The Trump administration finalized its GLOBE Medicare drug pricing pilot to match lower international prices for high-cost medicines starting January 1, 2027. However, the administration exempted drugmakers that signed separate "most favored nation" deals, leaving as few as four unnamed manufacturers subject to the rule. Consequently, projected Medicare Part B savings plummeted 96% from an initial $11.9 billion to just $440 million.
Details of the GLOBE program
- ▪The Centers for Medicare and Medicaid Services finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) demonstration program to lower Medicare Part B drug prices starting Jan. 1
- ▪The GLOBE program is a mandatory pilot program designed to get Medicare to match the lower drug prices charged in other wealthy countries for high-cost medicines, such as cancer and autoimmune disorder treatments
Exemptions for drugmakers with separate deals
- ▪The Trump administration's finalized GLOBE rule exempted drugmakers that signed separate, voluntary "most favored nation" pricing agreements with the White House from participating in the mandatory GLOBE pilot program
- ▪The Trump administration has signed separate drug pricing deals with more than two dozen drugmakers, including major pharmaceutical companies Pfizer, Eli Lilly, and Novo Nordisk
- ▪Due to the exemptions granted to companies with separate "most favored nation" pricing agreements, the Trump administration's finalized GLOBE rule indicates the model may apply to as few as four unnamed drug manufacturers
Reduction in projected GLOBE savings
- ▪The Department of Health and Human Services reduced its projected Medicare Part B savings for the GLOBE model to $440 million, representing a decrease from the initial $11.9 billion projection
- ▪The Department of Health and Human Services did not respond to inquiries regarding what factors drove the sharp reduction from $11.9 billion to $440 million in projected savings for the GLOBE program
Mandatory pilot programs
- ▪The GLOBE and GUARD mandatory drug pricing pilot programs are tied to President Trump's voluntary agreements with drugmakers to offer most-favored nation prices to Medicaid recipients
- ▪The Trump administration's international most-favored nation pricing plan includes a second proposed mandatory pilot program called GUARD, which remains in the proposed stage
Debatable claims
- ▪Voluntary pricing agreements with drugmakers are more effective than mandatory controls
- ▪A drug-pricing pilot applying to only four manufacturers is too narrow to be effective
- ▪Medicare should tie US drug prices to international benchmarks
- ▪Exempting cooperative drugmakers from the GLOBE program undermines Medicare savings
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