PhRMA sues Trump administration over Medicare drug pricing program

On October 7, 2026, the Pharmaceutical Research and Manufacturers of America (PhRMA) sued the Trump administration to block the GLOBE pilot program, which ties Medicare Part B drug prices to lower international rates. PhRMA argues the Centers for Medicare & Medicaid Services (CMS) exceeded its statutory authority. While CMS plans to waive the rule for over two dozen drugmakers that signed voluntary price-cut deals, reducing projected seven-year savings from $11.9 billion to $440 million, PhRMA seeks to prevent future price controls.

The lawsuit and its defendants

• ▪On October 7, 2026, the Pharmaceutical Research and Manufacturers of America (PhRMA) filed a lawsuit in the U.S. District Court for the District of Columbia to invalidate the Trump administration's GLOBE drug pricing rule
• ▪PhRMA's GLOBE lawsuit names Health Secretary Robert F. Kennedy Jr., the U.S. Department of Health and Human Services, the Centers for Medicare & Medicaid Services (CMS), CMS Administrator Dr. Mehmet Oz, and CMS Innovation Center Director Abe Sutton as defendants

Mechanism and impact of the GLOBE rule

• ▪The Department of Health and Human Services estimates the GLOBE program will reduce Medicare Part B spending by $440 million over its seven-year model period, down from an initial projection of $11.9 billion
• ▪CMS's GLOBE rule establishes a "most-favored-nation" pricing system to set hospital drug prices for Medicare Part B patients based on prices paid in comparable overseas countries

Dispute over statutory authority

• ▪The Centers for Medicare & Medicaid Services defended its authority in its finalized GLOBE rule, stating it acted within a purpose-specific statutory framework designed by Congress for testing pricing models
• ▪PhRMA argues in its lawsuit that the Centers for Medicare & Medicaid Services exceeded its statutory authority by using the GLOBE pilot program to rewrite Medicare's pricing structure without congressional action

Voluntary drug-pricing deals

• ▪The Centers for Medicare & Medicaid Services plans to waive its GLOBE pilot program for drug manufacturers that sign voluntary deals with the White House to cut prices
• ▪The Trump administration has signed voluntary drug-pricing deals with more than two dozen drugmakers, including Pfizer, Eli Lilly, and Novo Nordisk

Arguments by PhRMA's General Counsel

• ▪PhRMA General Counsel Jim Stansel stated that the Centers for Medicare & Medicaid Services is replacing Medicare's pricing structure with a system that Congress has declined to implement multiple times over several years
• ▪PhRMA General Counsel Jim Stansel stated that PhRMA's lawsuit is important despite the GLOBE rule's limited reach because the rule could outlast voluntary deals and extend to future administrations

Debatable claims

• ▪PhRMA's lawsuit against the GLOBE rule is justified despite the rule's limited reach
• ▪CMS exceeded its statutory authority by implementing the GLOBE drug pricing rule
• ▪The Trump administration's voluntary drug-pricing deals are an appropriate way to lower costs
• ▪Benchmarking Medicare drug prices to overseas costs does more harm than good