Final GLOBE drug model projects much smaller savings while 2027 Part D premiums split

CMS finalized a mandatory model this week that ties some Medicare Part B drug rebates to prices paid in other wealthy countries, according to a news release. However, the agency now expects the model to save far less than it first projected.

CMS estimates the Global Benchmark for Efficient Drug Pricing (GLOBE) Model will lower Medicare Part B spending by about $80 million a year, according to the final rule. When CMS proposed the model, it projected about $2.3 billion in yearly savings. Over the full payment period, which runs through 2034, the final estimate is $440 million.

The final rule came two days after CMS released its 2027 premium projections for Medicare Advantage (MA) and Part D plans. Those numbers show drug coverage costs moving in opposite directions for MA enrollees and people in stand-alone drug plans.

Medicare open enrollment runs Oct. 15 through Dec. 7.

How the GLOBE Model works for Part B drugs

Part B covers drugs that are typically given by clinicians in healthcare settings, such as infusions. Drugmakers already pay Medicare rebates when Part B drug prices rise faster than inflation. GLOBE tests a different rebate formula for selected drugs. It sets a benchmark using prices from 19 countries, including Canada, France, Germany, Japan and the United Kingdom.

The model starts Jan. 1, 2027, and runs for five years. It applies to about 25% of people with Original Medicare, chosen by random selection of ZIP code areas. MA enrollees are not included.

Beneficiaries in those areas may see lower out-of-pocket costs starting April 1, 2027.

Drugs in the model are single-source drugs and biologics with more than $100 million in yearly Original Medicare Part B spending in certain drug classes, including cancer drugs, immunological agents and eye drugs, the final rule notes. Drugs with a negotiated Medicare price are excluded, as are biosimilars and their reference biologics once a biosimilar enters the U.S. market.

Why CMS lowered the GLOBE savings estimate

CMS pointed to many changes between the proposed and final rules. In response to public comments, it excluded orphan-only drugs, cell and gene therapies and plasma-derived products. It also pushed the start date from October 2026 to January 2027.

The new estimate also assumes drugmakers that signed agreements for CMS’ GENEROUS Model by Aug. 17, 2026, will be waived from GLOBE, the final rule said. GENEROUS is a voluntary model, announced in November 2025, that is focused on lowering drug costs in Medicaid.

“CMS has determined that a manufacturer’s participation in the GLOBE Model could impact CMS’s ability to isolate the effects of the GENEROUS Model,” the agency wrote in the final rule. CMS did not write a formal exemption into the rule. It noted that changes in which drugmakers take part in GENEROUS would affect the GLOBE estimates.

In addition, projected savings for patients also shrank. CMS now expects beneficiaries to save $111 million in out-of-pocket costs over the model, including $50 million in coinsurance and $61 million in premiums. The proposed rule had projected $1.4 billion in coinsurance savings alone.

Fierce Healthcare reported that a companion model for Part D, known as GUARD, has not been finalized.

“Medicare Part B patients and American taxpayers have paid significantly more for prescription medications than people in comparable countries,” CMS Administrator Mehmet Oz, M.D., said in the release.

Part D premiums drop in MA plans, rise slightly for stand-alone plans

On the Part D side, the average monthly premium for drug coverage in MA plans is projected to fall 38% in 2027, from $11.32 to $7, CMS said in another news release earlier this week. The average premium for stand-alone prescription drug plans (PDPs) is projected to rise less than $1, from $35.09 to $36. That leaves PDP enrollees paying about five times more on average.

MA plans can use rebate dollars from their Medicare payments to lower or eliminate Part D premiums, according to a KFF analysis. Stand-alone plans do not receive those rebates.

This is also the first year PDPs will set prices without the Part D Premium Stabilization Demonstration, a temporary program that cost $9.8 billion over 2025 and 2026 and capped yearly premium increases, according to KFF. MHE reported in July that the 2027 base beneficiary premium would rise from $38.99 to $41.33.

“We urge beneficiaries to use Open Enrollment as an opportunity to review their coverage, compare options, and pick the plan that best suits their needs and budget,” Oz said in the release earlier this week.