The Pharmaceutical Research and Manufacturers of America filed a lawsuit Oct. 7 challenging CMS’ mandatory Global Benchmark for Efficient Drug Pricing, arguing the agency lacks the authority to impose international price benchmarks on Medicare Part B drugs.
The lawsuit, filed in the U.S. District Court for the District of Columbia, names HHS Secretary Robert F. Kennedy Jr., CMS Administrator Mehmet Oz, MD, and Abe Sutton, director of the CMS Innovation Center, along with their agencies. PhRMA asks the court to declare the rule unlawful, set it aside and postpone its Nov. 30 effective date. It also seeks a temporary restraining order and preliminary and permanent injunctions blocking the rule’s enforcement.
CMS finalized GLOBE on Sept. 30 after proposing it in December alongside GUARD, a companion model for Part D drugs. The final version applies to about 25% of Part B fee-for-service beneficiaries, selected by ZIP code, and covers single-source drugs and biologics in certain categories that exceed $100 million in annual Part B spending. It excludes orphan-only drugs, plasma-derived products and certain cell and gene therapies.
The model follows GENEROUS, in which 40 states have agreed to apply similar international benchmarking to Medicaid drug pricing. The AHA has also urged CMS to withdraw the first-term most-favored-nation rule for Part B drugs, warning it could limit patient access to certain therapies.
PhRMA argues in the lawsuit that CMS overstepped its authority. The group said the law CMS cited, which lets the agency test new payment models, does not allow it to tie Medicare drug rebates to prices in 19 other countries. It also argues Congress never clearly gave CMS power over a change this large and that the rule borrows other countries’ pricing methods that Congress barred Medicare from using. The complaint notes that courts struck down the first Trump administration’s similar pricing rule.
PhRMA also disputed CMS’ savings estimate of $440 million over seven years, down from $11.9 billion in the proposed rule. The drop largely reflects an assumption that manufacturers in CMS’ Medicaid-focused GENEROUS model will be exempt. PhRMA said the lower figure understates the rule’s impact.
