March 2026 Newsletter: International Drug Pricing in Medicare

Dear colleagues,

Last fall's Most Favored Nation (MFN) news focused on voluntary individual pharma deals with the White House. Two new proposals from the executive branch would make MFN-style pricing mandatory industry-wide. The Centers for Medicare and Medicaid Services (CMS) introduced GLOBE and GUARD in December 2025 to extend MFN pricing logic across Medicare Part B (GLOBE) and Part D (GUARD).

The strategic implications run deeper than the headline. Launch sequencing, deal structures, and global pricing decisions all look different if these models take effect, and the timeline is shorter than most teams are planning for. Below, we share our read on what matters most, along with a few external resources we have found useful.

If you are navigating a pricing, launch, or deal structure question in this environment, reach us at solutions@headlandstrategy.com.

GLOBE and GUARD: The new rules that could reshape Medicare net pricing.

In 2020, the first Trump administration tried a now-familiar approach: mandatory Medicare Part B price reductions benchmarked to international prices. It was blocked procedurally because CMS bypassed the required notice-and-comment process, which requires CMS to allow public and industry review before a rule takes effect.

This time, CMS did the rulemaking properly. GLOBE and GUARD recently completed the notice-and-comment period ahead of potential fall rollout. Legal challenges are still expected, but the procedural vulnerability that sank the last attempt has been addressed.

Both models create an incremental rebate exposure when U.S. Medicare pricing exceeds a benchmark derived from prices in a 19-country basket of wealthy nations. International launch pricing can materially influence that benchmark, particularly if low net prices are observed in a reference country early in the performance period.

GLOBE covers Medicare Part B across seven therapeutic categories — including CNS agents, immunological agents, and ophthalmic agents — targeting single-source drugs and biologics above $100 million in annual Part B fee-for-service spending. CMS has identified roughly 62 drugs in scope, representing about 55% of total Part B drug spend, with a proposed start date of October 1, 2026.

GUARD covers Medicare Part D across 17 therapeutic categories including cardiovascular agents, blood glucose regulators, antivirals, antipsychotics, and respiratory agents, targeting sole-source drugs and biologics above a ~$69 million spend threshold in year 1. GUARD’s proposed start date is January 1, 2027.

CMS projects $11.9 billion in Part B savings from GLOBE, plus $14.1 billion through 2033 from GUARD. Industry trade organizations PhRMA and BIO have signaled they will sue if final rules are issued, and the U.S. Chamber of Commerce filed comments in the last week of the period calling for both proposals to be withdrawn. Legal challenges are expected though the outcome is genuinely uncertain. If these rules take effect, impacts on pricing models and international launch sequencing will require careful strategic attention. 

This month's newsletter was researched and drafted by Headland Associate Peter Dykstra.

What we are reading and listening to.

A short list of external resources we are finding helpful:

• The Connected With Latham podcast (Latham & Watkins) released a 34-minute episode in early February walking through the new MFN models, IRA implementation, and TrumpRx.gov. A current and practical policy briefing for commercial teams.

• Adam Fein at Drug Channels published his annual pricing analysis showing U.S. brand-name net prices actually fell in 2025. A useful counterweight to the policy noise, and a signal that the gross-to-net dynamic is shifting regardless of what CMS finalizes.

• The BioCentury Show ran a candid 41-minute conversation in mid-February with RA Capital's Peter Kolchinsky on how MFN pricing, the IRA's pill penalty, and FDA staffing losses are collectively slowing drug development.