February 23, 2026
Centers for Medicare & Medicaid Services
Attn: Dr. Mehmet Oz, Administrator of the Centers for Medicare and Medicaid Services
Submitted via https://www.regulations.gov/
Introduction
On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, we write with brief remarks on CMS-5545-P, which seeks comments on the Global Benchmark for Efficient Drug Pricing Model (GLOBE), a new Medicare payment model under section 1115A of the Social Security Act. While controlling federal health spending on drugs is an important policy goal, the proposed GLOBE model imposes a mandatory international reference pricing regime that is underpinned by price controls rather than market signals. Pursuing such an approach may produce budgetary savings in the short-term, yet price controls would invariably threaten America’s biomedical leadership and patient welfare in the long-term by blunting incentives for drug development. The Centers for Medicare and Medicaid Services (CMS) should reject this approach and work with Congress to pursue market-oriented reforms that preserve incentives for medical innovation, and, with them, the promise to “bend the cost curve” for taxpayer-backed health programs that are by far the biggest drivers of government spending and debt.
Overview of the GLOBE Model
The GLOBE model would assess most favored nation (MFN)-based rebates from manufacturers for certain Medicare Part B drugs if prices exceed those paid in a group of developed countries. Participation in the model would be mandatory for eligible manufacturers, and the program would be implemented across randomly selected geographic areas encompassing approximately 25% of Medicare Part B beneficiaries. Eligible drugs include single-source drugs and sole-source biological products with over $100 million in annual Part B spending, with limited exemptions. The GLOBE model includes important exclusions, as its rebates do not affect provider reimbursement under Medicare Part B and do not apply to the 340B program. Beneficiaries enrolled in Medicare Advantage are not included in this model.
Manufacturers have two options for calculating the MFN pricing benchmark. First, CMS may use the lowest price among the reference countries, based on publicly available and proprietary data. Alternatively, manufacturers may choose to submit international net pricing data, in which case the MFN benchmark would be based on the volume-weighted average among the reference countries. The reference countries include: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the United Kingdom. This model is set to be a 5-year program, which would start on October 1, 2026 and continue until 2031, with rebate invoicing and reconciliation continuing until 2033.
The GLOBE Model Functions as an International Price Control
The GLOBE model effectively operates as a price control by tying Medicare Part B drug reimbursement to prices set in foreign health systems that rely heavily on government mandates instead of market competition. Nearly all the reference countries used to establish the model’s benchmarks employ aggressive government price controls that result in delayed patient access to new therapies. Setting drug prices below the cost of research and development doesn’t lead to increased efficiency, it simply discourages private investment in medical innovation.
Addressing the disparity in drug prices between the U.S. and other developed countries is a valid concern for policymakers. Yet resolving this imbalance doesn’t require importing the failed policies of countries that ration care and limit treatment options for patients, but instead putting an end to foreign freeloading on American innovation. By imposing reimbursement caps that suppress prices through administrative fiat, foreign health systems effectively shift a disproportionate share of research and development costs onto U.S. patients and taxpayers. Making developed countries pay their fair share would restore balance to the global pharmaceutical market without risking the incentives that lead to new drug discoveries for patients—and, ultimately, better fiscal outcomes for taxpayers, who would see long-term costs in government health programs reduced through fewer doctor visits, surgeries, and hospital stays.
Indeed, as NTU has commented in other settings, a much more productive policy direction for American taxpayers would be to insist on burden-sharing from other nations, rather than to emulate their command-and-control mindset. Nearly all of the countries in the GLOBE “basket” are linked, in one degree or another, to socialized medicine systems characterized by:
- Innovator drug access rates for patients that are far less than in the U.S. Generally, the United States is “first and most” when it comes to regulatory approvals and payment reimbursement coverage of new drugs. Depending upon how these factors are measured, it is common for availability in other countries to be 50% less than here (some countries’ rates are even lower).1
- Poor market penetration of low-cost generics and biosimilars. In the U.S., more than 90% of prescriptions filled are for generics, an advantage that is unmatched by any of the major countries that would be included in a reference pricing scheme such as MFN.2 As NTU has noted many times in the past, no other country in the world can boast of a policy environment which provides so much access and so much affordability at once.3 This elegant balance would be severely compromised under MFN.
