Goodsurance

Drug prices & Part D

PhRMA Files Federal Lawsuit to Block Medicare's New International Drug Pricing Model

The pharmaceutical industry's main trade group sued the Trump administration on October 7, arguing that a new rule tying Medicare Part B drug payments to prices in other countries exceeds the government's legal authority.

By the Goodsurance editorial teamOctober 7, 2026

The Pharmaceutical Research and Manufacturers of America filed a complaint on October 7 in the U.S. District Court for the District of Columbia, asking the court to declare the Global Benchmark for Efficient Drug Pricing Model, known as GLOBE, unlawful and vacate the rule before it can take effect.

The Centers for Medicare and Medicaid Services finalized GLOBE in late September 2026. The model would test an alternative payment method for certain drugs and biologics administered under Medicare Part B, which covers infusions and injections given in a physician's office or clinic setting. Beginning in January 2027 and running through March 2032, the model would tie what Medicare pays for selected Part B drugs to prices charged in peer countries. It applies in a randomly selected subset of geographic areas covering roughly 25 percent of Original Medicare beneficiaries. Medicare Advantage enrollees are not directly affected.

PhRMA sued on October 7 to block Medicare's GLOBE drug pricing model. A court will now decide if it moves forward in January 2027.

CMS projected that the final version of GLOBE would produce net savings of 440 million dollars in Medicare Part B spending over the model's run.

PhRMA's complaint rests on three main arguments: that CMS used its demonstration model authority to impose a form of nationwide price-setting Congress never authorized, that the model alters the existing statutory rebate structure beyond what the agency is permitted to do, and that it raises constitutional questions about limits on delegated authority.

The lawsuit adds legal uncertainty to a model that was already narrowed substantially between the proposed and final versions. If the court grants PhRMA's request, the GLOBE model could be blocked or delayed before its planned January 2027 start.

In plain words

A group that speaks for drug companies filed a lawsuit on October 7, 2026. The lawsuit targets a new Medicare rule called GLOBE. GLOBE would change how Medicare pays for certain medicines given by a doctor or nurse, such as cancer drugs given through an IV or injection. The rule would set what Medicare pays based on what the same drugs cost in other countries, where prices are often lower.

The drug companies say the government does not have the legal right to set prices this way. A federal court will now decide if the rule can go forward. If the court stops it, prices for those Part B drugs would not change as planned. The rule was set to start in January 2027 for some Medicare patients in certain parts of the country.

Source: STAT News
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