GLOBE Most Favored Nations Drug Pricing Model for Medicare Part B Drugs Finalized and Scaled Down by CMS

On September 30, 2026, the Centers for Medicare & Medicaid Services (CMS) released the final rule for the Global Benchmark for Efficient Drug Pricing (GLOBE) Model. CMS had previously published the proposed rule on December 23, 2025, as one of three Most-Favored Nation (MFN) drug pricing models (along with GENEROUS and GUARD).¹ The final rule generally preserves the core design elements of the proposed rule by requiring mandatory manufacturer rebates for certain Medicare Part B drugs to reflect differences between US drug prices and those in a select group of international reference countries. However, CMS substantially reduced the number of drugs potentially subject to the GLOBE Model by waiving mandatory participation for manufacturers voluntarily participating in the GENEROUS Model and by adding three new drug exclusion categories: orphan-only drugs, cellular and gene therapy products, and plasma-derived products.

Notably, CMS’s projected savings under the finalized GLOBE rule are $440 million over a seven-year period (reduced from $11.9 billion under the proposed rule). GLOBE Model implementation will begin January 1, 2027.

I. Topline Takeaways for Manufacturers

1. CMS Significantly Narrowed the Scope of the GLOBE Model: The final rule substantially reduces the universe of drugs and manufacturers potentially subject to mandatory participation. With the addition of three new exclusion categories and a waiver for manufacturers participating in the GENEROUS Model, CMS now estimates that only four manufacturers would be subject to mandatory GLOBE participation based on model assumptions. By comparison, CMS estimated in the proposed rule that approximately 40 manufacturers could be affected based on 2024 Medicare Part B rebatable drugs. The waiver also creates a potential pathway for manufacturers to avoid GLOBE participation altogether through voluntary participation in the GENEROUS Model, raising the possibility that few, if any, drugs ultimately become subject to the GLOBE rebate framework. Notably, drug manufacturers who executed proprietary agreements with President Trump’s administration are also reportedly exempt from participating in GLOBE and GUARD. However, it is unclear how durable those agreements will remain after the conclusion of President Trump’s administration.
2. Projected Savings Have Declined Dramatically: Consistent with the GLOBE’s narrower scope, CMS substantially reduced its projected savings estimates. CMS now projects approximately $80 million in annual Medicare Part B net spending savings, down from $2.3 billion under the proposed rule, a reduction of roughly 97%. Similarly, projected federal savings over the life of GLOBE decreased from $11.9 billion to approximately $440 million. These revised projections suggest that the GLOBE Model is likely to play a more limited role in the administration’s broader drug pricing and cost-containment strategy than originally contemplated.
3. The GLOBE Model Remains a Time-Limited CMMI Demonstration: The finalized GLOBE Model will be implemented as a Center for Medicare and Medicaid Innovation (CMMI) demonstration under Section 1115A of the Social Security Act. GLOBE will operate for a five-year performance period and a seven-year payment period. As CMS emphasizes, GLOBE intends to test an alternative payment methodology in a narrow population rather than reform broader Medicare reimbursement. Accordingly, although the final rule advances the administration’s drug pricing agenda, GLOBE remains a temporary demonstration program that CMS estimates will ultimately affect only a limited number of drugs and manufacturers. CMS also rejected arguments that it lacked authority to implement GLOBE, reiterating its view that Section 1115A authorizes this type of payment and service delivery innovation. Nevertheless, it is likely that manufacturers subjected to mandatory participation may pursue legal challenges. It is important to remember that by the time this CMMI demonstration concludes, there will be a new Presidential administration and at that time, CMMI may continue, modify, or eliminate GLOBE and other MFN models.

II. Core GLOBE Model Elements Largely Preserved

The elements detailed below were largely finalized as proposed, with CMS adding a series of notable clarifications to guide program implementation.

