Medicare will compare selected drug payments with prices abroad, then use the result to calculate manufacturer rebates and some patients' bills. The test is whether that approach can save money without making treatment harder to obtain.

The Centers for Medicare and Medicaid Services finalized the Global Benchmark for Efficient Drug Pricing Model, or GLOBE, on October 2. It will test an international price benchmark for certain expensive medicines that doctors administer in offices and hospital outpatient departments.

The model has two linked parts. One seeks money from drug manufacturers after Medicare pays a claim. The other lowers coinsurance for some patients when they receive treatment. Both rely on the same international benchmark, but they move money at different times and between different parties.

That distinction is the key to understanding GLOBE. The model does not directly cap a drug's price. It does not cover pills picked up at a pharmacy. It also does not cut the approved payment to the doctor or hospital administering the medicine.

Medicare Part B generally covers medicines administered by a clinician, including many infusions and injections used for cancer, autoimmune disease or eye conditions. Under the usual system, Medicare pays 80 percent of an approved amount and the patient is responsible for 20 percent. Private supplemental insurance may cover some or all of the patient's share.

Congress created the Medicare Part B Drug Inflation Rebate Program in 2022. Under that program, a manufacturer may owe Medicare a rebate when a drug's price rises faster than inflation. Since April 2023, patients have also paid lower coinsurance on certain drugs affected by that calculation.

GLOBE uses that existing framework but tests a different comparison. Instead of looking only at how quickly a drug's price rises in the United States, it asks whether Medicare pays more than health systems in other wealthy countries.

The first calculation happens between Medicare and the manufacturer. CMS compares Medicare's payment for a selected drug with its international benchmark. If the benchmark produces a larger rebate than the existing inflation calculation, the manufacturer owes Medicare the difference.

The second calculation affects the patient's coinsurance. CMS uses the GLOBE benchmark to set a lower patient share for an eligible drug. Medicare pays more of the claim so the provider still receives the full approved amount.

A simple example shows how that works. Suppose the approved amount for a treatment is $100. Under the usual split, Medicare pays $80 and the patient owes $20. If GLOBE lowers that patient's coinsurance to 10 percent, Medicare pays $90 and the patient owes $10. The provider still receives $100.

The manufacturer rebate is settled later. In other words, Medicare gives the patient immediate relief, covers the difference at the clinic and then tries to recover savings from the manufacturer. The patient discount and the manufacturer rebate are separate transactions connected by the same benchmark.

GLOBE targets selected high-spending, single-source Part B medicines and biological products in oncology, rheumatology, immunology, ophthalmology and endocrinology. A drug must generally account for more than $100 million in annual Original Medicare Part B spending to qualify.

The model excludes medicines once a biosimilar competitor enters the market. It also leaves out drugs used only for rare diseases, plasma-derived products, certain cell and gene therapies and medicines already subject to a negotiated Medicare price.

Medicare Advantage is outside the test. GLOBE applies only to Original Medicare and only in selected geographic areas.

CMS will randomly select ZIP Code Tabulation Areas containing about 25 percent of Original Medicare beneficiaries. Patients do not apply and cannot opt out. Whether the model affects a person's bill will depend on Medicare coverage, home address and medicine.

That geographic design means two patients receiving the same medicine could owe different amounts. One may live inside a participating area while the other lives across its boundary.

CMS will compare Medicare's payment with prices in 19 economically comparable countries. The agency describes two methods for setting the international benchmark.

The first uses commercial data and the lowest available price among the reference countries. The second allows a manufacturer to report its average net price across those countries voluntarily. A net price includes discounts or rebates that are not visible in a public list price.

The voluntary method can produce a higher benchmark than the commercial-data method. That would reduce the rebate owed by the manufacturer. CMS believes voluntary reporting can give it more accurate information about what foreign health systems actually pay.

The model begins collecting voluntary international price data on January 1, 2027. The rebate and coinsurance test begins April 1, 2027 and runs through March 31, 2032. Final reconciliation can continue until 2034.

