Medicare's new GLOBE model ties some Part B drug rebates to overseas prices

The Centers for Medicare & Medicaid Services has finalised a new, mandatory payment model that would peg part of what Medicare pays for some physician-administered drugs to prices paid abroad. The Global Benchmark for Efficient Drug Pricing Model — GLOBE — was published as a final rule in the Federal Register on 2 October 2026 and takes effect on 30 November 2026 [s1].

What the model does

GLOBE is a test authorised under section 1115A of the Social Security Act, the provision that lets CMS pilot alternative payment approaches [s1]. It targets a specific slice of Medicare: "certain separately payable" Part B drugs and biological products — the medicines clinicians administer in offices and hospital outpatient settings, billed separately rather than bundled into a procedure [s1].

The mechanism is the Part B drug inflation rebate. Current law already requires manufacturers to pay Medicare a rebate when a drug's price rises faster than inflation. GLOBE tests "an alternative method for calculating" those rebate amounts, benchmarked to international prices, "to reduce costs for Original Medicare (OM) beneficiaries and the Medicare program while preserving quality of care" [s1]. "Original Medicare" is CMS's term for traditional fee-for-service coverage [s1].

CMS sets out two ways to build the benchmark. Method I uses "existing, commercially available international drug pricing information" to establish a benchmark based on an estimate of the lowest country-level price among a defined set of reference countries [s1]. That data, the rule notes, "may represent drug-specific sales data, list prices, ex-manufacturer prices, retail prices, other prices, or a combination" [s1]. Method II instead uses international data that manufacturers submit voluntarily [s1]. Either way, the benchmark becomes an input to recalculating the inflation rebate; it does not, by itself, set the price Medicare pays a provider for the drug, which continues to run through the existing Part B payment formula [s1].

Who is affected, and how

The model is mandatory and geographic. CMS assigns Medicare beneficiaries to a "model cohort" or a "comparison group" based on whether their address of record falls within the model's designated geographic areas, and says that selection "will be solely determined by CMS and will not be subject to appeal" [s1]. The design lets CMS compare outcomes in model areas against the rest of the country.

For patients in the model, the rule describes a lower cost share. In its worked example, a beneficiary's coinsurance is "reduced to 10 percent (instead of the usual 20 percent)," while the Medicare program payment to the provider or supplier "will be adjusted upward" — to $90 rather than the usual $80 on the illustrative claim — so the provider is not left short [s1]. In effect, a larger share of the bill shifts from the patient to the program.

GLOBE runs on a defined clock: a five-year performance period from 1 April 2027 through 31 March 2032, inside a seven-year payment period that extends to 31 March 2034, unless CMS ends it sooner [s1]. The agency first proposed the model on 23 December 2025 [s2].

The problem CMS says it is addressing

The rule frames GLOBE against rising drug costs for older Americans. CMS cites the West Health-Gallup Affordability Index finding that only 61 percent of adults over age 65 are considered "Cost Secure," meaning they have access to affordable care and have been able to pay for recent visits and prescriptions [s1]. It reports that Original Medicare Part B drug spending "has also grown by 85.8 percent ($18.7 billion) from 2014 to 2021," while the standard monthly Medicare Part B premium rose 41.5 percent, from $104.90 to $148.50, over the same period [s1].

GLOBE sits alongside, but is separate from, the Medicare Drug Price Negotiation Program created by the Inflation Reduction Act, under which selected drugs carry a "maximum fair price" beginning with later applicability years [s1]. Where negotiation sets a price for a handful of high-spend drugs, GLOBE changes how an inflation rebate is computed for a broader set of Part B products, and only in test geographies.

What to watch

CMS has not published the final list of reference countries or the drugs that will fall inside the model in its first performance period, both of which determine how large an effect GLOBE has. Also unresolved in practice: how manufacturers respond to an international benchmark, whether they supply voluntary data under Method II, and whether legal challenges follow a mandatory model that assigns beneficiaries by geography without a right of appeal [s1]. The model's own comparison design is meant to answer the central question — whether tying rebates to overseas prices lowers costs without harming care — but those results are years away [s1].