US Health Agency Launches Two Medicare Pilot Programs to Lower Drug Prices
December 19, 2025 — The U.S. government announced on Friday two new pilot programs aimed at reducing out-of-pocket drug costs for Medicare beneficiaries by aligning prices more closely with those paid in economically comparable countries. The initiatives, set to begin in 2026 and 2027, are designed to address the rising burden of prescription medication costs on older and disabled Americans enrolled in Medicare.
Innovative Pilot Programs: GUARD and GLOBE
The Centers for Medicare and Medicaid Services (CMS) revealed the launch of two pilot programs titled Guarding U.S. Medicare Against Rising Drug Costs (GUARD) and Global Benchmark for Efficient Drug Pricing (GLOBE). These programs aim to evaluate manufacturer rebates when drug prices under Medicare exceed those paid internationally, helping to ensure that patients’ out-of-pocket expenses are more reasonable.
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GLOBE Model: This program will focus on drugs covered under Medicare Part B, which typically includes treatments administered in clinical settings such as chemotherapy for cancer, autoimmune disease therapies, eye disorder medications, and hormonal treatments. Starting October 1, 2026, and running through 2031, GLOBE will use international price data to calculate rebates owed by drug manufacturers and adjust patient costs accordingly.
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GUARD Model: Scheduled to begin January 1, 2027, this program targets medications covered under Medicare Part D, the prescription drug benefit assisting enrollees with outpatient medications via Medicare-approved private plans. GUARD will similarly benchmark prices against those charged in comparable countries to determine rebates and reduce patients’ co-pays, coinsurance, and flat fees on selected drugs. It will operate through December 31, 2031. ### Addressing High Drug Costs for Medicare Enrollees
Medicare Part D helps beneficiaries pay for medications prescribed outside of hospital settings, while Part B covers a range of infused or injected drugs and treatments. Both parts have traditionally been associated with significant out-of-pocket costs for patients, including co-payments and coinsurance based on drug prices.
The new pilot programs aim to curb these expenses by ensuring that U.S. drug prices under Medicare are not substantially higher than those seen in similarly developed countries. By leveraging international price benchmarks, CMS hopes to generate manufacturer rebates that can be used to reduce the financial burden on Americans who rely on Medicare for their healthcare needs.
Moving Forward
These initiatives are part of the broader effort by the U.S. government to address healthcare affordability, particularly amid surging drug prices. The pilot programs allow CMS to test the impact of global price comparisons and manufacturer rebates on controlling drug costs before potentially expanding such measures nationwide.
With GLOBE launching in late 2026 followed by GUARD in early 2027, the programs will provide valuable data over a five-year period, helping shape future Medicare drug pricing policies and potentially setting a precedent for more cost-effective prescription drug access for seniors and people with disabilities.
Reporting by Mariam Sunny in Bengaluru; editing by Shailesh Kuber
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