Americans have long paid more for brand-name prescription drugs than people in other wealthy countries. A new Medicare experiment, finalized on September 30, 2026, will test whether tying drugmakers' rebates to those foreign prices can bring U.S. costs down. But the final version is far narrower than the one first proposed, and its projected savings have shrunk dramatically.
What GLOBE is
The Global Benchmark for Efficient Drug Pricing (GLOBE) Model was created by the Center for Medicare and Medicaid Innovation, the part of the Centers for Medicare & Medicaid Services (CMS) that tests new payment approaches [1][3]. It applies to Medicare Part B, which covers drugs given in a doctor's office or hospital outpatient setting, such as infusions and injections for cancer and autoimmune diseases [2].
The model builds on a program created by the 2022 Inflation Reduction Act. Since
2023, drug manufacturers have been required to pay rebates to Medicare when the price of a Part B drug rises faster than inflation [4]. GLOBE changes how that rebate is calculated for certain drugs: if Medicare's price exceeds a benchmark based on the lowest prices paid in a group of economically comparable countries, drawn from members of the Organisation for Economic Co-operation and Development (OECD), manufacturers must pay a larger rebate [3][5]. This approach is often called "most favored nation" pricing, because it aims to give the United States the best price offered to other nations.
Who and what is included
The model targets single-source drugs and biologics, meaning products without generic or biosimilar competition, that account for more than $100 million a year in original Medicare Part B spending in certain classes, including cancer drugs, immune-system drugs and eye treatments [2]. Participation is mandatory for manufacturers of the selected drugs, but the model applies to only part of the country. About 25% of original Medicare Part B patients will be included, based on whether they live in randomly selected ZIP code areas [4]. Comparing these areas with the rest of the country is how CMS will measure whether the model works. For patients inside the model, CMS estimates that about 94% of covered drugs would carry coinsurance of 2% to 12%, instead of the standard 20% [4]. The model does not apply to Medicare Advantage enrollees [1].
A much smaller final version
When CMS proposed GLOBE in December 2025, it estimated total savings of about $11.9 billion. The final rule estimates $440 million over seven years, and the agency lowered its annualized savings estimate from about $2.3 billion to about $80 million [1][3][5]. CMS attributed the drop to changes made in the final rule [1]. These include new exclusions for certain drugs and the exclusion of manufacturers participating in a separate CMS model known as GENEROUS. CMS said a manufacturer's participation in GLOBE "could impact CMS's ability to isolate the effects of the GENEROUS Model" [2]. According to a legal analysis by King & Spalding, the final rule itself indicates that after these changes, the number of remaining manufacturers of GLOBE drugs would be four [6]. The start date was also pushed back. The model was originally scheduled to begin October 1, 2026; it will now begin January 1, 2027, when CMS will start collecting international net pricing data from manufacturers [3][5]. The regulations take effect November 30, 2026 [7]. The model will run for five performance years, followed by a payment period during which CMS calculates and collects rebates [3].
What patients and providers will notice
For Medicare patients who happen to live in a selected area and receive one of the affected drugs, the most visible change could be a lower bill. Because Part B normally requires patients to pay 20% of a drug's cost after the deductible, a reduction in coinsurance to between 2% and 12% could mean meaningful savings on expensive infusions [4]. Supplemental insurance such as Medigap already covers that coinsurance for many beneficiaries, however, so the effect will vary. For doctors and hospitals, CMS designed the model so that the rebate falls on manufacturers rather than reducing what Medicare pays clinicians for administering the drugs [4]. In the rule, CMS also responded to public comments about the model's potential effects on small rural hospitals, which often rely on Part B drug payments [7]. Until CMS posts the list of drugs and selected areas, however, practices cannot tell which of their patients will be affected [4].
What supporters and critics say
"Medicare Part B patients and American taxpayers have paid significantly more for prescription medications than people in comparable countries," CMS Administrator Dr. Mehmet Oz said in announcing the final rule [4]. Supporters of international reference pricing argue that drugmakers should not charge Americans several times what they charge patients in Europe or Japan for the same product. The pharmaceutical industry has long opposed the approach, arguing that it effectively imports foreign government price controls and could reduce investment in research. Industry analysts have said the model could face legal challenges over whether CMS has the authority to link manufacturer rebates to foreign prices [8]. The narrower model also arrives alongside the administration's other approach to the same goal. In 2025 and 2026, the administration signed company-specific "most favored nation" pricing agreements with many large drugmakers, and those agreements can reduce or eliminate the new tariffs on imported patented drugs. Much of the administration's drug pricing strategy now runs through these one-on-one deals rather than through Medicare rules alone.
How it fits with other drug pricing efforts
GLOBE is one of several overlapping efforts to lower drug costs. Medicare is also directly negotiating prices for selected high-cost drugs under the Inflation Reduction Act, and the third round of those negotiations, which includes Part B drugs for the first time, concludes in November 2026. The administration has also pursued voluntary pricing deals and the TrumpRx.gov direct-to-consumer platform. Analysts expect the agency to publish the list of GLOBE drugs and selected geographic areas on the model's website, but the rule did not give a date [4].
Why it matters
For years, international reference pricing was discussed mainly as a theory. GLOBE makes it a real, mandatory policy in Medicare for the first time, even if on a limited scale. The results, measured by comparing patients inside and outside the model, could shape whether future administrations expand the approach or abandon it.
Sources
- 1. "Most-Favored-Nation Drug Pricing for Medicare Part B Significantly Narrowed in Final Rule," Sidley Austin, October 2026. https://www.sidley.com/en/insights/newsupdates/2026/10/most-favored-nation-drug- pricing-for-medicare-part-b-significantly-narrowed-in-final-rule
- 2. "Final GLOBE drug model projects much smaller savings while 2027 Part D premiums split," Managed Healthcare Executive, October 1, 2026. https://www.managedhealthcareexecutive.com/view/final-globe-dr ug-model-projects-much-smaller-savings-while-2027-part-d-premiums-split
- 3. "Global Benchmark for Efficient Drug Pricing (GLOBE) Model final rule," EY Tax News, October 2, 2026. https://taxnews.ey.com/news/2026-2104
- 4. "Medicare aims to trim Part B drug spending, but not clinician pay," Epocrates, October 2, 2026 (citing CMS press release of September 30, 2026). https://www.epocrates.com/online/article/medicare-aims-to-trim-part-b-drug-spending-but-not-clinician-pay
- 5. "CMS Finalizes MFN Pricing in Medicare Part B Through GLOBE Model," Covington & Burling, October
- 2026. https://www.cov.com/en/news-and-insights/insights/2026/10/cms-finalizes-mfn-pricing-in-medicare-p art-b-through-globe-model
- 6. "CMS Finalizes GLOBE Mandatory Drug Payment Model Tying Certain Part B Drug Rebates to an International Benchmark," King & Spalding, October 6, 2026. https://www.kslaw.com/Insights/Articles/CMS-Finalizes-GLOBE-Mandatory-Drug-Payment-Model
- 7. "Public Inspection: CMS: Global Benchmark for Efficient Drug Pricing Model," Rural Health Information Hub, October 1, 2026. https://www.ruralhealthinfo.org/news/39047
- 8. "CMS Finalizes GLOBE Model Linking Medicare Part B Drug Rebates to International Prices," First Report Managed Care, October 2026. https://www.hmpgloballearningnetwork.com/site/frmc/news/cms-finalizes-gl obe-model-linking-medicare-part-b-drug-rebates-international-prices Information in this article is current as of October 9, 2026. Bracketed numbers refer to the sources listed above.