1. Mandatory Manufacturer Participation: Under the final rule, GLOBE requires manufacturers of Medicare Part B rebatable drugs that qualify for GLOBE to pay rebates when a drug’s US price exceeds the applicable international benchmark.
2. Rebate Methodology and Enforcement: CMS largely finalized the proposed rebate framework, while providing additional guidance regarding benchmark calculations, manufacturer submissions, and data-source selection.
   • International Benchmark: CMS will establish an international benchmark using one of two methodologies, each adjusted for Gross Domestic Product / Purchasing Power Parity (GDP/PPP) differences and increased by an add-on amount intended to improve comparability to US pricing (generally corresponding to the Average Sales Price (ASP) 6% add-on amount). On a quarterly basis, CMS will compare the benchmarks produced under each methodology and apply the higher benchmark where both are available; otherwise, CMS will rely solely on Method I.
     • Method I: CMS will use existing commercially available international drug pricing information to identify the lowest country-level price among the set of reference countries for use as the benchmark. CMS noted that the underlying data may include drug-specific sales data, list prices, ex-manufacturer prices, retail prices, and other pricing metrics. The final rule includes several notable clarifications:
       • Quarterly Assessment: Where CMS cannot identify a Method I benchmark at the time a drug first enters the market, it will reassess the availability of international pricing data each subsequent quarter until a benchmark can be established.
       • Use of Updated Data Within the 90-Day Lag Window: If the selected data source publishes updated international pricing information within 90 days after the relevant quarter closes, CMS may use that updated data to calculate the Method I benchmark and corresponding beneficiary coinsurance adjustment.
       • More Precise Data-Source Selection and Fallback Mechanics: The final rule codifies specific rules for how CMS selects among available data sources — prioritizing the source covering the most countries and using the most recent quarter for which both sales and volume data are available when prior-quarter data is needed.
       • Detailed Price and Volume Calculation Mechanics: The final rule specifies step-by-step how CMS converts raw international pricing and volume data into a per-HCPCS-billing-unit country-level price, including volume weighting, presentation-level conversions, and the methodology for calculating the 5% US average price screen.
     • Method II: CMS will use international drug net pricing data submitted voluntarily by manufacturers to establish a benchmark based on volume-weighted average net price per HCPCS billing unit. The final rule includes several important clarifications:
       • Enhanced Submission Requirements: Manufacturers must submit supporting documentation describing the calculations used, the underlying data and net-pricing elements, and any assumptions relied upon in preparing the submission.²
       • Incomplete Submissions May Still Be Considered: Manufacturers that cannot provide every required data element due to out-licensing or co-licensing arrangements may still submit Method II data, provided they disclose and explain the missing elements and the reasonable assumptions used to fill the gaps.
       • Clearer Acceptance Standard and Benchmark-Unavailability Rule: The final rule precisely defines when a submission qualifies as an “applicable submission” and when CMS will treat a Method II benchmark as unavailable, specifically, when it cannot identify an across-country volume-weighted GDP/PPP-adjusted net price per HCPCS billing unit from accepted submissions.
       • Explicit Multi-Manufacturer Calculation Steps: When multiple manufacturers submit Method II data, the final rule sets out a detailed step-by-step calculation whereby CMS volume-weights each submission’s GDP/PPP-adjusted net price, sums the weighted amounts and volumes across submissions, and divides to arrive at a single benchmark rounded to three decimal places.
