The federal government is proposing a new way to lower the amount that Medicare pays for drugs administered in doctors’ offices and clinics. The Global Benchmark for Efficient Drug Pricing (GLOBE) model would tie Medicare payments for certain high-cost drugs (single-source drugs and sole-source biological products in select therapeutic classes) to prices charged in other wealthy countries. This paper examines how the proposal works, what it could accomplish, and where it falls short.

Why This Matters

Americans pay far more for prescription drugs than patients in other countries. Medicare Part B, which reimburses providers for drugs administered by clinicians, including cancer therapies, spent $46 billion on drugs in 2024, up from $22 billion a decade earlier. Patients bear a share of those costs directly. Reforms that bring prices closer to international levels could save money for Medicare, taxpayers, and patients alike. Policymakers, patient advocates, and health care providers all have a stake in getting the design right.

What We Found

The GLOBE model has the potential to reduce the cost of some high-cost drugs, but it also has notable weaknesses.

• Projected savings are substantial, but coverage is limited. The Centers for Medicare and Medicaid Services (CMS) estimates the model would save Medicare $11.9 billion and reduce patient cost-sharing by $6.2 billion over seven years, but the model would only apply to a subset of drugs and 25 percent of traditional (fee-for-service) Medicare beneficiaries in randomly selected geographic areas. Manufacturers that have already struck private pricing deals with the Trump administration may be exempt, which would further narrow the model’s reach.
• The pricing benchmark has vulnerabilities. If CMS uses the lowest-available list-price benchmark (rather than independently verified net prices), manufacturers may respond by delaying new drug launches in low-price countries or quietly raising prices abroad while offering hidden discounts, undermining savings to Medicare and its enrollees.
• Clinical value is not rewarded. As written, the model treats all top-selling drugs the same. A modification could allow manufacturers of drugs with strong evidence of meaningful clinical benefit defer GLOBE participation, creating an incentive to generate rigorous effectiveness research.
• Monitoring is essential. CMS can track effects on drug access, patient adherence, and prices outside Medicare as the model rolls out alongside parallel proposals for Medicaid and Medicare Part D.

How We Did It

The authors reviewed the proposed GLOBE rule published in the Federal Register, compared its design to related federal drug pricing proposals, and drew on prior research on international reference pricing, Medicare payment policy, and pharmaceutical market dynamics.