This cohort study modeled the impact of two mandatory most-favoured-nation (MFN) Medicare drug pricing models — GLOBE (Part B) and GUARD (Part D) — on net Medicare spending, using pricing and sales data from 19 reference countries for 195 eligible brand-name drugs totaling $87.9 billion in Medicare spending.
MFN pricing was projected to reduce net Medicare spending by $5.2 billion (16.1%) under GLOBE and $6.4 billion (17.6%) under GUARD; however, for 101 of 138 drugs (73.2%), estimated Medicare savings would exceed total annual sales in the binding reference country, signaling high risk of manufacturer behavioral shifts that could erode savings.
The model assumes static manufacturer behavior, but real-world savings could be substantially lower if manufacturers withdraw products from reference countries or renegotiate prices. Savings would be cut by 71.3% if manufacturers with separate HHS agreements are exempt, and by 12.2% if the reference basket is narrowed to G7 countries only.
If implemented as designed, MFN pricing could meaningfully cut out-of-pocket and program costs for Medicare Part B and D drugs — but clinicians and policymakers should anticipate that manufacturers may exit reference markets or seek exemptions, which could sharply reduce projected savings.
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