Most Favored Nation (MFN) Pricing and the GLOBE & GUARD Models

What Is Most Favored Nation (MFN) Drug Pricing?

Most Favored Nation (MFN) pricing is a policy approach that ties U.S. drug prices to lower prices paid in other countries. Under MFN proposals, if a drug costs less in comparable international markets, U.S. Medicare payments would be benchmarked to those lower prices. While reducing drug costs is an important goal, MFN policies that do not include protections for orphan drugs risk undermining the financial incentives that make rare disease drug development possible. Rare disease treatments serve small patient populations and often have limited international markets, making them particularly vulnerable to pricing policies based on international benchmarks set by countries that may undervalue or restrict access to these therapies.

The GLOBE and GUARD Models

On December 19, 2025, the Centers for Medicare & Medicaid Services (CMS) proposed two mandatory drug pricing models that would tie Medicare drug payments to international reference prices:

GLOBE Model (Global Benchmark for Efficient Drug Pricing): Applies to Medicare Part B (physician-administered drugs). Would require manufacturer rebates when U.S. prices for high-cost single-source drugs exceed a benchmark derived from prices in 19 economically comparable countries. Proposed to run from October 2026 through September 2031, applying to approximately 25% of Medicare beneficiaries in selected geographic areas. (Federal Register: CMS-5545-P)

GUARD Model (Guarding U.S. Medicare Against Rising Drug Costs): Applies to Medicare Part D (retail prescription drugs). Would similarly replace the current inflationbased rebate calculation with an international reference price benchmark for certain sole-source drugs. Proposed to run from January 2027 through December 2031. (Federal Register: CMS-5546-P)

Why This Matters for Rare Disease Patients

As currently proposed, neither the GLOBE nor the GUARD Model includes a specific exclusion for orphan drugs. Many of the countries used as reference benchmarks employ health technology assessments (HTAs) that systematically undervalue treatments for small patient populations, including quality-adjusted life year (QALY) thresholds that penalize therapies for rare and ultra-rare conditions. Benchmarking U.S. orphan drug prices to countries that restrict or delay access to these same treatments could reduce the returns that make rare disease R&D viable — discouraging investment in the therapies that 30 million Americans with rare diseases need. The Task Force is advocating for an explicit orphan drug exclusion in both the GLOBE and GUARD Models, consistent with the exclusion Congress already established for orphan drugs in the Medicare Drug Price Negotiation Program through the ORPHAN Cures Act. Public comments on both proposed rules were due February 23, 2026. The Task Force submitted comments accordingly.