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News
Pharma's top lobby goes to court over Medicare drug pricing. The Pharmaceutical Research and Manufacturers of America (PhRMA) filed a lawsuit challenging the Trump administration's newly finalized GLOBE model, which ties Medicare Part B drug prices to international benchmarks. PhRMA argues the policy is unlawful, exceeds CMS authority, and will harm innovation — while CMS says it will lower costs for beneficiaries without reducing care quality.
Pharma's top lobby goes to court over Medicare drug pricing
The Trump administration's Global Benchmark for Efficient Drug Pricing (GLOBE) model — finalized on Sept. 30 and set to launch Jan. 1 — is already facing a legal fight. PhRMA filed suit in the U.S. District Court for D.C., arguing that CMS is overstepping its authority by using the demonstration model to impose nationwide price-setting policies that Congress never authorized. The model benchmarks Medicare Part B drug prices against those paid in economically comparable countries, part of the administration's broader "most favored nation" (MFN) pricing push.
PhRMA contends the policy raises serious constitutional concerns around separation of powers, could chill U.S. R&D investment, and that its reliance on quality-adjusted life years (QALYs) may discriminate against patients with disabilities or rare diseases. CMS, meanwhile, projects the model will deliver out-of-pocket savings for beneficiaries, with lower coinsurance available from April 2027 through March 2032 — covering roughly 25% of traditional Medicare enrollees.
By the Numbers
Why it matters: The GLOBE lawsuit is the latest flashpoint in a long-running battle over U.S. drug pricing reform. With PhRMA's IRA challenge already rebuffed by a federal appeals court in August, the outcome here could set a major precedent for how far the executive branch can go in reshaping drug payment policy — without an act of Congress.
