CMS Finalizes MFN Pricing in Medicare Part B Through GLOBE Model

On September 30, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a final rule establishing the Center for Medicare and Medicaid Innovation (CMMI) Global Benchmark for Efficient Drug Pricing (GLOBE) Model, requiring most favored nation (MFN)-based rebates in Medicare Part B. Under the Model, CMS relies on Section 1115A of the Social Security Act to modify certain Medicare Part B inflation rebate provisions. Instead of paying rebates when price increases for certain Part B rebatable drugs exceed the rate of inflation, the Model requires a rebate when the U.S. price of these drugs exceeds the MFN price. We discussed the notice of proposed rulemaking (NPRM) for this model in a previous client alert. The final rule for the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model, which was proposed on the same day as the GLOBE Model, remains under review by the Office of Management and Budget.

The GLOBE Model final rule largely tracks the proposed rule, with only limited changes. The scope and anticipated impact of the Model have narrowed significantly, however. Whereas the proposed rule estimated that the GLOBE Model would produce overall savings of $11.9 billion, the final rule estimates overall savings of $440 million in Medicare Part B net spending. The new exclusions set forth in the final rule, as discussed below, are likely one factor decreasing the rule’s impact. CMS also confirms that manufacturers that executed Participation Agreements for the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model by August 17, 2026 will be exempt from the GLOBE Model. Specifically, CMS states that the agency intends to waive mandatory participation in the GLOBE Model “for a calendar quarter within the GLOBE Model performance period where such manufacturer participates in the GENEROUS Model during such calendar quarter[.]” Such waivers are based on CMS’s determination that “a manufacturer’s participation in the GLOBE Model could impact CMS’s ability to isolate the effects of the GENEROUS Model.”[1] In the final rule, CMS estimates that these exemptions reduce the number of GLOBE Model participating manufacturers from 19 to 4 (based on an illustrative set of potential Model Drugs).

CMS finalized its proposal that the GLOBE Model would apply to Part B rebatable drugs in certain United States Pharmacopeia (USP) Drug Classification (DC) categories with Part B spending in excess of $100 million over a specified 12-month period. In response to commenters who expressed concern that the GLOBE Model as proposed failed to capture the value of orphan drugs and could disincentivize research and development into rare disease treatments, in the final rule, CMS opted to exclude orphan drugs from the Model “out of an abundance of caution specifically for Medicare beneficiaries with rare diseases who may rely upon these drugs.” CMS also excluded certain approved cell and gene therapies (CGTs) listed on FDA’s Approved Cellular and Gene Therapy Products website, acknowledging the complexity of the manufacturing process for CGTs. CMS explicitly noted that it may reconsider these products’ inclusion in the GLOBE Model through future notice-and-comment rulemaking. Finally, the GLOBE Model will not include plasma-derived products; while CMS did not enumerate its reasoning for their exclusion, CMS had previously invited comments on whether such products should be excluded because they may be more likely to experience shortages and be subject to reduced rebate amounts.

The final rule also shifts the timeline for the performance and payment periods for the GLOBE Model. The final rule delays the model’s start from October 1, 2026 to January 1, 2027. The first performance year will now begin April 1, 2027, a shift of two quarters from the performance period start date of October 1, 2026 contemplated in the proposed rule. The GLOBE Model performance period will last five years through March 31, 2032, and the payment period will run through March 31, 2034 to facilitate payment of rebates accrued during the performance period.

The final rule maintains the proposed rule’s structure for determining MFN benchmark prices based on either information available to CMS from third-party sources (“Method I”), or manufacturer-submitted pricing information (“Method II”). In the final rule, CMS clarifies that it will allow manufacturers to elect the latter methodology even when co-licensing or out-licensing arrangements may inhibit their ability to obtain all required data elements for every international analog of a Model drug. If a manufacturer cannot obtain a licensing partner’s pricing data, the manufacturer must submit an explanation of why a data element is not included as part of its reasonable assumptions, which will be subject to CMS review.

The chart below provides an overview of the key features of the GLOBE Model and relevant dates during the GLOBE Model test period. Entries marked with an asterisk (*) denote changes in the final rule as compared to the proposed rule.

The terms of the GLOBE Model differ materially from those for the GENEROUS Model, which implements MFN pricing in Medicaid. For example, the MFN price in the GENEROUS Model is based on pricing in a reference country basket of just eight countries: Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom. Also, the MFN price under the GENEROUS Model is the second lowest country-specific manufacturer-reported net price, rather than the lowest price, as required under the GLOBE Model.

The GLOBE Model represents the latest phase of the Administration’s efforts to institute MFN prices for prescription drugs in the United States, as set forth in the President’s May 12, 2025 Executive Order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” The model also appears intended to meet the President’s Medicare-related directive in the April 15, 2025 Executive Order “Lowering Drug Prices By Once Again Putting Americans First,” which called for “a payment model to improve the ability of the Medicare program to obtain better value for high-cost prescription drugs and biological products covered by Medicare.” The Administration continues to implement the GENEROUS Model to secure MFN-based supplemental rebates in Medicaid, as discussed in the September 18, 2026 Fact Sheet “President Donald J. Trump Announces Lower Drug Prices for All 50 State Medicaid Programs.” Our prior client alerts have analyzed the May 12 MFN Executive Order, the April 15 Drug Pricing Executive Order, and the November 6 announcement of the GENEROUS Model.