AHA Responds to CMS on New Drug Pricing Model

The American Hospital Association (AHA) has responded to the Centers for Medicare & Medicaid Services' proposed rule on the Global Benchmark for Efficient Drug Pricing Model (GLOBE). Announced in December, this new Medicare payment model targets offering the lowest international drug prices for selected medications under Medicare Part B, aiming to reduce out-of-pocket expenses for a particular group of beneficiaries. Although supporting the administration's goal to lower drug costs, the AHA expressed concerns about the GLOBE Model's operational details, which may present additional challenges for hospitals and health systems.

The AHA recommended that the Centers for Medicare & Medicaid Services (CMS) implement measures to closely monitor the costs hospitals incur when purchasing drugs covered under Medicare Part B. It further suggested addressing operational and administrative hurdles while emphasizing the importance of establishing safeguards to prevent an increase in white bagging practices. White bagging involves third parties requiring specific prescribed medications to be sourced through designated specialty pharmacies and delivered directly to healthcare facilities for patient use, potentially complicating risk management and regulatory compliance for providers.