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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join host Jeff Byers, editors from Health Affairs Publishing, and guests as they discuss health policy’s most pressing news and trends.
Hello and welcome to Health Affairs This Week. I'm your host, Jeff Byers. We are recording on 10/29/2026. Couple of programming notes upfront. Health Affairs Publishing or the Health Affairs Journal more specifically is going digital only.
Jeff Byers:You can read more details about it on Health Affairs Forefront. We'll put a link to the show notes about that. I had a question for you all. Do you want to hear Health Affairs This Week on Thursdays? Are you fine with Fridays?
Jeff Byers:We've been doing this for six years. Does anyone care? Are you listening? Send me a note at communications@healthfares.org, or you can leave a comment in the show. If you're on Spotify, let me know.
Jeff Byers:We're thinking about doing that in 2027. For Health Affairs Insider, on November 17, we have a great event with Jetson Leader Lewis of Boston University and former deputy executive director of the White House Anti Fraud Task Force. He will be joining Health Affairs Publishing's very own Chris Fleming to get insiders up to speed on fraud policies and what to watch in the health care industry moving forward. Today on the pod, we're here to talk about Globe and Medicare Part b drugs. And to do that, we have Michael Gerber, our very own.
Jeff Byers:Welcome back to the podcast, Michael.
Michael Gerber:Jeff, thanks for having me. Glad to be here. And for the record, Thursday, Friday, it doesn't matter. I will listen whatever day you release.
Jeff Byers:Thank you. A true a true patriot. I appreciate that. Are you getting ready for the... How's your spooky season been going?
Michael Gerber:It's been going fine. Yeah. We're getting ready. We have... The kids have their Halloween parade today at school, although I believe they have to call it the fall fun parade because we can't officially say Halloween at the school.
Michael Gerber:Okay. Yeah. But they're they're getting ready.
Jeff Byers:Okay. Yeah. You know, it's the Halloween weekend this year. I can't remember the last time it happened, but I think it was in 2016 or 2017, if I recall.
Michael Gerber:That's right. And an extra hour of sleep after Halloween, which was always helpful.
Jeff Byers:Yeah. I don't know if that matters too much when you have kids. I don't know about you, but it will not matter in my household.
Michael Gerber:No. Not so much.
Jeff Byers:Well, it will be a weekend for the ages. Let's talk about drugs. CMS relatively recently finalized their drug payment model GLOBE for Medicare Part B. Michael, can you go over, like, quickly the main policies for this?
Michael Gerber:Sure. Yeah. GLOBE, stands for Global Benchmark for Efficient Drug Pricing, another one of those fun acronyms where they capitalize a few random words in the name of the policy. But, yeah, they they finalized the rule, so it's supposed to really get started, next year. And it's part of the administration and the president's real push to, to push this most favored nation idea for drug pricing.
Michael Gerber:You've probably heard the president has... Actually, it's one of the one of the issues he has prioritized, spoken about many times, which is that Medicare and other programs in The United States pay more for some prescription drugs than other countries pay. And so this is part of an effort to reduce those prices. So GLOBE specifically is for Medicare Part B. So that means it's not the medications that you might, you know, have sitting on your shelf at home, the pills you take.
Michael Gerber:It's more for more specialized drugs, the ones you might get in a doctor's office, chemotherapy, injections, things like that. And it... It's going to involve negotiation with some of the drug manufacturers to get the cost of the drug for the Medicare Part B program down to a benchmark that will be set by looking at, you know, I think it's around 19 other countries, sort of similar countries that will provide this benchmark.
Jeff Byers:Yeah. Thanks for that. You know, health policy is such a a wild, wild world. It takes you in places you never thought you'd go in some ways. I I never thought I'd hear the term most favored nations as much as I've heard it in the past year.
Jeff Byers:It's one of those thing... Or the past year or two, it's one of those things that's, like, definitely just creeped up into the health policy cultural consciousness bubbled up. One of the things I wanna point listeners to is that Rachel Sachs and Christy Martin published an article on Health Affairs Forefront regarding the globe and this Part B model. The title is called Administration Finalizes Medicare Part B International Reference Pricing Model. We'll put a link to the show notes in that.
Jeff Byers:And, yeah, you mentioned, Michael, that president Trump has, like, made drug policy and drug pricing one of his pillars for the administration in HHS, and we will have a end of year drug pricing report for insiders written by Stacy Dussetsina, so we're excited about that. We'll have more details when that becomes actually available. But for now, that finalized version of GLOBE, was a little bit narrower than expected. Is that right?
Michael Gerber:Yeah. The the final rule that they published, about a month ago now, was different than the proposed rule prior to that. You know, they always propose a rule. People can provide comments. So a a few of the changes, it That's democracy.
Michael Gerber:Yeah. Exactly. It made some broader exclusions. So the final rule, you know, it excludes some cell and gene therapies, biosimilars, and also orphan drugs, so drugs for rare diseases only. And then it also...
