GLOBE model finalised, with narrowed scope and fewer savings
The Centers for Medicare and Medicaid Services (CMS) has finalised a new drug pricing policy for Medicare that has drawn sharp criticism from the pharma industry.
The Global Benchmark for Efficient Drug Pricing (GLOBE) model aims to introduce the Trump administration's Most-Favoured Nation (MFN) pricing scheme to Medicare Part B – which covers certain drugs and biologics administered by physicians in outpatient care settings – using a new method for calculating inflation rebate amounts.
The new model – which is tied to prices paid in 19 reference countries – will come into effect on 1st January next year and run through to the end of March 2032, according to CMS, which said it will lower drug prices for Medicare beneficiaries.
It will launch with dramatically scaled-down savings forecasts, however, with CMS now modelling $440 million in savings compared to an original estimate of $11.9 billion when GLOBE was proposed at the end of last year.
That is because the scope has been scaled down and no longer includes orphan-only drugs, biosimilars, and their reference biologics, plasma-derived products, and certain cell and gene therapies.
Despite that narrower focus, GLOBE has been slammed by the PhRMA industry organisation, which claims it imports harmful overseas price controls into the US healthcare system.
PhRMA also maintains that it is unlawful, will affect investments in R&D for new medicines and undermine the US drug industry, and could lead to reduced availability of medicines for patients.
Healthcare providers, meanwhile, have expressed concern that GLOBE could introduce a disconnect between reimbursement benchmarks and actual acquisition costs for physician-administered drugs, like chemotherapies and complex biologics, although CMS maintains that its manufacturer-facing rebate approach addresses that risk.
"Medicare Part B patients and American taxpayers have paid significantly more for prescription medications than people in comparable countries," said CMS Administrator Mehmet Oz.
"At CMS, we're focused on more than promises to make healthcare more affordable – we're taking action to pilot a new approach to lower costs and strengthen the quality of care while preserving medical innovation."
GLOBE was proposed alongside another pricing model for Medicare Part D – GUARD – which for now remains in development. Part D is an outpatient prescription drug benefit provided to more than 50 million older adults in the US.
Both sit alongside the GENEROUS model, a voluntary MFN framework for medicine manufacturers that participate in the Medicaid Drug Rebate Programme (MDRP). Manufacturers participating in the Medicaid-focused GENEROUS model receive waivers from the mandatory GLOBE requirements.
GLOBE will apply to Medicare beneficiaries who reside in a randomly selected subset of geographic areas, encompassing approximately 25% of total Medicare beneficiaries who have Original Medicare as their primary coverage, said CMS, which suggested those selected may see reduced out-of-pocket costs from April next year.
Photo by Marek Studzinski on Unsplash
