On October 2, 2026, the Centers for Medicare and Medicaid Services issued its Final Rule implementing the Global Benchmark for Efficient Drug Pricing Model, known as the GLOBE Model.
The rule establishes a new mandatory Medicare payment model under section 1115A of the Social Security Act, requiring manufacturer rebates for certain drugs under Medicare Part B.
The revised model will apply to just four manufacturers, following significant changes to inclusions and exclusions from the earlier Proposed Rule issued December 23, 2025.
As a result of those revisions, projected Medicare Part B savings have fallen sharply, from $11.9 billion estimated in the Proposed Rule down to $440 million under the Final Rule.
The international pricing benchmark at the heart of the GLOBE Model will be based on countries with a real GDP per capita of at least 60 percent of that of the United States and a minimum real economy size of $400 billion.
Reference countries include Australia, Austria, Belgium, Canada, Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.
Manufacturers that have signed voluntary most favoured nation agreements with the White House are excluded from the GLOBE Model, as are those participating in the Generating Cost Reductions for U.S. Medicaid model, known as the GENEROUS Model.
The Final Rule tests two approaches for establishing benchmarks: using existing commercially available international pricing data under Method I, or voluntary manufacturer-submitted net pricing data under Method II.
The Final Rule explicitly states that quality is “co-equal, not secondary” to cost reduction, marking a notable change in language from the earlier Proposed Rule.
GLOBE Model drugs must fall within specific USP Drug Classification categories, including Antineoplastics, Immunological Agents, Central Nervous System Agents, and several others listed in the Final Rule.
Eligible drugs must also be single source or sole source biological products with Medicare Part B spending greater than $100 million over a qualifying 12-month period.
The model will be implemented in randomly selected geographic areas representing 25 percent of people enrolled in Medicare Part B as their primary payer in Original Medicare.
Biosimilars and the reference biologicals they compete against are explicitly excluded once a biosimilar enters the U.S. market, as are orphan-only drugs, gene and cell therapies, and plasma-derived products.
Beneficiary coinsurance is estimated to fall to between 2 and 12 percent for eligible drugs, well below the standard 20 percent rate, with beneficiaries estimated to save approximately $177 million in out-of-pocket costs over seven years.
The Final Rule excludes 340B Program drugs from GLOBE Model calculations, meaning claims submitted with 340B modifiers will not be counted as GLOBE Model billing units or subject to GLOBE Model rebates.
CMS acknowledges that manufacturer drug price reductions under GLOBE could indirectly affect a drug’s Average Manufacturer Price and best price, which in turn would affect 340B pricing for covered entities.
The agency commits to monitoring potential impacts on the 340B Program through GLOBE model monitoring and evaluation activities, as outlined in the Final Rule.
Manufacturers face civil monetary penalties for nonpayment of required rebates, and the Final Rule includes a section defending the model against anticipated legal challenges regarding CMS authority and constitutional provisions.
The Final Rule is effective November 30, 2026, with the GLOBE Model launching January 1, 2027, and the full performance period running from April 1, 2027, through March 31, 2032.
A separate mandatory pricing model for Medicare Part D drugs, known as the GUARD Model, is also anticipated, with its own Final Rule still pending.