CMS finalizes GLOBE Model tying Medicare Part B rebates to international prices

The Centers for Medicare & Medicaid Services (CMS) has finalized the Global Benchmark for Efficient Drug Pricing (GLOBE Model), a mandatory Medicare payment model that recalculates inflation rebates for certain Medicare Part B drugs using international price benchmarks. The final rule was published in the Federal Register of October 2, 2026 as CMS–5545–F and takes effect on November 30, 2026.

The rule implements the model under section 1115A of the Social Security Act, the authority that allows the CMS Innovation Center to test payment models. It follows the proposed rule published on December 23, 2025 (90 FR 60244–60336), which drew comments including 20,011 pieces of correspondence that CMS identified as duplicative submissions from the same entity. The model begins on January 1, 2027 with a voluntary manufacturer reporting quarter, followed by five performance years from April 1, 2027 to March 31, 2032 and a seven-year payment period ending March 31, 2034.

A geographically randomized test

• Geographic areas are chosen by random selection of ZIP Code Tabulation Areas covering approximately 25 percent of Original Medicare Part B beneficiaries.
• CMS will publish the selected areas no later than 75 calendar days before the April 1, 2027 start of the performance period.
• Beneficiaries in Medicare Advantage, section 1876 cost plans and section 1833 prepayment plans are excluded, and a comparison group is retained to measure the model’s effects.

Two benchmarks and lower coinsurance

For each GLOBE Model drug, CMS compares the specified amount with the greater of two benchmarks: Method I, the lowest GDP purchasing-power-parity adjusted country-level price among reference countries, with a 102 percent threshold; and Method II, the volume-weighted average of manufacturer-submitted international net prices, with a 105 percent threshold. Manufacturers of GLOBE Model drugs must participate and pay the incremental rebate to the Federal Supplementary Medical Insurance Trust Fund.

Beneficiaries in selected areas pay reduced coinsurance: using illustrative 2024 data, 94 percent of illustrative GLOBE Model drugs would carry a coinsurance percentage between 2 and 12 percent, well below the standard 20 percent.

Which drugs are included

The model covers single source drugs and sole source biological products in seven United States Pharmacopeia Drug Classification categories with more than $100 million in Original Medicare Part B allowed charges over a 12-month period:

• Antigout Agents
• Antineoplastics
• Blood Products and Modifiers
• Central Nervous System Agents
• Immunological Agents
• Metabolic Bone Disease Agents
• Ophthalmic Agents

Excluded are orphan-only drugs, cell and gene therapies listed on the FDA Approved Cellular and Gene Therapy Products website, plasma-derived products, drugs with a negotiated maximum fair price, biosimilars and generics.

Savings and reporting

CMS estimates the finalized model will produce overall savings of $440 million in Original Medicare Part B net spending and $177 million in total out-of-pocket savings for beneficiaries, below the $2.3 billion annualized estimate in the proposed rule. Rebate reporting follows an incremental approach: a GLOBE Model Rebate Report is issued no later than eight months after the end of each applicable calendar quarter, with payment due within 30 days of receipt. The reference countries are 19 non-U.S. OECD members, including Australia, Canada, France, Germany, Italy, Japan, Spain, Sweden, Switzerland and the United Kingdom, selected using 2024 CIA World Factbook data on real GDP per capita and aggregate real GDP.

The rule reshapes how Medicare pays for some of its costliest physician-administered drugs, shifting part of the rebate calculation onto prices paid in comparable economies and cutting coinsurance for roughly a quarter of Original Medicare beneficiaries. Manufacturers face mandatory participation and new reporting duties, while providers must apply the reduced coinsurance only for beneficiaries inside the randomly selected areas. Questions can be directed to Nicholas Minter at (410) 786–8914 or GLOBEmodel@cms.hhs.gov.

Source: Federal Register, Vol. 91, No. 190, October 2, 2026, Rules and Regulations, p. 62936 (official reference: CMS–5545–F).