The GLOBE Model is Likely to Disappoint Patients
Two new studies assessing the Global Benchmark for Efficient Drug Pricing (GLOBE) model, which reportedly aims to reduce prescription drug costs for Medicare beneficiaries, raise serious questions about whether the proposal will deliver meaningful savings for Medicare beneficiaries.
A study by Magnolia Market Access found that, when both traditional Medicare Part B and Medicare Advantage beneficiaries are included, the model would generate savings of $0.43 per beneficiary per year. For most patients, that translates to 0.02% of patients’ monthly premiums.
Separate research from Avalere Health similarly found that the model’s direct impact on patients would be extremely limited, estimating that only about 700 fee-for-service beneficiaries would see changes in their out-of-pocket costs. That represents approximately 0.0025% of all Medicare beneficiaries.
While the projected savings are minimal, the potential consequences for medical innovation are far more significant. Developing a new medicine requires substantial investment, often taking 12-15 years and more than $2 billion to bring a treatment from discovery to patients. Policies like the GLOBE model could introduce additional uncertainty into the research and development ecosystem, discouraging investment in future therapies, particularly those intended to serve Medicare populations.
Without the competitive edge of new discoveries, other countries like China will gain leadership in global medical innovation, leaving American patients — including many of those enrolled in Medicare — behind.
Patients should not have to choose between affordability and innovation. Policymakers should pursue solutions that improve access to medicines while preserving the incentives that drive new breakthroughs. Both goals are essential to ensuring patients benefit from today’s treatments and tomorrow’s cures.
WWFH continues to urge CMS to reconsider the GLOBE model and calls on lawmakers to advance reforms that address affordability concerns without compromising the innovation ecosystem that patients depend on.
Read more about the GLOBE Model and WWFH’s position on this issue here: