The Centers for Medicare & Medicaid Services (CMS) has released two new drug payment models to address provisions of an April 15 executive order focused on lowering prescription drug prices [refer to Washington Highlights, April 18]. The Global Benchmark for Efficient Drug Pricing (GLOBE) Model targets certain drugs payable under Medicare Part B if their prices exceed those paid in economically comparable countries. The Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model is similar, but targets certain drugs paid for under Medicare Part D. Both of these proposed models are mandatory and slated to operate for five years. GLOBE is proposed to launch Oct. 1, 2026, and GUARD is proposed to launch Jan. 1, 2026. The CMS is accepting comments on both models until Feb. 23, 2026.
The GLOBE model would require drug manufacturers to provide rebates to Medicare Part B for certain single-source drugs and biologicals administered to Medicare beneficiaries covering 25% of zip code tabulation areas. The mechanism for providing the rebate would be the same as the process through which manufacturers provide inflationary rebates under the Inflation Reduction Act (IRA, P.L. 117-169, PDF). Manufacturers would be required to provide, through a rebate to Medicare, the lower of the IRA inflationary benchmark price or the international benchmark price established under the GLOBE model. The rebate amount would be based on an international benchmark established using either existing international drug pricing information or drug pricing data voluntarily submitted by manufacturers. Coinsurance amounts for Medicare beneficiaries participating in the model would be adjusted to 20% of the lower GLOBE benchmark amount.
The GUARD model aims to reduce drug prices to those of economically similar countries by requiring drug manufacturers to provider a rebate for Part D drugs to the Medicare Supplementary Medical Insurance Trust Fund for drugs subject to the model that are over the international drug pricing benchmark. This is a modification to the existing Medicare Part D Inflation Rebate Program, using a benchmark based on international pricing information rather than the current domestic benchmark. The CMS estimates this model will result in $15 billion in savings.