The U.S. government is taking a renewed step toward addressing the rising cost of prescription medications with the announcement of two new Medicare pilot programs aimed at lowering drug prices for older and disabled Americans. On December 21, 2025, the Centers for Medicare & Medicaid Services (CMS) confirmed plans to test international price benchmarking models across different segments of the Medicare program, signaling a more aggressive federal role in drug cost containment after years of political debate.
The initiatives, known as the GLOBE and GUARD pilot programs, are designed to align U.S. drug prices more closely with those paid in other developed nations, where governments typically negotiate directly with pharmaceutical manufacturers. CMS officials said the pilots are intended to reduce out-of-pocket expenses for Medicare beneficiaries who rely on expensive medications to treat cancer, autoimmune disorders, and other chronic or life-threatening conditions.
Under the first program, called GLOBE, Medicare Part B drug prices will be adjusted using a reference basket of international prices. Part B covers physician-administered medications, including many infused cancer therapies and injectable treatments provided in hospital outpatient settings or doctors’ offices. The GLOBE initiative is scheduled to begin in October 2026 and will apply to a selected group of high-cost drugs identified as placing a significant financial burden on patients and the Medicare system.
CMS officials said the GLOBE model is designed to test whether linking reimbursement rates to global pricing data can lower costs without reducing patient access to essential treatments. In many cases, U.S. prices for Part B drugs are significantly higher than those paid in Europe, Canada, and other peer countries. By narrowing that gap, the agency hopes to slow Medicare spending growth while reducing coinsurance amounts paid by beneficiaries.
The second program, known as GUARD, focuses on Medicare Part D, which covers outpatient prescription drugs typically obtained at retail pharmacies. GUARD is set to take effect on January 1, 2027, and will target a separate group of high-cost medications commonly used to manage chronic illnesses. These include drugs for conditions such as multiple sclerosis, rheumatoid arthritis, and rare genetic disorders, where annual treatment costs can reach tens or even hundreds of thousands of dollars.
Unlike Part B, Part D has historically relied on private plans to negotiate prices with manufacturers, with limited direct involvement from the federal government. CMS said the GUARD pilot will test new pricing mechanisms that reference international benchmarks while preserving the role of private plans in managing formularies and patient access. Officials emphasized that the program is structured as a limited test rather than a permanent overhaul, allowing policymakers to evaluate impacts before considering broader adoption.
The announcement comes amid continued public concern over prescription drug affordability, particularly among seniors living on fixed incomes. While recent legislation has capped insulin costs and placed annual limits on out-of-pocket spending for Medicare beneficiaries, many patients still face substantial financial strain from specialty drugs not covered by those reforms. CMS leaders said the new pilots are meant to complement existing measures by addressing underlying drug prices rather than relying solely on cost-sharing caps.
Health policy experts note that international reference pricing has long been controversial in the United States, where critics argue it could discourage pharmaceutical innovation or limit drug availability. Industry groups have already signaled concern that linking U.S. prices to those set by foreign governments may reduce revenues needed to fund research and development. However, CMS officials said the pilots are carefully designed to avoid sudden price shocks and include safeguards to monitor patient access and provider participation.
Supporters of the programs argue that the U.S. has paid disproportionately higher prices for prescription drugs for decades, effectively subsidizing lower prices abroad. They contend that modest price alignment would still allow companies to profit while easing pressure on Medicare’s long-term finances. According to CMS estimates, prescription drug spending represents one of the fastest-growing components of Medicare expenditures, driven largely by the increasing use of high-cost specialty medications.
The pilots will also generate extensive data on how international price benchmarking affects prescribing behavior, patient adherence, and overall health outcomes. CMS said it plans to work closely with clinicians, insurers, and patient advocacy groups throughout the testing period to identify unintended consequences and make adjustments as needed. Participation by providers and plans will be mandatory in selected geographic areas, a design choice intended to produce statistically meaningful results.
Politically, the programs reflect a broader shift in federal health policy toward more direct intervention in pharmaceutical pricing. While previous efforts to implement international reference pricing were delayed or blocked, the current approach uses the Center for Medicare and Medicaid Innovation’s authority to test payment models without immediate congressional action. The results of these pilots could influence future debates over expanding Medicare’s negotiating power or adopting permanent pricing reforms.
As the healthcare system prepares for the rollout of GLOBE and GUARD, stakeholders across the pharmaceutical, insurance, and provider communities are closely watching how the pilots are implemented. For millions of Medicare beneficiaries, the programs offer the prospect of meaningful relief from high prescription costs, though tangible savings may not materialize until late in the decade.
Ultimately, the success of the pilots will be judged on whether they can balance affordability, access, and innovation in a complex and politically sensitive sector. If effective, they could mark a turning point in how the United States approaches prescription drug pricing within its largest public health insurance program.