   • Per-Unit Rebate: For each applicable quarter, the per-unit GLOBE rebate is equal to the greater of: (1) the specified amount (generally ASP plus 6%) minus the applicable international benchmark; or (2) the specified amount minus the inflation-adjusted payment amount under the Medicare Part B Drug Inflation Rebate Program (“Inflation Rebate Program”). CMS clarified that the specified amount will be calculated using the most current data available at the time of calculation, including any ASP restatements or corrections. As a result, the GLOBE rebate functions as an incremental rebate layered on top of the Inflation Rebate Program, with manufacturers owing only the amount by which the GLOBE rebate exceeds the rebate otherwise payable under the Inflation Rebate Program. Accordingly, the inflation rebate effectively serves as the minimum rebate amount, or “floor,” for purposes of the GLOBE calculation.
   • Total GLOBE Model Rebate: The total GLOBE Model rebate amount for a GLOBE Model drug for an applicable calendar quarter owed by a manufacturer of the GLOBE Model drug would be the product of the per unit GLOBE Model rebate amount and the total number of GLOBE Model billing units.
3. Drug Inclusion Criteria: The final rule adopts the following criteria for inclusion as a GLOBE Model drug:
   • The drug must be identified as a Part B rebatable drug under 42 C.F.R. § 427.101 at the HCPCS Level II code level (the existing definition used under the Inflation Rebate Program).
   • The drug must be single source or sole-source biological product (i.e., not the listed drug or reference drug for a therapeutically equivalent generic or biosimilar).
   • The drug must fall into one of the following U.S. Pharmacopeia (USP) Drug Classification Categories, which remain unchanged from the proposed rule: antigout agents, antineoplastics, blood products and modifiers, central nervous system agents, immunological agents, metabolic bone disease agents, and ophthalmic agents.
   • The drug’s HCPCS Level II code must account for more than $100 million in Part B FFS spending over a 12-month period that ends six months before the applicable calendar quarter.
     • CPI-U Adjustment: The proposed rule set a flat $100 million spending threshold for drug inclusion with no adjustment mechanism, but the final rule adds Consumer Price Index for Urban Consumers (CPI-U) inflation indexing to prevent the threshold from eroding in real terms over GLOBE’s multiyear duration. Starting at $100 million for the first applicable quarter beginning April 1, 2027, the threshold is adjusted each subsequent quarter by multiplying the prior quarter’s unrounded threshold by the CPI-U percentage increase for the 12-month period ending six months before the start of that quarter, with the result rounded to the nearest $10, subject to a zero floor that prevents deflation from reducing the threshold below its prior level.
4. Basket of Countries Used for Benchmarking: The final rule confirms that the reference countries used for determining the international benchmark will be Australia, Austria, Belgium, Canada, Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.
5. Beneficiary Scope: Under the final rule, GLOBE Model beneficiaries are Medicare Part B enrollees who reside in CMS-selected geographic areas and receive a qualifying GLOBE Model drug for which Medicare makes a separate Part B payment. CMS will select these geographic areas using ZIP Code Tabulation Areas (ZCTAs), with the selected areas intended to represent approximately 25% of Original Medicare Part B beneficiaries and spending. Beneficiaries enrolled in Medicare Advantage or other primary group health plans are excluded from GLOBE.
   • Updates to Beneficiary Enrollment: CMS clarified that the beneficiary list will be updated no more frequently than monthly, rather than weekly as proposed. Once identified as a GLOBE Model beneficiary, an individual’s status generally will not change based on a subsequent move or change in site of care unless the individual loses Medicare eligibility.
6. Government Price Reporting and Interactions With Other Federal Healthcare Programs: The final rule confirms that GLOBE Model rebates will not be included in the calculation of Medicaid Best Price (BP), Average Manufacturer Price (AMP), ASP, or Maximum Fair Price (MFP).
   • Indirect Impacts: CMS noted, however, that manufacturers’ indirect pricing responses to the GLOBE Model could affect government pricing metrics. For example, CMS observed that reductions in AMP for certain 5i drugs could trigger application of the AMP payment cap under Section 1847A(d) of the Social Security Act if ASP exceeds AMP. In those circumstances, Medicare payment could be limited to 103% of AMP rather than the otherwise applicable ASP-based reimbursement amount (generally ASP plus 6%).

