Drug Fix: CMS Finalizes GLOBE Model And US FDA Adcomm, Personnel Changes

First, let's talk about Globe.

Kathy, you dug into this for us.

Uh, tell us what happened, and hopefully don't use any astrophysics.

[laughs] I'll try.

Um, so Globe is, um, a demonstration program designed to test international reference pricing for drugs covered by Medicare Part B.

Those are the physician-administered drugs.

Um, it's been, [clears throat] it's been, uh, something that, uh, people have been watching for, um, particularly to see whether, uh, the majority of the pharma industry would be exempt from it, basically.

Um, for, for months, drug companies who have signed agreements with the Trump administration to implement, uh, international reference pricing, most favored nation pricing, as the administration calls it, um, in Medicaid and in other, uh, sort of aspects of their, their marketing, have been saying that they believe because they signed those agreements and, you know, are, are committed to doing, uh, most favored nation pricing in Medicaid, that they'll be exempt from Globe, and from a related, uh, and pending demonstration, um, for MFN pricing in Medicare Part D.

So in the final rule, CMS did confirm that companies who are participating [laughs] in a separate model called Generous, which is a model that covers, uh, most favored nation pricing in Medicaid, would be excluded from Globe.

Um, and that, then they disclose in the final rule that that leaves only about four, four manufacturers left who would be covered by Globe, and Globe, I should have said at the beginning, is a mandatory model.

It's not voluntary.

Um, so what was striking about that is how much, how diminished the, the Globe demonstration is by that exclusion.

The, the final rule also included other exclusions, such as, you know, orphan-only drugs wouldn't be covered.

Um, drugs with generic or bio- biosim- similar competition wouldn't be part of the model.

Um, drugs with Medicare negotiated prices wouldn't be part of the model.

And, and because of all those exclusions, and primarily the, the, uh, exclusion for generous participants, um, the potential savings for the rule was sharply reduced.

Um, CMS said that the demonstration is expected to save $400 million over the seven years that it will be in operation, and that compares with, um, projected savings of $11.9 billion, which CMS, uh, included in a proposed rule on Globe that was issued back in December.

So, you know, since, since the proposed rule came out, a lot of these most favored nation deals have been announced, and we can see now the upshot, um, of the, you know, what, what has resulted from those.

Um, the companies that appear to be still covered by the rule include Biogen and its Apellis subsidiary, Takeda, and Daiichi Sankyo.

That's based on information that was included in the rule.

Um, although, I think, you know, we should remember that that could change if these companies also finalize agreements with the administration.

Um, so we'll see what happens.

The, the rule has also been, you know, widely expected to be challenged in court.

Um, many of the industry comments on the proposed version of the rule, you know, claimed it would violate their constitutional rights, the Administrative Procedure Act, and other, you know, issue, issues.

Um, however, at this point [laughs] it's not clear how many individual companies would have standing to sue, to sue the agency.