Most-Favored-Nation Drug Pricing for Medicare Part B Significantly Narrowed in Final Rule

On October 2, 2026, the Centers for Medicare & Medicaid Services (CMS) published in the Federal Register the Global Benchmark for Efficient Drug Pricing (GLOBE) Model Final Rule, along with a press release and “Frequently Asked Questions” document. The Final Rule purports to implement a mandatory Medicare Part B five-year demonstration payment model that will require manufacturers of certain high-spend Part B drugs and biologicals to pay rebates to CMS tied to international drug prices for those products. According to CMS, GLOBE will “test whether a new rebate formula for certain drugs in the Medicare Part B Drug Inflation Rebate Program reduces costs for Original Medicare beneficiaries and the Medicare program while preserving quality of care.” Summary slides can be found here. 

The Final Rule applies to Medicare Part B drug utilization by certain beneficiaries enrolled in original (fee-for-service) Medicare. CMS states that it expects GLOBE to reduce out-of-pocket costs or co-insurance for original Medicare beneficiaries who receive a GLOBE Medicare Part B drug. GLOBE does not reach Medicare Advantage or Medicare Part D utilization.

CMS retained the core structure of the GLOBE Model Proposed Rule (published on December 23, 2025), but the Final Rule materially limits its reach. Most notably, in the Final Rule, CMS:

• added exclusions for orphan-only drugs, cellular and gene therapy products, and plasma-derived products
• announced its intent to waive GLOBE’s mandatory participation requirements, on a calendar-quarter basis, for manufacturers participating in the GENEROUS Model during the same quarter
• delayed the start of the first performance year from October 1, 2026, to April 1, 2027

• CMS estimates that, with these changes, “the number of remaining manufacturers of GLOBE Model drugs would be four.” CMS does not identify the purported four manufacturers, nor does it acknowledge potential impact of GLOBE on future launches of Medicare Part B drugs or existing Part B drugs that reach the GLOBE threshold during the GLOBE demonstration period. CMS acknowledges the “expected consolidation of two [of the four] companies . . . .”
• CMS also reduced its estimate of the Model’s annualized Medicare Part B net savings from approximately $2.3 billion to approximately $80 million under the Final Rule. CMS explained that “[t]he annualized amount in this final rule is lower than the GLOBE Model proposed rule because of the finalized policies and other considerations,” which include the new drug exclusions and the exclusion of manufacturers participating in GENEROUS.

The Final Rule otherwise retains the originally proposed international reference-pricing methodology and mandatory participation requirement for manufacturers whose products remain within GLOBE. Key aspects of the Final Rule include the following:

• Timing: The five-year performance period will begin April 1, 2027, and end March 31, 2032, followed by a two-year period for rebate invoicing and reconciliation. Q1 2027 will serve as an initial voluntary reporting period, during which manufacturers may submit international drug pricing data for prices in Q4 2026 if the manufacturer chooses to self-report under the Method II benchmark calculation. Notwithstanding the rushed implementation, CMS states that “[w]e have reviewed and confirmed the viability of the GLOBE Model data management, systems, and operational requirements for implementation, monitoring, and evaluation under the revised timeline.” 
• Drugs Subject to the GLOBE Model: The Model will apply to Part B rebatable single source drugs and sole source biological products in the following seven USP categories: (i) antigout agents, (ii) antineoplastics, (iii) blood products and modifiers, (iv) central nervous system agents, (v) immunological agents, (vi) metabolic bone disease agents, and (vii) ophthalmic agents. CMS states its intent to “consider adding USP DC categories in future rulemaking based on factors such as changes in Part B rebatable drug spending patterns, the emergence of new therapeutic areas with significant beneficiary financial burden, and the results of ongoing model evaluation.”

To be included, a drug must also meet the $100 million Medicare Part B spending threshold (calculated as the sum of fee-for-service Medicare Part B final action claims with dates of service within the consecutive 12-month period ending six months prior to the start of the applicable calendar quarter that have separately payable allowed charges greater than $0). New under the Final Rule, this $100 million spending threshold will be adjusted for inflation each calendar quarter as CMS evaluates newly eligible drugs for inclusion. Once a drug meets the spending threshold, it continues to satisfy that criterion for the remainder of the model performance period, even if spending later falls below the threshold. In the Final Rule, CMS also clarified that authorized generics and unbranded biological products may qualify for inclusion because they are marketed under the same NDA or 351(a) BLA as the original product and may therefore meet the definitions of a single source drug or sole source biological product. GLOBE will not apply to biosimilars and their reference biologicals once a biosimilar enters the U.S. market during the demonstration period. 

CMS further states, “Before each calendar quarter during the model performance period, CMS will publish the GLOBE Model Drug HCPCS Code List on the GLOBE Model webpage. CMS will review and update the list quarterly to reflect drugs added to or removed from the model. Providers should refer to the current list to determine whether a drug is included for a particular calendar quarter.” 