III. Substantive Additions and Changes in the Final Rule

1. Waiver for GENEROUS Model Drugs: In the final rule, CMS stated its intent and authority to waive the GLOBE Model’s mandatory participation requirement for a manufacturer of a GLOBE drug if the manufacturer is also voluntarily participating in the GENEROUS Model in the same calendar quarter. CMS explained that this waiver would be used to prevent overlapping participation in the two models from complicating CMS’s ability to properly evaluate the GENEROUS Model. Manufacturers that have signed GENEROUS participation agreements as of August 17, 2026, would receive such waiver from GLOBE Model participation. Notably, CMS denied formal codification of this waiver.
2. Exclusion Categories Expanded: The proposed rule initially excluded three exclusionary categories from GLOBE: 1) Drugs or biological products without a calculable “specified amount” as used for the US net price, under 42 C.F.R. 427.302(b), 2) drugs for which a maximum fair price under the Medicare Drug Price Negotiation Program is in effect, and 3) drugs that are no longer Part B rebatable drugs. Under the final rule, these exclusions are finalized and an additional three exclusions are added:
   • Orphan-Only Part B Rebatable Drugs: In response to stakeholder comments regarding the unique market dynamics of orphan drugs and the potential impact of GLOBE on innovation for rare disease drugs, CMS noted that it is acting “out of an abundance of caution” to add an orphan-only drug exclusion. The exclusion will apply when the following conditions are met:
     • 1) the drug has received orphan designation under the FDA for one or more rare diseases or conditions, and
     • 2) all of the drug’s approved indications are for one or more of those rare diseases or conditions.
   • Cell and Gene Therapy Products: In response to stakeholder comments regarding the unique complexities of this class of products and unique international pricing characteristics due to alternative pricing strategies abroad, CMS has added an exclusion for products listed on the FDA’s Approved Cellular and Gene Therapy Products website.
   • Plasma-Derived Products: In response to stakeholder comments regarding patient access concerns and the complexity of donor-dependent supply chains that are uniquely vulnerable to disruptions, CMS finalized a new exclusion for plasma-derived products, consistent with the exclusion for these products under the Medicare Negotiation Program. “Plasma-derived products” subject to the exclusion will be defined as “licensed biological product[s] that [are] derived from human whole blood or plasma, as indicated on the approved product labeling.”
3. Timeline: The final rule delayed the GLOBE Model’s implementation from the originally proposed October 1, 2026, start date, citing the need for additional time for systems readiness, stakeholder engagement, and monitoring infrastructure. Under the final rule, GLOBE now begins January 1, 2027, with a one-quarter voluntary manufacturer reporting period, followed by a five-year performance period running from April 1, 2027, through March 31, 2032, and a seven-year payment period running through at least March 31, 2034.

IV. Considerations for Manufacturers Subject to Potential Future Model Inclusion

1. Revenue Impacts: For the limited number of manufacturers subject to the GLOBE Model, GLOBE will likely create significant pressure on gross-to-net revenue dynamics and will likely necessitate a reassessment of pricing strategy in both the US and international markets. Given the January 1, 2027, effective date, manufacturers have a limited window to prepare and should promptly begin modeling the revenue implications of GLOBE Model participation, including the potential impact on existing pricing models across reference countries. Manufacturers should also establish internal processes to ensure compliance with GLOBE’s rebate and reporting requirements, including preparation for voluntary submission of international net pricing data under Method II, which may yield more favorable benchmark outcomes than reliance on Method I alone. Additionally, manufacturers should evaluate whether voluntary enrollment in the GENEROUS Model may provide a pathway to obtain a waiver from mandatory GLOBE Model participation.
2. Government Pricing Considerations: With respect to government price reporting, although the final rule confirms that GLOBE Model rebates will not be included in the calculation of ASP, AMP, BP, or MFP, manufacturers should anticipate significant operational implications. Specifically, manufacturers will need to identify and segregate GLOBE Model transactions, configure government price reporting systems to apply the appropriate treatment to such transactions, develop reasonable assumptions for any data gaps, and maintain adequate controls and documentation to prevent inadvertent inclusion of GLOBE Model rebates in other price concessions that remain reportable under existing government price reporting frameworks. Manufacturers should assess whether their current systems and internal controls are equipped to identify and appropriately account for GLOBE Model transactions as GLOBE takes effect. Moreover, while GLOBE Model rebates are excluded from government price calculations as a direct matter, the indirect pricing effects of GLOBE — including potential changes to manufacturer pricing behavior in response to the international benchmarking framework — may over time affect ASP, AMP, BP, and MFP as GLOBE’s impact works its way through the complex and interlocking regulatory framework underpinning these pricing metrics.

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Overall, the Trump administration seeks significant drug pricing reforms that could alter manufacturer drug pricing strategy and the drug supply chain. In addition to the GLOBE Model, CMS will likely finalize the GUARD Model prior to the end of 2026, creating additional implications for Part D drug manufacturers. The Goodwin Center for Market Access and Pricing will continue to monitor activity related to MFN initiatives and other drug pricing reforms. Please reach out to the authors of this alert or the Goodwin lawyer with whom you typically consult if you have any questions.