Schaeffer experts submitted comments to the Centers for Medicare and Medicaid Services (CMS) on two proposed drug pricing pilots: the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) model and the Global Benchmark for Efficient Drug Pricing (GLOBE) model. The proposed models would require manufacturers to pay rebates on certain Medicare drugs when prices exceed international benchmarks in European and other developed nations.
The commenters argued that both models suffer from fundamental design flaws that undermine their ability to achieve sustainable savings for Medicare beneficiaries while preserving pharmaceutical innovation. The models’ reliance on international price benchmarks makes them vulnerable to gaming by foreign countries, fails to address the underlying economics of global pharmaceutical markets, and cedes pricing authority to foreign governments with different healthcare values.
CMS should withdraw both models as proposed and instead pursue a comprehensive approach centered on establishing American value-based pricing benchmarks that:
- Reflect what drugs are truly worth to American patients based on rigorous economic analysis
- Incorporate outcomes-based agreements that link payment to effectiveness
- Maintain incentives for continued pharmaceutical innovation
- Are supported by complementary trade policy actions that require foreign countries to pay their fair share
Read the full comments on the GLOBE model and the GUARD model.
