The final GLOBE rule: Fewer products. Bigger questions

When CMS first proposed GLOBE, many in the pharmaceutical industry viewed it as the beginning of a broad US Most Favoured Nation style pricing experiment for Medicare Part B drugs.  The final rule tells a different story.

The immediate headline is not simply that GLOBE survived. It is that its expected reach and financial effect have become much smaller. CMS reduced its estimate of Medicare Part B net savings from $11.9 billion in the proposed rule to $440 million over the final rule’s seven-year payment period. It also added exclusions for orphan-only drugs, FDA-listed cellular and gene therapy products, and plasma-derived products. The final impact analysis also assumes that manufacturers with GENEROUS participation agreements would receive waivers from GLOBE’s mandatory participation requirements. CMS did not codify a GENEROUS exemption and instead, states that it intends to waive mandatory participation for a manufacturer for each calendar quarter in which that manufacturer participates in GENEROUS.

Taken together, these changes substantially narrow the expected reach of the model.

However, before pharmaceutical companies conclude that the policy risk has disappeared, there is a second headline that may ultimately prove more important. For the products that remain exposed, CMS preserved the feature that manufacturers were watching most closely: the Method I benchmark generally remains in place once established. In many ways, that decision transforms GLOBE from a broad policy concern towards a much more targeted, product-specific issue with implications for launch order sequencing in those assets that are exposed to the GLOBE model.

GLOBE is now a more targeted portfolio issue

One of the clearest messages from the final rule is that GLOBE should no longer be viewed as a broad risk across a company's entire Part B portfolio.

For most companies, the key challenge is no longer estimating the impact of GLOBE across dozens of products. It is identifying the relatively small number of assets that remain exposed after the eligibility criteria, product exclusions and any applicable manufacturer-level waivers have been considered.

Resources should now be focused on understanding where exposure remains, particularly when GENEROUS ends, rather than modelling a hypothetical impact across an entire business.

The final rule may also provide a directional signal for GUARD. While the Part D model remains proposed, the decision to retain 25% testing coverage and narrow GLOBE through new exclusions (e.g., orphan-only drugs) and GENEROUS waivers may indicate a similar approach when GUARD is finalised. CMS has also recognised the potential for some utilisation to shift between Parts B and D, which may make it difficult to treat the two models as entirely separate in practice. This remains a planning assumption until the GUARD final rule is published.

The new exclusions matter more than many headlines suggest

The addition of new exclusions has understandably attracted attention, but their significance extends beyond reducing the number of products that qualify. The orphan-only exclusion is particularly important. A product is excluded only where it has been designated for one or more rare disease indications and all its approved indications are for rare conditions. Having an orphan designation alone is not enough to qualify for the exclusion.

Why does this matter?

This distinction has important implications for lifecycle planning. A product's status may change over time if additional non-orphan indications are approved. Companies should therefore avoid assuming that the orphan-related exclusion is permanent and should continue to monitor how future indication expansion could affect eligibility.

The most important story is not what CMS changed. It is what CMS kept

The most strategically important aspect of the final policy may be the feature CMS chose to retain: the Method I benchmark lock-in. Once a Method I benchmark is identified that benchmark generally remains in place throughout the performance period, subject to the update provisions specified in the rule. At first glance this sounds like a technical detail. In reality, it fundamentally changes how manufacturers should think about international pricing risk.

Most international reference pricing systems focus on where prices are today. GLOBE places considerable importance on the period when the benchmark is first established. As a result, the benchmark-setting quarter may become more important than subsequent pricing developments.

For manufacturers, this shifts the conversation away from simply asking whether international prices are high or low. The more relevant question is: what pricing information is CMS likely to observe when Method I is first established?

Two products with similar mature international pricing positions could face different outcomes if the information available to CMS differs when their respective benchmarks are identified.

Why the Method I benchmark lock-in has been such a major industry discussion

One reason the Method I lock attracted so much attention is that it creates the possibility that early launch pricing dynamics could continue to influence price benchmarking for a 5 year period.

Under the German free pricing system, a manufacturer can initially set a price before the negotiated reimbursement amount takes effect. This has led to questions about whether pricing information observed during that earlier period could influence Method I if CMS establishes the benchmark during the same window.

Importantly, the final rule does not say that this will happen, nor should companies assume that it will. Whether Germany contributes to the benchmark depends on multiple factors, including when the product enters GLOBE, whether relevant German price data are available in CMS's selected source, and whether Germany ultimately produces the lowest GDP-PPP-adjusted country-level price.

However, the example illustrates why the Method I lock matters. An established benchmark can preserve the effect of pricing information associated with an earlier stage of the product’s international lifecycle. Later launches or price changes do not lead CMS to perform a general periodic reset of that benchmark during the pilot period of GLOBE.

That is why Method I persistence has remained one of the most discussed aspects of the policy since the proposal was first released.

Method II is a strategic choice, not just a calculation

The final rule also reinforces the importance of Method II. Manufacturers can voluntarily submit international net price and volume data. CMS then calculates Method II using the submitted data and applies the greater of the available Method I and Method II benchmarks under the finalized methodology. The discussion surrounding Method II often focuses on whether it can deliver a more favourable benchmark outcome. In reality, that is only part of the decision.

Participation requires recurring submissions, supporting documentation, data validation, attestations, and ongoing reporting obligations.  Method II therefore raises questions of governance, operational capability, validation and data disclosure, as well as price.

The key question for manufacturers is not simply whether Method II can improve the benchmark. It is whether the expected improvement is sufficiently valuable to justify the data agreement, quarterly submission obligations where applicable, supporting documentation and continuing governance requirements. For that reason, Method II should be evaluated as a strategic commercial decision rather than a purely mathematical exercise.

What pharmaceutical companies should be doing now

The final rule moves the industry beyond high-level policy monitoring and towards product-level assessment.

The most important questions now are relatively simple:

• Does the product satisfy every element of the GLOBE Model drug inclusion criteria?
• Does it fall within one of the final rule’s product exclusions?
• Is the manufacturer participating in GENEROUS, and would an applicable waiver cover the relevant quarter?
• When is the product expected to meet the Original Medicare Part B spending threshold?
• Which applicable quarter is likely to provide the pricing information used when Method I is first identified?
• Which pricing and volume information is likely to be available in the commercial sources CMS may use?
• Which country could produce the lowest qualifying GDP purchasing power parity-adjusted country-level price?
• Would Method II materially improve the applicable benchmark?
• If so, is that improvement worth the corresponding data, disclosure and governance requirements?

These are practical strategic questions with direct implications for pricing, launch sequencing, market access and internal governance.

The bottom line

The final GLOBE rule is not the broad Medicare pricing intervention many expected when the proposal was first released. CMS narrowed the model, reduced its projected impact and excluded several important categories of products. Yet the most consequential Method I feature survived.

As a result, the biggest lesson from the final rule is not that GLOBE became smaller. It is that GLOBE became more targeted and more strategic.

The manufacturers most affected will not necessarily be those with the largest Part B portfolios. They will be those with products that remain exposed and whose benchmark outcomes are sensitive to benchmark timing, international data availability and the Method II reporting decision.

For pharmaceutical companies, understanding those product-level dynamics is now likely to matter far more than understanding the headline savings estimate alone.