GLOBE's most visible benefit is lower coinsurance for an eligible patient receiving a selected drug in a participating area. The final rule estimates that 94 percent of included drugs would carry patient coinsurance between 2 percent and 12 percent, below the usual 20 percent.

The benefit will vary by patient. Someone without supplemental coverage could save substantially on an expensive infusion. Someone with Medigap may see little or no change at the clinic because the policy already pays some or all of the Part B coinsurance. Medigap is private supplemental insurance used with Original Medicare. It is not Medicare Advantage.

CMS estimates $298 million in Original Medicare benefit savings and $111 million in beneficiary savings from lower cost sharing and premiums. Those estimates are much smaller than the proposal's projections. The final model reaches about one-quarter of Original Medicare beneficiaries, far fewer than the proposal contemplated. It also excludes more drugs.

The practical promise is therefore limited. Some patients with large out-of-pocket bills could save real money. Most Medicare beneficiaries will not receive a direct discount because their drug, coverage or address falls outside the test.

CMS Administrator Dr. Mehmet Oz argues that Medicare patients and taxpayers should not pay far more than comparable countries for the same medicines. From that perspective, an international benchmark gives Medicare leverage that other health systems already use.

Patients For Affordable Drugs also supports using international prices to lower drug costs. The patient group argues that the final model should have covered more drugs and manufacturers, not fewer. Its criticism begins from the view that a stronger benchmark would produce greater savings.

The design also protects clinicians from an immediate payment cut. Many practices purchase expensive medicines before administering them. Keeping the approved payment whole reduces the risk that a clinic stops offering a drug because Medicare pays less than the clinic spent to acquire it.

Finally, the randomized geographic design creates a comparison group. CMS can compare spending, treatment access and drug use in participating areas with similar areas outside the model. That gives the experiment a better chance of showing whether lower bills came from GLOBE or from unrelated changes.

The Pharmaceutical Research and Manufacturers of America, the industry's main trade group, argues that GLOBE exceeds CMS's legal authority and could reduce investment in future treatments. It also says the model may harm access without reliably passing savings to patients.

The National Health Council, whose members include patient organizations, said it could not support the proposed model. It argued that lower coinsurance on one claim does not guarantee that a patient will spend less overall. Premiums, supplemental benefits and coverage restrictions also shape what people pay.

The council also objected to the lack of a patient opt-out. If a manufacturer changes distribution or a clinic changes how it provides a drug, patients in a selected area could face new barriers before CMS's monitoring detects them.

There are practical objections as well. Commercial price data do not show every confidential foreign discount. Voluntary manufacturer data may be submitted only when doing so produces a more favorable benchmark. Patients near a geographic boundary may also question why the person across the line owes less for the same medicine.

Several groups support the goal while asking CMS to change the method. The American Hospital Association backed lower drug prices and payment-model testing but wanted participation to be voluntary. It also asked CMS to monitor whether manufacturers respond by increasing the prices hospitals pay to acquire medicines.

Public Citizen supported using international comparisons but argued that GLOBE should reinforce Medicare's separate drug-negotiation program. It also wanted fewer exclusions and stronger protections against manufacturers manipulating foreign prices.

The final rule contains some safeguards. It limits the test to about one-quarter of Original Medicare beneficiaries, excludes several sensitive drug categories and keeps provider payments whole. CMS says it will monitor drug availability and use every month once the payment test begins.

That creates a practical standard for judging the model. Patient bills should fall, Medicare should recover enough in rebates to cover its added payments and people should still receive the medicines their doctors prescribe.

The rule takes effect November 30, 2026. CMS will identify participating areas by January 16, 2027. Patients can then check whether their home area is included and ask whether a Part B medicine they receive is on the model list.

Reduced coinsurance, adjusted Medicare payments and access monitoring begin April 1, 2027. The clearest way to follow the experiment is to watch three results: what patients pay, what Medicare collects from manufacturers and whether use of covered medicines changes.

GLOBE will not settle the national argument over drug prices. It can answer a narrower question: Can Medicare use prices abroad to lower costs here without making treatment harder to get?

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