- In a supreme irony, some nations such as the Republic of Korea and Canada already employ reference pricing based on other countries’ rates for drugs. Yet, in these two cases, U.S. prices are deliberately omitted from the measurement. For example, if the MFN contemplated under Executive Order 14297 were to include Korea and Canada, the “freeloading” effect that the Trump Administration seeks to diminish would actually increase, effectively becoming a double subsidy for price-controlled nations and a double penalty on the United States. Surely this is not the result that policymakers here would want for their citizens.
- Whereas typical waiting periods for U.S. patients to be reimbursed for innovator drugs after their global launch is measured in a few months, the wait times in the EU, Canada, and Australia can often be measured in years. Again, in an ironic upshot, this gap only delays the systemic cost savings in obviated hospital stays, surgeries, and other therapies, so that socialized medicine systems must resort to rationing care as a cost control measure.4
More direct comparisons have been calculated to illustrate the wedge that exists between the United States and “free-rider” countries’ commitments to health care breakthroughs. No Patient Left Behind, a nonprofit consortium of patient advocates, researchers, and business partners dedicated to health care access, utilized independent data from respected sources such as RAND to create a free-riding margin that could be described as similar in function to a “tax” paid by Americans for the benefit of other countries’ health care systems:
Wealthy foreign countries, particularly in Europe, rely on government-established ‘health technology assessments’ (HTAs) to artificially undervalue breakthrough innovations that purposefully omit quantifiable, real-world values.5 These HTAs use faulty and outdated methodologies to routinely set drug prices far below the actual societal and economic benefits new medicines deliver, often by more than 90%.6
This systematic undervaluation by foreign HTAs has significant economic implications. A recent analysis indicates that these wealthy nations are effectively paying only about 30% of U.S. net prices7 for innovative medicines, despite having economies that justify paying substantially more. Based on GDP per capita at purchasing power parity (PPP), fair pricing suggests these countries should be paying approximately 74% of U.S. net prices. This 44% discrepancy (or 26% on a US list price basis) translates to a staggering freeride of roughly 60%.8
No Patient Left Behind compiled a variety of “Free-riding Indices” for numerous countries, including Canada (50%), Germany (64%), and Australia (70%). Once more, these and other price-controlled, socialized medicine regimes could serve as the arithmetic backbone for MFN.
In short, MFN-style policies miss the mark when it comes to addressing drug-price disparities between the United States and other nations. Exporting free-markets, rather than importing price controls, should be the guiding principle for this Administration.
No Meaningful Savings for Medicare Beneficiaries
In addition to undermining patient access to innovative drugs, the GLOBE model is unlikely to deliver any tangible financial relief to most Medicare Part B enrollees. The vast majority of Medicare Part B Fee-for-Service beneficiaries already have supplemental coverage, which protects them from most out-of-pocket costs. This means reductions in list prices for Part B drugs would fail to translate into significant out-of-pocket savings for patients.
Moreover, the GLOBE model fails to meaningfully address the structural drivers of high drug prices. Imposing the burden of rebates solely on drug manufacturers while leaving other actors such as pharmacy benefit managers, insurers, and hospitals exempt from any scrutiny leaves ample room for these intermediaries to continue rent-seeking by exploiting reimbursement structures to increase their profits without delivering additional value to patients.
Legal and Statutory Concerns
The GLOBE model is a blatant exercise in government overreach. Congress authorized the Center for Medicare and Medicaid Innovation (CMMI) to test innovative payment models that promote efficiency while preserving quality for patients, not to impose sweeping price controls that effectively rewrite Medicare reimbursement policy. Federal agencies have limited authority to administratively impose financial penalties, and CMMI has never done so unilaterally. Yet the GLOBE model compels participation by manufacturers through the threat of severe financial penalties. By transforming what should be a voluntary experiment into a mandatory regulatory regime, this approach raises serious legal concerns about the improper expansion of the administrative state.
Here we must once again raise concerns over CMMI’s basic remit. In the past, NTU and its research arm, National Taxpayers Union Foundation, have criticized CMMI’s approaches to many demonstration projects because of (as one of our analysts put it) the “circularity” of the premise that Congress’s budget scorekeeping agency “‘expects’ CMMI to achieve savings because CMMI will ‘achieve savings.’”9 In a 2022 Policy Paper, NTU outlined some principles that CMMI demonstration projects could follow to achieve more helpful results.
