GLOBE & GUARD MODELS

▪ GUARD eligible products must also have annual application-level total gross covered drug costs above the GUARD minimum spend threshold of $69M (to be adjusted for inflation in performance years).

• Excluded Products

  ▪ Products excluded from the GUARD model include:

  ▪ Generics and biosimilar biological products;

  ▪ Drugs that are subject to an MFP under the Medicare Drug Price Negotiation Program.

▪ Sole-source drugs and biologics below the GUARD minimum spend threshold;

▪ Drugs that are subject to an MFP under the Medicare Drug Price Negotiation Program

• GUARD Rebate Calculation

▪ At a high level: The total GUARD Model rebate amount is calculated by multiplying the per-unit GUARD Model Rebate amount for a performance year by the total units of the GUARD Model drug dispensed under Part D within GUARD Model geographic areas during that year.

▪ The per unit GUARD Model Rebate amount is derived from the difference between the performance year Medicare net price of a GUARD Model drug and the GUARD Model applicable international benchmark. The applicable international benchmark is derived from one of two methods:

▪ The default benchmark (Method I) is the lowest price among country-level average prices for reference countries, adjusted by GDP, and may be either volume-weighted or not.

▪ The updated benchmark (Method II) is a volume-weighted across-country average net price for international analogs in reference countries, adjusted by GDP and submitted by manufacturers.

▪ Billing units for drugs claimed with a 340B modifier and paid under Part D are excluded from the total rebate amount.

▪ To ensure de-deduplication with the Part D inflation rebates, CMS also proposes to separately calculate an “incremental GUARD Model rebate amount” that would represent the amount of the total GLOBE Model rebate amount that is in excess of the rebate amount for the Medicare Part D Drug Inflation Rebate Program that applies to the total number of GUARD Model billing units.

▪ The reference countries for GUARD:

▪ Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the UK.

GLOBE Analysis

• General Provisions

▪ The GLOBE Model proposes a 7-year test period from October 1, 2026, to September 30, 2033, consisting of 5 performance years followed by 7 payment years.

▪ CMS will randomly select geographic regions to represent 25 percent of Medicare FFS beneficiaries as model participants.

▪ The proposal mandates that all manufacturers of GLOBE Model drugs must participate in the GLOBE Model.

▪ The proposal does not currently consider exclusions for manufacturers of eligible GLOBE products, even if the entities are not responsible for a product’s international sales.
“We considered excluding manufacturers where the U.S. manufacturer may not be the same entity that is responsible for sales in other countries. Another option we considered was to accept manufacturers that had existing sales or licensing agreements with other entities outside of the U.S. to sell GLOBE Model drugs before the publication of this NPRM. However, we were concerned about the possibility of manufacturers transferring responsibilities to other entities to avoid model participation. We also considered an application process through which a manufacturer could qualify for a model exemption, given their lack of responsibility for sales of drugs outside of the U.S. However, given the complex nature of manufacturer relationships outside of the U.S., such an exclusion might potentially be too broad, diluting CMS’s ability to rigorously evaluate the model’s impact on costs and quality. Having considered these alternatives, CMS is not proposing such exclusions. We also seek comment on other factors, for example, manufacturer size, that CMS could consider exempting certain manufacturers while maintaining sufficient model participation and a robust model test.”

• Eligible Products

▪ GLOBE eligible products must be a single-source drug or biologic product in the following class as defined by the 2025 USP Drug Classification: antigout agents, antineoplastics, blood products and modifiers, central nervous system agents, immunological agents, metabolic bone disease agents, or ophthalmic agents.

▪ To qualify as a GLOBE eligible product, a drug or biologic’s Medicare FFS Drug spending must exceed $100M over 12 months.

• Excluded Products

▪ Drugs and biologics excluded from the GLOBE Model include:

▪ Drugs with an active MFP under the Medicare Drug Price Negotiation Program.

▪ Drugs which do not meet the definition of a Part B Rebatable product, such as: (1) qualifying biosimilar biological products (2) products with historically excepted grouped billing and payment codes (3) products billed under a “not otherwise classified” (NOC) code (4) radiopharmaceutical drugs and biological products (5) skin substitutes (6) drugs with average total allowed charges under the applicable threshold [$100] (7) certain vaccines and other products (8) generic drugs.

▪ CMS is considering excluding Cell and Gene Therapies from the GLOBE Model based on feedback from the public comment period.

• GLOBE Rebate Calculation

▪ The GLOBE Model proposes two “per unit GLOBE Model benchmarks” that would be used to calculate a “per unit GLOBE Model Rebate amount.” Ultimately, the “per unit GLOBE Model Rebate amount” would be multiplied by “the total number of GLOBE Model billing units” to calculate the full GLOBE model rebate that would be paid into the Supplementary Medical Insurance Trust Fund.

▪ The first benchmark method (per unit Method I) involves calculating the GDP-adjusted lowest country-level price among reference countries, while the second benchmark method (per unit Method II) uses the volume-weighted average of manufacturers’ international net pricing submitted voluntarily.

▪ CMS will select the higher of the two benchmarks for each drug, and where only one is available, that will be used.

▪ An add-on percentage, ranging from 3% to 8% depending on market circumstances and the method of benchmark calculation, would be added to the initial benchmark.

▪ Billing units for drugs claimed with a 340B modifier and paid under Part B are excluded from the total rebate amount.

▪ To ensure de-deduplication with the Part B inflation rebates, CMS also proposes to separately calculate an “incremental GLOBE Model rebate amount” that would represent the amount of the total GLOBE Model rebate amount that is in excess of the rebate amount for the Medicare Part B Drug Inflation Rebate Program that applies to the total number of GLOBE Model billing units.

▪ Reference countries are the same as in the GUARD model: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the UK.