Three Models of MFN Announced
The executive order (EO) signed by President Trump in May 2025 instructed his administration to establish the rules on how Most-Favoured-Nation (MFN) pricing would be implemented.
In response, the Centers for Medicare & Medicaid Services (CMS) announced frameworks for three models of MFN: GENErating cost Reductions fOR U.S. Medicaid (GENEROUS), Global Benchmark for Efficient (GLOBE) Drug Pricing model (GLOBE), and Guarding U.S. Medicare Against Rising Drug Costs (GUARD).
GENEROUS
Announced as the first of the three models, GENEROUS is aimed at reducing prices for Medicaid through voluntary manufacturer participation. Manufacturers who opt in will provide additional rebates to participating states, bringing Medicaid net prices in line with what other countries pay for the same drug (i.e. the MFN price). In return, participating manufacturers benefit from standardised coverage criteria across participating states, such that they do not have to negotiate with each state individually.
The model applies to single-source and innovator multiple-source outpatient drugs. Under GENEROUS, the MFN price is defined as the second-lowest manufacturer-reported net price in the CMS’ reference countries, adjusted by Gross Domestic Product (GDP) per capita using the Purchasing Power Parity (PPP) method. The specific country basket for this model includes the United Kingdom, France, Germany, Italy, Canada, Japan, Denmark, and Switzerland.
GLOBE
The aim of GLOBE is to apply MFN-pricing to Medicare Part B, using manufacturer rebates for specific drugs when their prices in the United States are greater than those paid in comparable countries.
Unlike GENEROUS, GLOBE would be a mandatory model, requiring participation from manufacturers of qualifying drugs. However, the model will only be implemented in specific geographic areas that comprise 25% of the United States’ Medicare Part B beneficiaries. GLOBE covers single-source drugs and sole-source biological products with Medicare Part B fee-for-service spending that exceeds $100 million a year in seven specific therapeutic categories. GLOBE also applies a different benchmark from GENEROUS for the MFN price, utilising two possible approaches: CMS calculates the international benchmark for drugs using available data in the reference countries, with the benchmark equalling the lowest country-level average price among the average prices for each reference country, adjusted by GDP using PPP; or, manufacturers submit average net price data for the reference countries, adjusted by GDP based on PPP. The reference countries for GLOBE are those with real GDP per capita of at least 60% of the United States’ and that also have a minimum real economy size of $400 billion.
GUARD
GUARD aims to apply MFN to Medicare Part D, requiring that manufacturers provide rebates when the price of a medicine under Medicare Part D exceeds that in other similar countries. Like GLOBE, GUARD has been devised as a mandatory model, covering drugs in the Medicare Part D Drug Inflation Rebate program, including sole-source drugs and sole-source biologics across 17 specific therapeutic categories that are above the minimum spend threshold of $69 million in 2027. GUARD proposes the same method of calculating the international benchmark as GLOBE, as well as the same reference countries, and GUARD also similarly will be implemented in randomly selected geographic regions representing 25% of Medicare Part D beneficiaries.