CMS finalizes GLOBE drug model. Map your Part B exposure now
- Posted by Greg Wahlstrom, MBA, HCM
- Posted in Blog
CMS has finalized GLOBE, a mandatory model that ties Medicare Part B drug rebates to international prices in a quarter of the country, and hospital outpatient pharmacy leaders should start mapping their exposure now.
What the final rule does
The Global Benchmark for Efficient Drug Pricing (GLOBE) Model, announced by CMS on Sept. 30 and published in the Federal Register on Oct. 2, tests a new way to calculate Part B drug inflation rebates. For selected drugs, the rebate is based on an international benchmark drawn from prices in economically comparable countries rather than on U.S. price growth alone.
- Scope: Certain separately payable Part B drugs and biologics, the clinician-administered products common in infusion centers and hospital outpatient departments.
- Geography: Randomly selected areas covering about 25% of beneficiaries in Original Medicare.
- Timing: The model runs five years starting Jan. 1, 2027. Beneficiaries may see lower out-of-pocket costs beginning April 1, 2027, and manufacturer rebate reconciliation continues into 2034.
- Exclusions: Biosimilars and their reference products once a biosimilar is on the market, orphan-only drugs, plasma-derived products and certain cell and gene therapies. CMS added the last three exclusions after public comment.
Where hospitals fit
The rebate obligation falls on manufacturers, and CMS has not described new duties for providers. Hospitals are still close to the action. Lower coinsurance changes what patients owe at the point of care, so billing and patient estimate tools in selected areas will need to reflect it. Manufacturers facing larger rebates may also respond through pricing, contracting or distribution decisions that ripple into hospital acquisition costs and 340B economics.
Because the selected areas are random, two hospitals in the same system could fall on opposite sides of the line, which complicates system-wide pharmacy strategy and patient communication.
What to watch
The final rule takes effect Nov. 30, and CMS will identify the participating areas before the model begins. Until then, finance and pharmacy teams can rank their highest-volume Part B drugs, flag those likely to be in scope and estimate how coinsurance changes would affect collections and patient estimates.
Executive takeaway: Ask your pharmacy and revenue cycle leaders for a short GLOBE exposure analysis now, so you are ready to act the day CMS names the selected areas.