and other pricing data used in the 340B Drug Pricing Program.
CMS estimates generating approximately $298 million in Original Medicare Part B benefit savings over the model period, before accounting for Medicare Part B premium effects. The agency estimates approximately $111 million in total savings for Original Medicare beneficiaries, including $50 million in cost-sharing savings and $61 million in premium savings.
CMS is still considering a separate Most-Favored-Nation drug pricing policy for Medicare Part D, called the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) model. CMS first proposed both models in December 2025 and intended to launch them Oct. 1, 2026.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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