On September 30, CMS's Center for Medicare and Medicaid Innovation finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory payment model that will incorporate international pricing benchmarks into the Medicare Part B Drug Inflation Rebate calculation, requiring impacted drug manufacturers to pay revised rebates when prices for certain physician-administered drugs exceed the lowest prices charged for the same drugs in a market basket of non-U.S. OECD countries.

CMS says the model aims to test "whether an alternative calculation for the Medicare Part B drug inflation rebate for certain drugs and biological products will reduce program spending for Medicare and taxpayers while preserving or enhancing the quality of care furnished to Medicare beneficiaries." CMS estimates the model will save Medicare $440 million over seven years, down from the $11.9 billion projected in the proposed rule. CMS projects the model will reduce Medicare and Medicare Advantage beneficiary out-of-pocket costs by $177 million over seven years.

The final rule includes key changes that CMS said account for the lower anticipated savings, including:

• Additional drug and manufacturer exclusions;
• Updated data for calculating the gross domestic product (PPP) adjuster; and
• Moving the model start date from October 1, 2026 to January 1, 2027.

CMS said on January 1, 2027, the agency will begin to work with impacted drug manufacturers to collect international drug net pricing data. The model will then operate for a five-year performance period from April 1, 2027, through March 31, 2032. CMS said the model will also include a seven-year payment period during which CMS will calculate, invoice, collect, and reconcile the GLOBE Model rebates for each performance year. This payment period will span April 1, 2027 through March 31, 2034.

Click here for the final rule. Click here for the press release. Click here for the FAQ.

Additional information is available in the WCEY Health Alert, attached below.