The Centers for Medicare & Medicaid Services (CMS) is finalizing the Global Benchmark for Efficient Drug Pricing Model, a new approach to reducing drug costs in Original Medicare Part B while maintaining quality of care.
The GLOBE Model will test a revised rebate formula for certain drugs under the Medicare Part B Drug Inflation Rebate Program, using international drug pricing information to set benchmarks. The model applies to medications typically administered by clinicians in healthcare settings, but excludes biosimilars, orphan-only drugs, plasma-derived products, and certain cell and gene therapies.
CMS Administrator Dr. Mehmet Oz said the action addresses a persistent cost disparity: "Medicare Part B patients and American taxpayers have paid significantly more for prescription medications than people in comparable countries." Americans pay more than four times as much for brand-name drugs as people in other developed countries, according to CMS. Between 2008 and 2021, drug spending in Original Medicare Part B grew nearly four times faster than drug spending across all payers.
The five-year program will operate from January 1, 2027, through March 31, 2032, with pharmaceutical manufacturer rebate invoicing continuing until March 31, 2034. The model will apply to approximately 25% of total Medicare beneficiaries—those residing in randomly selected geographic areas—with reduced out-of-pocket costs potentially beginning April 1, 2027.