New U.S. Medicare Drug Pricing Rules Take Effect, Only Four Drugmakers Subject to Constraints
nashnova research
CMS finalized its GLOBE drug pricing model, but with 14 major drugmakers already exempt through MFN deals with the Trump administration, only four companies remain subject to the rule — and projected savings have collapsed from $11.9 billion to just $440 million.
What does this rule actually do?
CMS (Centers for Medicare & Medicaid Services) published the final GLOBE model (Global Low-cost Benchmarking to Enhance drug pricing), targeting lower prices for Medicare Part B drugs — those administered in doctors' offices, such as injections.
The model launches January 1, 2027, runs through March 31, 2032, and covers 25% of beneficiaries whose primary insurance is original Medicare.
This means → it targets a specific, narrow slice of Medicare drug spending, not the full pharmacy benefit.
Why did $11.9 billion shrink to $440 million?
The proposed rule last year projected savings of roughly $11.9 billion. The final rule cuts that to $440 million — a drop of over 96%.
Two factors drove the collapse: the final rule excludes orphan drugs, plasma-derived products, and certain cell and gene therapies; and most major drugmakers secured MFN (most-favored-nation pricing) exemptions.
In plain terms = the rule still exists, but the drugs and companies it can actually reach have shrunk dramatically — most of its pricing power was negotiated away before it took effect.
14 exempt, 4 constrained — who is who?
Fourteen drugmakers have signed MFN agreements with the Trump administration and are expected to be exempt: Eli Lilly, Novo Nordisk, AstraZeneca, Merck KGaA, AbbVie, Merck, GSK, Gilead, Sanofi, Bristol Myers Squibb, Novartis, J&J, Roche, and Amgen.
CMS specifically named Eli Lilly and Pfizer as companies likely to qualify for exemption.
This means → nearly every major global drugmaker has sidestepped the rule. The four companies still subject to it have not been publicly identified, leaving the rule's real bite uncertain.
What comes next?
A separate rule called the GUARD model (Guaranteeing Upfront Access to Reduce Drug prices) remains at the proposed stage — not yet finalized.
How much GLOBE ultimately saves depends on how many more drugmakers secure MFN exemptions — if more sign on, even the $440 million estimate will shrink further.
This reflects a broader pattern in US drug pricing policy: not a universal price cap, but company-by-company negotiation for voluntary price cuts — making the policy's impact entirely contingent on deal-making progress.
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