CMS finalizes GLOBE drug model: lower Part B coinsurance for a quarter of patients from April 2027, add-on payment unchanged

Ninety dollars instead of eighty. That is how CMS illustrates what changes on a $100 Part B drug claim under the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, when the patient’s coinsurance falls to 10% and Medicare picks up the rest [1]. The practice collects the same total. Medicare recovers the difference from drugmakers, through rebates benchmarked to what 19 other countries pay [1].

What changed

CMS announced the final GLOBE rule on September 30 and published it in the Federal Register on October 2 as CMS-5545-F [1, 2]. It takes effect November 30, 2026, and adds a new 42 CFR part 513 [1]. The model is mandatory for manufacturers of the drugs it covers [1].

The schedule has three layers. Manufacturers may begin submitting international net pricing data on January 1, 2027 [1]. Five performance years, during which patients see lower coinsurance and providers see adjusted payments, run from April 1, 2027, through March 31, 2032 [1, 2]. Rebate invoicing and reconciliation continue to March 31, 2034 [1, 2].

GLOBE is built on the Part B inflation rebate that the Inflation Reduction Act created in August 2022 [3]. Under that law, when a drug’s price outpaces inflation, the manufacturer owes Medicare a rebate and, from April 1, 2023, the patient’s coinsurance is figured as 20% of the lower, inflation-adjusted payment amount [3]. GLOBE tests a different benchmark for that same rebate: a per-unit amount drawn from prices in Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland and the United Kingdom [1]. The model rebate can never be less than what the manufacturer already owes under the inflation rebate program [1].

CMS administrator Dr. Mehmet Oz said Part B patients and taxpayers “have paid significantly more for prescription medications than people in comparable countries” [2].

Who it affects

Drugs. The model covers single-source drugs and sole-source biologicals that are Part B rebatable drugs, fall in one of seven drug classes (antigout agents, antineoplastics, blood products and modifiers, central nervous system agents, immunological agents, metabolic bone disease agents and ophthalmic agents) and have more than $100 million in Original Medicare Part B spending over a 12-month window [1]. Excluded: drugs with a negotiated maximum fair price in effect, orphan-only drugs, cell and gene therapies on FDA’s list, and plasma-derived products [1]. The last three exclusions were added after comments on the December 23, 2025, proposal [1]. CMS also says biosimilars, and their reference products once a biosimilar is on the U.S. market, are out [2].

Patients. CMS will randomly select ZIP Code Tabulation Areas covering roughly 25% of beneficiaries whose primary coverage is Original Medicare Part B [1, 2]. Medicare Advantage and cost-plan enrollees, and people whose employer coverage pays first, are not in the model [1]. Patients will not be notified individually and cannot opt out [1].

Providers. Practices, hospital outpatient departments, ASCs and pharmacies that bill Part B drugs are not model participants [1]. They “will continue to buy and bill for GLOBE Model drugs as usual,” the rule says [1]. Claims billed with a 340B modifier are excluded from the units on which manufacturers owe GLOBE rebates [1].

Manufacturers. CMS linked 19 manufacturers to the drugs on its illustrative 2024 list [1]. But it intends to waive GLOBE for any manufacturer participating in its separate GENEROUS model, which offers Medicaid discounts, and assuming waivers for those that had signed on, only 4 would remain [1].

How much will the GLOBE Model lower Part B coinsurance?

Each quarter, CMS compares a drug’s Part B payment amount with its per-unit GLOBE benchmark amount [1]. If the payment amount is higher, the patient’s coinsurance becomes 20% of the benchmark, expressed as a percentage of the payment amount [1].

The rule walks through one illustrative case: a payment amount of $57.146 against a benchmark of $12.237 yields coinsurance of $2.447 per unit, or 4.282% [1]. Across the illustrative 2024 list, CMS estimates that 94% of drugs would carry coinsurance between 2% and 12% for patients in the model [1].

The benchmark itself is the greater of two figures [1]. Method I uses commercially available international pricing data to estimate the lowest country-level price, adjusted for differences in per-capita GDP and purchasing power [1]. Method II averages the net prices manufacturers choose to report from the reference countries [1]. CMS then adds a threshold percentage and the dollar value of the add-on percentage, so the 6% add-on is not stripped out of the comparison [1].