Michael Gerber:It basically exempted manufacturers so that the rule calls itself mandatory. It says it's a mandatory rule for the drugs that are included. But then it excludes manufacturers who are participating in the generous model, which is another fun acronym for the generating cost reductions for US Medicaid. So that is a similar, in some ways, program that's trying to negotiate better drug prices or lower drug prices, I should say, for Medicaid programs. And they recently announced that all 50 states are participating.
Michael Gerber:And it seems that one of the ways they also got many manufacturers to voluntarily participate in the generous model is that it may have exempted them from this otherwise mandatory model for Medicare Part b. So that's one of the big changes that I think surprised some people when when that happened.
Jeff Byers:Off topic, on generous, I think we're being real too liberal with how some of these acronyms work out. I'm looking at the generating cost reductions for U. S. Medicaid. The O in four is the one that's capitalized for, you know, to make the word generous, which if we're being generous is kind of
Michael Gerber:I agree. I agree. When you capitalize a middle letter in a word that wouldn't even be capitalized in the title, seems like a stretch. But, you know, yeah, I got to give credit to whatever team, you know, at CMS and, you know, other places around Washington that that have to come up with these acronyms. So, yeah, it is.
Jeff Byers:People just want something to quickly say and move on with their day. And, you know, hats off to
Michael Gerber:them.
Jeff Byers:Yep. So back to the issue at hand. So this has been toted. We've been talking about it as a most favored nation's policy. We've discussed this on the pod with Stacy before, but you've kind of already gone over this a little bit, but what essentially are the goals of most favored nation's policies?
Jeff Byers:This could always be someone's first episode to
Michael Gerber:the Yeah. I mean, again, as I said before, but the most favored nation really is to try to reduce the cost of drugs for Medicare and Medicaid in these cases, you know, for Medicare Part B specifically, which the globe model impacts. The cost of drugs has risen more for Medicare Part B than it has for commercial payers or Medicaid, according to some studies. And it's as we know, drug costs are just a huge reason for health care costs in general going up. And this idea that The US is paying more, I mean, it really, you know, it seems in some ways obvious that why should why should we pay more than some of these similar countries are paying?
Michael Gerber:I think, you know, some people in pharma would argue that someone has to pay for the actual cost of the drugs and for the R and D and development and research and everything that goes into it. So I don't think it's quite as simple as, you know, The US being gouged while other countries aren't. But there's maybe some of that too. It's hard to hard to really tell. There's also some disagreement, of course, as to where the true costs come from.
Michael Gerber:Is it the cost of the drugs? Is it the costs of sort of the middlemen, pharmacy benefit managers, prior authorization, all the things insurance companies do? But in this case, it really is just trying to use the prices from countries such as, you know, if you look at the list, it's The UK and Australia and South Korea and Germany and other countries that might have similar similar economic models or health care systems that we feel are comparable and getting prices down to match more what other countries are paying.
Jeff Byers:Before we get into like PBM reform potential, you mentioned pharma. I don't think you're talking about the organization. I think you're talking about big pharma, but pharma, the organization, we are going to talk about because they saw this finalization of this globe model and they thought not today.
Michael Gerber:Right. I mean, in general, it's not hard to see why both pharma as an industry and then specifically pharma, the trade association representing most of these pharmaceutical companies would not be happy about this, right? It's it's basically negotiating lower prices or it's all technical. So it might be higher rebates that they have to pay back. But in the end, you know, sort of less money that they might be receiving for the same drug from these government programs, which as we know, Medicare Part B is a huge source of patients and income for these companies.
Michael Gerber:So, yeah, within about a week after the final rule was announced, they filed a lawsuit here in D. C. In federal court. You know, they were successful actually in the first Trump administration at fighting one of the sort of similar, most favored nation programs, but sort of on a technicality. That program did not involve a comment period, as we talked about.
Michael Gerber:So they they were able to fight it on that. So now they're this one had a common period, so they're finding some other arguments in their lawsuit.
Jeff Byers:Well, thanks for providing that information regarding Globe and why some industry actors might not be too pleased with it. You know, when we look at this lawsuit, when we look at most favored nations policies going into 2027, what should we listeners, policy watchers be checking out?
Michael Gerber:Yeah. Well, I think, you know, in their lawsuit, pharma is asking the courts to act quickly because this is supposed to go into effect quickly. So we'll, first of all, see if there's any sort of, you know, effort by the the courts to just stop the program while they look at it more closely and provide some sort of injunction or relief temporarily. And then in the long term, under Farmers lawsuit, one argues that CMS is exceeding its legal authority that Congress has to set policy like this, which is always a debate whenever rulemaking happens. And I think is especially interesting now because recent decisions by the court that have sort of said that Congress needs to make these laws and we can't rely on agencies always.
Michael Gerber:CMS argues more that this is a test, you know, one of their innovations. It's not actually going into effect for every Part B. It's 25% of Part B beneficiaries. And then I think to see also as generous and globe, if they both get going, you know, again, these are being presented as pilots. So how they're evaluated and whether they show any of the cost savings that is being projected, obviously, will be something to look for in the next couple of years.
Jeff Byers:Well, Michael Gerber, thanks again for this information and joining us today on Health Affairs This Week. If you, the listener, enjoyed this episode, please share it with a spooky friend, and we will see you next week. Thanks all.