- Limit the duration of CMMI demonstrations to as few as two years;
- Narrowly define, in the general criteria for CMMI phase 1 testing, “deficits of care,” “poor clinical outcomes,” and “potentially avoidable expenditures”;
- Require HHS to project that a model will, at minimum, be budget neutral before proceeding with phase 1 testing;
- Require public reporting on CMMI models within a specified period, rather than just in a “timely fashion”; and
- Require the CMS Actuary to certify net spending reductions, rather than mere budget neutrality, to approve phase 2 expansion.10
While the parameters of GLOBE’s proposed MFN regime could be stretched to meet some of these criteria, it would nonetheless seem to test the limits of a “demonstration” that CMMI’s undertakings were intended to follow. Furthermore, over the longer term, it is highly unlikely that GLOBE would produce systemic savings to taxpayers.
Conclusion
Eight years ago, more than 150 economists warned in an open letter to legislative and executive branch leaders:
“Implementing a reference pricing system in the United States would create price controls that bring with them the same types of harms these policies have caused in foreign countries, to the detriment of the health care system at large and investments in U.S. research and development.
“In this case, price controls can lead to a reduction in patient access to certain drugs, less investment in the research and development of new drugs, and cost-shifting that raises the prices of other therapeutics. Ultimately, patients will suffer as cures are delayed or entirely undeveloped, while taxpayers will be denied potential savings from drugs that could obviate more expensive treatments in government healthcare programs, and the investment of capital in development of new medicines.”
Unfortunately, the GLOBE model’s incentives run counter to this advice, and threaten the innovation that creates new treatments for patients—new treatments that can actually reduce taxpayer burdens from government health programs going forward. Prior experience with the Inflation Reduction Act’s Medicare Drug Price Negotiation Program has already demonstrated how price controls undermine patient access, medical innovation, and taxpayer savings, and MFN policies would only exacerbate those problems. Policymakers should reject the thinking that underpins this model and instead address the rent-seeking that actually drives high drug prices, such as spread pricing by PBMs, abuse of the 340B program by hospitals, free-riding from foreign socialized medicine systems, and barriers to access and affordability remaining in the U.S. system.
Instead of doubling down on international price controls, CMS should look to recent reforms enacted in the One Big Beautiful Bill Act that recognize the importance of preserving incentives for medical innovation. Congress’s decision to revise the Inflation Reduction Act by clarifying the orphan drug exemption from Medicare price negotiation reflects a growing recognition that price controls can deter investment in novel therapies. By protecting certain rare disease treatments from government-imposed price caps, these reforms help ensure that innovative medicines reach the patients who need them. CMS should follow this example by pursuing policies that encourage innovation rather than undermining it through MFN-style government mandates.
Thank you for the opportunity to provide these comments, and, if you have any questions, we are at your service.
1 See, for example: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/assessing-availability-of-new-drugs-in-europe-japan-and-the-us; https://phrma.org/blog/new-global-analysis-shows-patient-access-challenges-around-the-world#:~:text=Most%20of%20the%20delay%20in,reimbursement%20policies%20that%20value%20innovation; and https://gh.bmj.com/content/9/9/e015700.
2 For further details, see: https://pmc.ncbi.nlm.nih.gov/articles/PMC5594322/#:~:text=Generic%20Drug%20Market%20Shares%20and,the%20United%20Kingdom%20(83%25).
3 See, for example: https://www.ntu.org/publications/detail/hatch-waxman-drug-patent-law-meets-middle-age-and-taxpayers-can-celebrate.
4 For further analysis, see: https://www.americanactionforum.org/insight/single-payer-health-care-wait-times-a-feature-not-a-bug/; https://www.fraserinstitute.org/commentary/other-countries-with-universal-health-care-dont-have-canadas-long-wait-times; and https://www.aei.org/carpe-diem/whod-a-thunk-it-socialized-medicine-is-free-but-leads-to-really-really-long-wait-times/.
5 See https://www.degruyterbrill.com/document/doi/10.1515/fhep-2024-0014/html.
6 See https://www.nopatientleftbehind.org/resource-materials/ex-us-report.
7 See https://rapport.racap.com/all-stories/no-more-freeriding-great-american-drug-deal.
8 See the full analysis at: https://www.linkedin.com/pulse/time-end-foreign-free-riding-fix-global-imbalance-k1huf/.
9 See the 2018 National Taxpayers Union Foundation analysis from Doug Badger at: https://www.ntu.org/foundation/detail/resetting-the-scoreboard.
10 See the 2022 NTU analysis from Doug Badger, et al., at: https://www.ntu.org/publications/detail/center-for-medicare-and-medicaid-innovation-12-years-into-the-game-taxpayers-still-dont-know-the-score.