CMS projects $440 million in Part B net savings over the seven-year payment period, about $80 million a year, and $177 million in lower out-of-pocket costs for beneficiaries [1]. On average, its international benchmarks were 68% below 2024 average sales prices (ASPs), which CMS calls the upper limit of potential savings [1]. That is far below the proposal: Covington & Burling, a law firm, noted in an October 2 client alert that the December rule had estimated $11.9 billion in overall savings and the start date had been October 1, 2026 [4].

What it means for your practice

Your revenue per dose should not move because of the model itself. CMS states that the add-on “will remain at 6 percent of ASP for most Medicare Part B drugs,” and that GLOBE rebates are not counted in ASP [1]. In response to commenters worried about drug revenue, CMS wrote that the model “will not directly impact manufacturers’ ASPs, quarterly Medicare Part B payment limits for separately payable Part B drugs, or providers’ acquisition costs” [1].

The indirect channel is pricing. CMS concedes that if manufacturers change prices in response, ASPs and your acquisition costs “may be higher or lower” than without the model [1]. It also notes that a lower average manufacturer price could make it more likely that the Inspector General finds a drug’s ASP above its AMP, the situation in which Medicare substitutes 103% of AMP for ASP [1]. If you run a 340B program, ceiling prices could shift through the same route, and CMS says it will watch for that; this site covered a separate 340B rebate pilot in August.

The front desk carries most of the change. For the same drug on the same day, one Original Medicare patient may owe 20% and another, living a few ZIP codes away, may owe 4% [1]. Commenters warned of “parallel billing and reimbursement systems,” and hospitals asked for access to the eligible-beneficiary list [1]. CMS declined to build anything new. It will apply the adjustment during claims processing, has made the coinsurance figure unappealable, and suggests that providers wait for the Medicare remittance and any supplemental payer before billing the patient [1]. It also points out that the larger Medicare share reduces your exposure to uncollected coinsurance [1].

Patients with Medigap or other secondary coverage may see little direct change, since their coinsurance was already covered; CMS says all Part B enrollees could see lower premiums [1].

What to do now

1. Watch for the ZIP file. CMS will randomly select the areas at least 90 days before April 1, 2027, and post them in machine-readable form at least 75 days before that date [1].
2. Map your drug mix. CMS will post the GLOBE drug list by HCPCS code, with each drug’s coinsurance percentage, quarterly before each quarter begins [1]. Compare it with your top-billed codes.
3. Revisit collection timing. If you collect drug coinsurance at the visit, plan how you will refund overpayments for patients in the model [1].
4. Update estimates and scripts. Patient cost estimates and financial counseling for model drugs should reflect the lower percentage; CMS plans fact sheets and FAQs providers can share, plus a helpdesk [1].

The policy fight

CMS counted 20,168 pieces of correspondence on the proposal, 157 of them unique [1]. Multiple commenters argued the model exceeds the CMS Innovation Center’s authority under section 1115A and amounts to price controls Congress never authorized, and recommended withdrawal [1]. CMS answered that the law lets it “limit testing of a model to certain geographic areas,” and pointed to other mandatory models that randomized regions [1].

Oncology raised a broader worry. Some commenters noted that when negotiated maximum fair prices begin applying to Part B drugs in 2028, payment shifts from ASP plus 6% to MFP plus 6%, which they estimated could cost community oncology practices $12 billion to $25 billion [1]. They asked CMS to monitor the combined effect on practices, and one asked CMS to delay GLOBE until after the first Part B negotiation cycle [1]. CMS did not delay the model; its answer was to exclude a drug from GLOBE in any quarter while a maximum fair price is in effect [1].

Not everyone wanted less. One commenter backed the coinsurance cut paired with payment that preserves the full allowable [1]. Another wanted the add-on dropped from the benchmark, arguing it rewards choosing the costliest drug; CMS refused, saying that would confound the test [1].

Some commenters argued that overlap with GENEROUS would distort the GLOBE test. CMS said a manufacturer in both models could muddy the evaluation of GENEROUS, and it chose not to write manufacturer exemptions into the GLOBE rule itself [1]. How many drugmakers end up inside GLOBE in April 2027 depends on who signs GENEROUS agreements before then.