The Centers for Medicare & Medicaid Services (CMS) has finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory Medicare Part B payment model that will use international drug prices to calculate additional manufacturer rebate obligations for certain medicines.
The final rule includes several meaningful changes from the proposal, including a more limited geographic scope and exclusions for certain orphan drugs, plasma-derived products, cell and gene therapies, biosimilars, and some reference biologics.
Those changes are significant. But they do not resolve the central concern: tying U.S. drug policy to prices established in foreign health systems risks importing the consequences of government price controls into the American market.
CIFE supports efforts to make prescription medicines more affordable and accessible. But affordability policies must also preserve the incentives that drive investment in new treatments and cures.
The prices used as international benchmarks are often shaped by centralized negotiations, reimbursement restrictions, and other government interventions. Using those prices as a reference point for Medicare does not create a true market-based benchmark. It instead risks allowing foreign governments’ pricing decisions to influence how innovation is valued in the United States.
That concern extends beyond GLOBE to the proposed GUARD Model for Medicare Part D, which similarly relies on international pricing information. Together, the models represent a broader shift toward incorporating foreign price-setting into Medicare.
American patients and taxpayers should not be expected to disproportionately support the cost of global medical innovation. But the answer is not to replicate the pricing systems used abroad. Policymakers should instead push other developed countries to contribute more fairly while strengthening competition, transparency, and patient access here at home.
CMS says it will evaluate GLOBE based not only on Medicare spending, but also on patient out-of-pocket costs, drug utilization, continuity of care, and other access measures. Those outcomes will be critical.
Lower prices on paper should not be considered a success if they come at the expense of patient access or future innovation.
CIFE will continue to support reforms that make medicines more affordable while protecting the market incentives, intellectual property, and investment environment that have made the United States the global leader in biomedical innovation.
