As background, the 2020 Most Favored Nation (MFN) Model was a CMS initiative to cut Medicare Part B drug costs by pegging U.S. reimbursement rates to the lowest GDP-adjusted prices in comparable countries. It targeted 50 high-cost drugs and aimed to save billions over seven years. However, it was quickly blocked in court and as a result, the rule never took effect.
Unlike the 2020 interim final rule (which was mandatory and triggered lawsuits), the 2025 approach starts with voluntary compliance by manufacturers, backed by enforcement threats if they fail to comply. In 2025, the White House made deals with Pfizer, Eli Lilly, Novo Nordisk, AstraZeneca, and EMD Serono. These deals have often included:
- Direct to Patient (DTP) Access Via “TrumpRx”
- Medicaid MFN
- Future Drug Launches at MFN Pricing
- Shared Savings
- Onshoring
GENEROUS Model
The GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid), released November 2025, is a CMS Innovation Center demo that will test supplemental rebates to achieve MFN pricing under Medicaid for covered outpatient drugs. This is voluntary for states and manufacturers and begins in 2026.
- On December 30, 2025, CMMI updated the GENEROUS Model to include language granting CMS discretion to “waive or modify the applicability of other CMMI Models or Model requirements” to ensure accurate evaluation of GENEROUS. In other words, large manufacturers who made deals with the Administration and participate in GENEROUS will be exempt from GLOBE. These waivers will be documented in participation agreements between CMS and manufacturers.
GLOBE Model
Global Benchmark for Efficient Drug Pricing (GLOBE) – Part B
GLOBE proposes a new Medicare payment model to test an alternative method for calculating Part B inflation rebate amounts for certain Medicare Part B drugs and biological products. GLOBE targets approximately 25% of Medicare fee-for-service (FFS) beneficiaries who reside in randomly selected geographic areas. Participation in the model is mandatory for manufacturers of GLOBE Model drugs. While providers and suppliers continue to bill and receive payment as usual, beneficiaries within the model cohort see reduced coinsurance, lowering their out-of-pocket costs.
- The model tests two alternative rebate calculation methods:
- Method I: Uses the lowest international price among a set of economically comparable countries, adjusted for purchasing power parity (PPP).
- Method II: Uses voluntary manufacturer-submitted international net pricing data to calculate a volume-weighted average international price.
- The greater of the two benchmarks is used to calculate the rebate amount.
- GLOBE includes Part B rebatable drugs that are single source or sole source biological products within specific therapeutic categories such as oncology and immunology. To qualify for inclusion, these drugs must have Medicare Part B fee-for-service (FFS) spending exceeding $100 million over a 12-month period. Beneficiaries eligible for the model are identified based on their residence in the selected geographic areas and enrollment in traditional Medicare Part B FFS. Those enrolled in Medicare Advantage plans or who have other primary coverage are excluded from the model.
- GLOBE is a 5-year model, which would launch on October 1, 2026, and run through 2031, with rebate invoicing and reconciliation continuing into 2033.
GUARD Model
Guarding U.S. Medicare Against Rising Drug Costs (GUARD) – Part D
GUARD also proposed a new payment model to test an alternative method for calculating inflation rebates for certain Medicare Part D drugs and biological products, focusing on sole-source drugs and biologicals within specific therapeutic categories. The model targets approximately 25% of Medicare Part D enrollees residing in randomly selected geographic areas and requires mandatory participation from manufacturers of included drugs.
- The model introduces two international benchmarking approaches, one based on the lowest country-level average price adjusted for purchasing power parity, and another based on manufacturer-submitted international net pricing data, to establish alternative rebate amounts.
- Manufacturers pay rebates when the Medicare net price exceeds the international benchmark, with payments deposited into the Medicare Prescription Drug Account. The model includes detailed reporting, reconciliation, and enforcement provisions, along with robust quality monitoring and beneficiary protections to ensure access to medications is maintained. The model also coordinates with existing programs such as the Medicare Drug Price Negotiation Program and the 340B Drug Pricing Program to avoid overlap and ensure program integrity.
- GUARD would be tested over a 5-year performance period that would launch January 1, 2027, and run through December 31, 2031, with rebate invoicing and reconciliation continuing into 2033.