Article
Healthcare & Life Sciences: Drug Pricing Digest — Number 82
October 5, 2026
Our Drug Pricing and Market Access team tracks recent developments in healthcare reform, the Medicaid Drug Rebate Program, the 340B Program, Medicare, and state law.
Inflation Reduction Act, Healthcare Reform, and General Developments
CMS PUBLISHES GLOBE FINAL RULE TO IMPLEMENT MFN PRICING IN MEDICARE PART B
On September 30, 2026, the Centers for Medicare & Medicaid Services (CMS) published a final regulation that will implement most favored nation (MFN) drug pricing in Medicare Part B through the vehicle of a mandatory payment model. The Global Benchmark for Efficient Drug Pricing (Globe) Model regulation was initially proposed on December 19, 2025, as discussed in issue No. 62 of this digest.
The final Globe regulation differs from the proposed regulation in a number of ways, some of which include:
- The model begins on January 1, 2027, and the first payment and performance year commences on April 1, 2027. The first quarter of 2027 is a reporting quarter for manufacturers that voluntarily submit international net pricing data.
- Globe will not apply to drugs with one or more orphan-designated indications and approved only for such indications, drugs listed on the Food and Drug Administration (FDA) Approved Cellular and Gene Therapy Products site, and plasma-derived products.
- In the preamble, CMS indicates that it will waive mandatory Globe participation for manufacturers that participate in the voluntary Generous payment model. As discussed in issue No. 59 of this digest, the Generous payment model applies MFN pricing in Medicaid. A preamble footnote states that “assuming manufacturers who are participating in [Generous] receive a waiver for [Globe] … the number of remaining manufacturers of [Globe] drugs would be four.”
The parallel Guarding U.S. Medicare Against Rising Drug Costs (Guard) Model, which was proposed at the same time as the Globe model, has not been published in final form. As proposed, Guard would have commenced on January 1, 2027.
Sources: BloombergLaw (first, second, third), InsideHealthPolicy, PoliticoPro, PinkSheet (first, second), StatNews.
Join Nicole Liffrig Molife on the latest episode of the Connected with Latham podcast, where she and the Latham team take a deep dive on the Sunshine Act and its requirements, providing a compliance roadmap for companies preparing for their first launch and report.
OTHER MFN DEVELOPMENTS
Stakeholders continue to discuss the terms of the confidential pricing agreements manufacturers have entered into with the White House, as well as state participation in Generous.
Sources: BloombergLaw, InsideHealthPolicy (first, second, third), PinkSheet, StatNews,
Stakeholders continue to discuss the implications of the MFN drug pricing policy and pharmaceutical tariffs, including on ex-US markets.
Sources: Law360, Politico Pro, InsideHealthPolicy (first, second), PinkSheet (first, second, third, fourth).
LITIGATION CHALLENGING THE IRA CONTINUES
Drug manufacturer litigation against the drug pricing negotiation program established under the Inflation Reduction Act (IRA) continues.
Source: Law360.
Medicaid Drug Rebate Program (MDRP)
No developments to report.
340B Program
REBATE MODEL DEVELOPMENTS
The Health Resources & Services Administration (HRSA) has published the list of 10 manufacturers that the agency has approved to participate in the 340B rebate pilot. HRSA also made available the plans pursuant to which these manufacturers will participate in the rebate model.
Source: 340B Report.
TWO WHITE PAPERS ANALYZE 340B PROGRAM
A recently published white paper analyzes the effectiveness of CMS relying on the TB modifier to exclude 340B utilization from Medicare Part B inflation rebate invoices.
Source: Aery Policy & Access Partners.
A second report investigates how the growth of the 340B program has fueled hospital profits.
Source: BloombergLaw.
LITIGATION REGARDING CHILD SITE REGISTRATION REQUIREMENTS CONTINUES
In response to the COVID-19 pandemic, HRSA had waived certain registration requirements for covered entity child sites and then withdrew the waiver in 2023. Litigation brought by covered entities challenging that withdrawal remains ongoing. As discussed in issue No. 67 of this digest, the US District Court for the District of Columbia ruled against HRSA. The agency’s appeal remains ongoing.
Source: 340B Report.
MANUFACTURER CLAIMS DATA REQUIREMENT FOR IN-HOUSE PHARMACY DISPENSES
As discussed in issue No. 64 of this digest, a growing number of manufacturers have begun requiring covered entities to submit claims-level data for all their 340B dispenses, including dispenses from in-house pharmacies. Litigation challenging one manufacturer’s policy continues.
Source: 340B Report.
MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE
Drug manufacturer litigation challenging the 340B laws enacted by various states continues.
Sources: BloombergLaw, 340B Report (first, second, third).
STATE CONTRACT PHARMACY LAW DEVELOPMENTS
More states have enacted or proposed legislation that would bar drug manufacturers from restricting contract pharmacy access. Some bills would require covered entities to make disclosures regarding 340B discounts. We note that legislative action related to the 340B program may have occurred in other states but has not yet been reported in the trade press.
Source: 340B Report.
Medicare Part B
No developments to report.
Medicare Part D
No developments to report.
State Law Developments
No developments to report.
Endnotes
This publication is produced by Latham & Watkins as a news reporting service to clients and other friends. The information contained in this publication should not be construed as legal advice. Should further analysis or explanation of the subject matter be required, please contact the lawyer with whom you normally consult. The invitation to contact is not a solicitation for legal work under the laws of any jurisdiction in which Latham lawyers are not authorized to practice. See our Attorney Advertising and Terms of Use.