• New Categories of Exclusions for Orphan-Only Drugs, Plasma-Derived Drugs, and Cell and Gene Therapies: CMS added exclusions from the GLOBE Model for orphan drugs designated and approved only for one or more rare diseases or conditions, cell and gene therapies, and plasma-derived products. 

• Other Exclusions:
  • Importantly, CMS finalized its proposal to exclude from GLOBE “[a] Part B rebatable drug for applicable calendar quarters prior to the first applicable calendar quarter for which CMS identifies a specified amount under 42 CFR 427.302(b).” This exclusion delays application of GLOBE for newly launched products. CMS also notes that products billed under a NOC code are excluded from the definition of “Part B rebatable drug” and that a claim billed under a NOC HCPCS code does not contain sufficient information for CMS to associate such claims with a specific drug or biological.
  • Additionally, CMS finalized its proposals to exclude drugs subject to a maximum fair price (MFP) under the Medicare Drug Price Negotiation Program and drugs or biological products that cease to be Part B rebatable drugs.
  • CMS also confirmed that radiopharmaceutical products are not subject to GLOBE, stating that radiopharmaceutical drugs, skin substitutes, and “biological products that are not paid under [the Medicare Part B statute],” among others, “fall within an excluded product category for purposes of the Part B rebatable drug definition” and “would not satisfy the GLOBE Model inclusion criteria and, therefore, would not be in the GLOBE Model.” 
• Anticipated Waiver for Manufacturers Participating in GENEROUS: CMS stated that it intends to use its Section 1115A waiver authority under the GENEROUS Model to waive GLOBE’s mandatory participation requirements for a manufacturer during any calendar quarter in which the manufacturer participates in GENEROUS. CMS declined to codify the waiver in the GLOBE regulations, asserting that the waiver can instead be effectuated under CMS Innovation Center authority applicable to the GENEROUS Model. The Final Rule’s impact estimates assume that manufacturers that have signed GENEROUS participation agreements as of August 17, 2026 will receive the waiver.
• Rebate Calculation: CMS stated that it did not receive any comments on the proposed GLOBE Model rebate calculation and finalized it with only “non-substantive modifications for editorial accuracy.” As proposed, for each applicable calendar quarter, the per-unit GLOBE Model rebate amount will equal the greater of (i) “the specified amount,” generally the per-unit Part B payment amount for the product minus the per-unit international GLOBE benchmark, or (ii) the standard Part B inflation rebate under the Inflation Reduction Act. Any resulting per-unit GLOBE Model incremental rebate amount is then multiplied by the number of billing units furnished to GLOBE Model beneficiaries, who will be drawn from randomly selected geographic areas representing approximately 25% of eligible Medicare Part B beneficiaries.
• International Benchmark: In the Final Rule, CMS retained the two-method approach for establishing the GLOBE international benchmark and, if both are available, will use the greater of the Method I benchmark (increased by 2%) or Method II benchmark (increased by 5%).
  • Method I draws on CMS-identified pricing using pricing databases and uses the lowest per-unit GDP (PPP)-adjusted country-level price identified from select international pricing data. Once established, the Method I price generally remains in place for the duration of the performance period. CMS will prioritize international pricing data for the “applicable ASP calendar quarter” (two quarters before the applicable GLOBE quarter) but may use historical data if pricing information for that quarter is unavailable.
  • Method II (manufacturer self-reporting) uses an across-country, volume-weighted average GDP (PPP)-adjusted net price based on voluntarily submitted manufacturer data and is determined for each applicable calendar quarter using data for the applicable ASP calendar quarter. CMS states that manufacturers may pursue Method II “even when they are unable to obtain all required data elements for every international analogue.” Where information is unavailable, including due to a co-licensing or out-licensing agreement, “the manufacturer must submit supporting documentation, including any reasonable assumptions that were applied, to fully explain why such data element is not included.”
• Reference Countries: CMS retained its originally proposed set of 19 reference countries: 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. 
• Timing of Rebate Calculation and Invoicing: CMS finalized its proposal that manufacturers generally must pay GLOBE rebates within approximately nine months after the end of the quarter in which the applicable utilization occurs. Specifically, CMS will calculate the GLOBE Model rebate on a quarterly basis and issue a Preliminary Rebate Report to the manufacturer at least one month before the final report, with 10 days for manufacturers to submit a Suggestion of Error. The final Rebate Report, issued no later than eight months after the quarter in which utilization occurs, serves as the invoice, and payment is due within 30 days of receipt.

CMS itself “acknowledges that the GLOBE Model represents a novel application of CMS Innovation Center authority under section 1115A of the Act.”

Manufacturers should evaluate their current Part B portfolios and pipeline products against the Final Rule’s revised eligibility criteria. In particular, manufacturers developing potentially eligible Part B products should consider GLOBE as part of launch planning and licensing, including the potential implications of international launch sequencing and pricing for the benchmark that CMS may ultimately establish for the product. The industry should also closely monitor for legal challenges to GLOBE and for any regulatory activity related to the Medicare Part D MFN rule, “Guarding U.S. Medicare Against Rising Drug Costs Model,” commonly referred to as GUARD.