What you need to know

Prime Therapeutics (Prime) is tracking two new developments that are shaping the drug pricing and affordability landscape. First, last Friday the White House announced the expansion of its Most Favored Nation (MFN) initiative with new agreements from nine major manufacturers and signaled a broader affordability push.

Additionally, the Centers for Medicare and Medicaid Services (CMS) is preparing two proposed models, Global Benchmark for efficient Drug Pricing (GLOBE) (applicable to Part B) and Guarding U.S. Medicare Against Rising Drug Costs (GUARD), (applicable to Part D) that would apply international pricing benchmarks to existing Medicare inflationary rebates created by the Inflation Reduction Act (IRA). 

Overview

The drug pricing landscape continues to evolve rapidly, with recent significant developments announced at both the regulatory and administrative levels. Provided is an overview of each initiative.

MFN expansion highlights

President Donald Trump unveiled the largest expansion yet of the administration’s MFN drug pricing initiative, adding nine major pharmaceutical manufacturers and signaling a new push on health insurance affordability. Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech, Gilead, GSK, Merck, Novartis and Sanofi have signed agreements, bringing the total to 14 of 17 firms that were the recipients of letters from the Administration over the summer. 

Discounts for select therapies will also be offered through TrumpRx, a direct-to-consumer (DTC) platform launching early next year. These agreements also include measures that are intended to reduce drug costs in Medicaid and have included, in some cases, commitments from pharmaceutical companies to reinvest in U.S. manufacturing, repatriate foreign revenues, and donate key drug ingredients to bolster national resilience. In exchange for these commitments, the companies will receive a three-year tariff suspension.

Stakeholders are continuing to seek clarity on the scope, mechanics and operational impact of MFN pricing, including which drugs will be covered, how prices will be set, how rebates and reimbursement will function and how MFN will interact with other federal pricing reforms. President Trump also stated his desire to personally meet with health insurance CEOs to press for affordability measures beyond drug pricing.

CMS proposed models: GLOBE and GUARD

CMS has published two Notices of Proposed Rulemaking introducing mandatory Innovation Center models, GLOBE (Part B) and GUARD (Part D), that would modify Medicare inflationary rebate calculations by incorporating an international pricing benchmark alongside the current inflation-based benchmark. These models aim to reduce U.S. drug spending for high-cost, low-competition drugs by applying external reference pricing. The models build on inflationary rebate provisions from the Inflation Reduction Act (IRA) and would apply a new international benchmark when it results in a higher rebate than the current inflation-based calculation.  

• Scope: Single-source drugs and sole-source biologics in defined therapeutic categories; excludes drugs in the Medicare Drug Negotiation Program.
• Timing: GLOBE begins October 2026; GUARD begins January 2027, each with five performance years.
• Impact: Manufacturers may adjust pricing strategies, which could have downstream effects on PBM-negotiated rebates, plan bids, and manufacturer contracting. 

Prime's response

No action is required from clients at this time. Prime is actively monitoring these developments and will: 

• Update the DTC analysis to include and evaluate which newly announced drugs are likely to fall within MFN scope and compare average net cost and member’s average cost share to the cash price.
• Identify drugs that may be in-scope for the GLOBE and GUARD models to assess potential rebate impacts.

These analyses should be available by mid-to-late January 2026. Prime will continue to closely monitor these situations and share updates as they become available.

Questions

Reach out to your Prime account team representative.