MFN drug pricing, explained
for practices that buy and bill.

MFN stands for “most favored nation.” In trade it means a country gives every partner the same terms it gives its best one; in drug pricing it means tying what Americans pay for a medicine to the lowest price paid in other wealthy countries. As of October 19, 2026, MFN reaches drugs through voluntary manufacturer deals, a finalized Medicare Part B model called GLOBE that starts in 2027 and leaves ASP + 6% in place, and a Part D model, GUARD, that is not yet final.

01What MFN means: trade first, then drugs

The term now covers several separate programs. Only one of them changes what Medicare pays your practice:

02The 2020 MFN Model, and why it never started

CMS published the Most Favored Nation Model as an interim final rule on November 27, 2020. Unlike today’s programs, it cut what practices were paid. For about 50 of the highest-spend Part B drugs, payment would have phased down to the lowest GDP-adjusted price among wealthy OECD countries, and the 6% add-on would have become a flat fee per dose.

Many older MFN articles describe this 2020 design, which would have paid practices less. The 2026 GLOBE design does not.

03The 2025 executive order and the manufacturer deals

Executive Order 14297 (May 12, 2025) directed HHS to send manufacturers MFN price targets and, without “significant progress,” to propose rules and consider importation. On July 31, 2025, letters asked 17 manufacturers for four things: MFN prices for every Medicaid patient, MFN prices at launch, direct sales to patients at or below MFN, and the return of increased foreign revenue. The deals that followed share those terms.

What the deals mean for a practice:

• Medicaid, not MedicareThe deals give every state Medicaid program MFN prices through GENEROUS, a voluntary CMS model; 40 states and Puerto Rico had signed by September 18, 2026. Medicaid rebates are not counted in ASP.
• Launch pricesEach company promises “MFN prices on all new innovative medicines.” How that is measured is not public; KFF notes the details “remain confidential.”
• TrumpRx is a cash channelIt launched February 5, 2026 with 40 drugs from five manufacturers, for patients paying cash. It does not touch office-administered biologics.

04GLOBE and GUARD: the two Medicare models

GLOBE, checked against the final rule

How it works

It changes the existing Part B inflation rebate for selected drugs. The manufacturer owes, per unit, the larger of the normal inflation rebate or the gap between Medicare’s payment and an international benchmark built from 19 countries, adjusted for GDP.

Which drugs

Single-source drugs and biologics in seven USP classes with over $100 million a year in Original Medicare Part B spending. Excluded: drugs with a negotiated price in effect, orphan-only drugs, listed cell and gene therapies, plasma-derived products, and reference biologics once a biosimilar is marketed. CMS posts the code list before each quarter.

Which patients

About 25% of Original Medicare Part B patients, in randomly chosen ZIP areas. The list is due by January 16, 2027.

Reach

CMS waives any manufacturer taking part in GENEROUS, which it estimates leaves four manufacturers. Projected savings fell from about $11.9 billion in the proposal to $440 million.

In court

PhRMA sued in Washington, DC on October 7, 2026 (No. 1:26-cv-03498). No ruling had been reported as of October 19, 2026.

“The GLOBE Model does not change the Medicare Part B payment limit or add-on payment (generally, ASP+6 percent).”

GLOBE final rule, 91 FR 62936

For your claims: you bill as usual, with no modifier. For a patient in the model, coinsurance drops and Medicare pays more: on a $100 allowed amount with coinsurance cut to 10%, Medicare pays $90 and the patient $10. The remittance shows the patient’s share, so coinsurance collected up front may need a partial refund. CMS also acknowledges manufacturers “may change list prices or price concessions in the U.S. across all payers,” which “could in turn indirectly impact the ASP amount.”

05How MFN fits with Medicare negotiation and ASP

Medicare pays 106% of a Part B drug’s average sales price, updated each quarter from what manufacturers report within 30 days after the quarter ends. ASP is net of volume and prompt-pay discounts, chargebacks and rebates, but not Medicaid rebates.

The Inflation Reduction Act adds a second rule for negotiated drugs. On January 27, 2026, CMS selected 15 drugs for 2028 prices, the first cycle to include Part B drugs. Xolair is on the list, with $1.08 billion in Medicare spending over the year to October 2025, along with Orencia, Entyvio, Cimzia and Botox. CMS must publish the agreed prices by November 30, 2026, and they take effect January 1, 2028.

A made-up Part B biologic, Medicare primary, sequestration and secondary insurance left out. A lower ASP shrinks the add-on and can turn stock bought at the old price into a loss. Under negotiation, a $700 negotiated price would pay $742 per dose, and the margin would depend on the manufacturer’s refund arriving on time.

06What your practice should do now

• WatchXolairOn the 2028 negotiation list. Its negotiated price is due by November 30, 2026; plan for 106% of it from January 1, 2028.
• WatchThe GLOBE listOmalizumab is classed as an immunological agent; the IL-5 and TSLP drugs as respiratory agents, a class GLOBE does not list. CMS’s quarterly list is the authority.
• WatchNew launchesAll 26 companies promised MFN pricing at launch. Model a new biologic from its first ASP, not its list price.

1. 01Model the margin per drug, per payer: payment, net purchase cost, margin per dose. Rerun it with each quarterly CMS payment file.
2. 02Stress-test a 10% ASP drop. Note which drugs turn negative and how many doses you hold.
3. 03Keep inventory lean on exposed drugs, so little stock is bought at an old price.
4. 04Read your purchase terms. Ask your distributor or purchasing group about price protection and credits on stock on hand.
5. 05Set coinsurance collection for GLOBE ZIP areas before April 1, 2027, to avoid refunds.
6. 06Prepare for negotiated-price refunds in 2028: track Xolair purchases by NDC and invoice, and name who matches refunds to claims.
7. 07Recheck buy and bill against specialty pharmacy for any drug whose math changes; see buy and bill or specialty pharmacy.

Many commercial contracts pay drugs as a percentage of Medicare’s ASP, so an ASP change can reach them too.

07MFN legislation: what Congress has and has not done

No MFN bill has become law. Each bill below was referred to committee with no further action as of October 19, 2026.

The President’s January 2026 “Great Healthcare Plan” asked Congress to write the deals into law. Until it does, MFN rests on voluntary agreements and the CMS Innovation Center’s authority, which PhRMA’s lawsuit challenges.

08Where Medico fits

Our Biologics Management team runs benefit checks, prior authorizations and buy and bill for member practices. Members can model a biologic’s cost and reimbursement in their portal before stocking it, so when an ASP or a negotiated price moves, you see the margin per dose before you reorder.

Medico also pools members’ biologic volume to reach manufacturer rebate tiers, and pays each practice its share every quarter with a one-page statement. If you want to know what MFN, GLOBE or the 2028 negotiated prices do to the biologics you stock, ask us.

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09Questions and answers