CMS finalizes GLOBE drug pricing model

The Centers for Medicare & Medicaid Services Sept. 30 finalized its Global Benchmark for Efficient Drug Pricing Model, also known as the GLOBE Model. The mandatory model will test an alternative calculation for manufacturer rebates under the Medicare Part B Inflation Rebate Program that uses a benchmark derived from international pricing information instead of the current domestic benchmark. In response to public comments, the GLOBE Model excludes biosimilars and their biologic treatments referenced, as well as orphan-only drugs, plasma-derived products and certain cell and gene therapies. Also, the model will not apply to any manufacturer participating in the agency’s GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model, leaving only four manufacturers that CMS anticipates will be required to participate. CMS said the model will apply to Medicare beneficiaries residing in a randomly selected subset of geographical areas, covering approximately 25% of all beneficiaries with Original Medicare as their primary coverage. CMS estimates the finalized model will generate $440 million in savings over the seven-year performance period, which was revised down from the $12 billion in savings the agency previously estimated.