CFJ Files Comments Opposing GLOBE and GUARD Drug Pricing Rules
- Jeffrey Depp
- Feb 24
- 2 min read
Updated: 3 days ago
CMS Docket IDs: CMS-5545-P & CMS-5546-P
The Committee for Justice (CFJ) has submitted comments to the Centers for Medicare & Medicaid Services (CMS) in response to its proposed Global and Professional Direct Contracting Model (GLOBE) and Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model.
Both proposals would tie certain Medicare drug payments to prices set in foreign countries. CMS has framed the models as efforts to reduce domestic drug spending by benchmarking U.S. reimbursement against prices in economically comparable nations.
In its comments, CFJ raises significant concerns about the economic and structural implications of this approach.
Overview of the Proposed Models
The GUARD model would modify the existing Medicare Part D inflation rebate structure by incorporating international reference pricing into the rebate calculation for certain drugs. The GLOBE model would similarly link Medicare reimbursement to foreign price benchmarks.
In practice, both models would import elements of foreign government price-setting systems into the U.S. Medicare framework.
CFJ's Key Concerns
In its submission, CFJ emphasizes several core points:
1. International Reference Pricing Reflects Government Price Controls
Many OECD countries achieve lower pharmaceutical prices through centralized price-setting, monopsony purchasing power, and budget-constrained negotiations. These prices are not market-generated signals, but rather administrative outcomes shaped by domestic political and fiscal considerations.
CFJ argues that incorporating such prices into Medicare reimbursement risks substituting bureaucratic price-setting for market-based price discovery.
2. Global R&D Cost-Shifting
Pharmaceutical innovation is characterized by high fixed costs, substantial uncertainty, and global distribution of research investment. When foreign governments suppress drug prices below market-clearing levels, the recovery of research and development costs shifts toward jurisdictions that maintain comparatively more market-based pricing.
CFJ’s comments explain that adopting foreign price benchmarks domestically could extend — rather than correct — this asymmetry, with potential long-term consequences for innovation incentives.
3. Existing Domestic Regulatory Burdens
CFJ also notes that U.S. drug pricing operates within a complex regulatory environment that includes Medicare reimbursement formulas, mandatory rebates, Inflation Reduction Act negotiation provisions, and extensive FDA compliance requirements.
Layering additional pricing mechanisms onto this already intervention-heavy framework may introduce further complexity without addressing the underlying structural issues.
4. Trade Policy as an Alternative Tool
Rather than importing foreign administrative pricing systems into Medicare, CFJ’s comments suggest that trade enforcement mechanisms — including tools available under Section 301 of the Trade Act of 1974 — may provide a more direct means of addressing international pricing asymmetries.
This approach, CFJ explains, would confront the source of the distortion while preserving domestic market-based pricing structures.
Why This Matters
Pharmaceutical innovation capacity is closely tied to long-term economic growth, public health resilience, and national preparedness. Policies that affect expected returns on high-risk biomedical research can have downstream effects on capital allocation, investment decisions, and the development of future therapies.
CFJ will continue to monitor developments related to the GLOBE and GUARD models and will engage further as the rulemaking process moves forward.
