PhRMA sues to block Medicare's GLOBE pilot tying Part B rebates to 19 countries' prices

The Pharmaceutical Research and Manufacturers of America (PhRMA) has sued the Trump administration over GLOBE, the mandatory Medicare Part B pilot that ties drug rebates to prices in other countries. The complaint was filed in the US District Court for the District of Columbia and announced on 7 October 2026 ¹².

What the complaint argues

The Centers for Medicare and Medicaid Services (CMS) finalised the Global Benchmark for Efficient Drug Pricing (GLOBE) model only days before the suit ¹. GLOBE changes how inflation rebates are calculated in Part B, which covers high-cost drugs given by physicians, often in hospital outpatient settings. It uses prices in 19 reference countries to set the rebates manufacturers must pay, and it is due to take effect at the start of next year ¹.

PhRMA's case rests on statutory authority. The trade group argues that the pilot goes beyond what CMS may do and "effectively limits Medicare drug prices to MFN benchmarks" ¹. It says the model skips the requirements for testing a new payment model because it "predetermines the outcome through mandatory manufacturer rebates" ¹. It also claims GLOBE rewrites Medicare's statutory rebate framework and imposes monetary penalties that CMS cannot introduce without Congress ¹.

Stephen Ubl, PhRMA's president and chief executive, said "CMS cannot rewrite the law and bypass Congress to impose foreign price controls" ¹. Ubl is stepping down and Eric Cantor takes over on 9 November ¹.

What it means for the market

The direct financial stakes are small. The final rule applies to only four companies ³. Companies that signed the administration's voluntary deals to offer most-favoured nation (MFN) prices to Medicaid are exempt ²³. CMS now models $440 million in savings, against an original estimate of $11.9 billion ¹. STAT reported that the pilot is not expected to have much impact for this reason ².

The suit matters more as a test of precedent. PhRMA is thought to be fighting hard because it fears GLOBE could become a pathfinder for other MFN schemes ¹. The most obvious candidate is GUARD, a companion model for Part D, the outpatient prescription benefit used by more than 50 million older adults ¹. GUARD is still at the proposed stage ³. Both pilots sit alongside GENEROUS, a voluntary MFN framework for manufacturers in the Medicaid Drug Rebate Programme, whose participants receive waivers from GLOBE ¹.

For pharma companies, the structure now has two tracks. Those inside the voluntary deals are shielded from the mandatory pilots, while the few outside face rebates benchmarked abroad. A court ruling that CMS exceeded its authority would weaken the mandatory track and, with it, the leverage behind the voluntary one. A ruling the other way would leave the template in place for Part D. For companies selling outside the US, the design also makes list prices in the 19 reference countries a direct input to Medicare rebates ¹.

The complaint also argues that GLOBE will reduce investment in research and development and could limit patients' access to medicines ¹. Those are PhRMA's claims and the sources give no independent estimate of either effect.

Caveats

The case has only just been filed, and the sources report no ruling or timetable for the court. The savings figures are CMS projections. The sources do not name the four companies within GLOBE's scope. GLOBE is set to start at the beginning of next year unless the court intervenes ¹.