The Biotechnology Innovation Organization and two California trade groups, Biocom California and the California Life Sciences Association, filed a complaint on Friday, November 6 in the US District Court for the Northern District of California seeking to halt the Global Benchmark for Efficient Drug Pricing model, known as GLOBE. The suit, case 3:26-cv-13372, names Health and Human Services Secretary Robert F. Kennedy Jr., Centers for Medicare and Medicaid Services Administrator Mehmet Oz and Center for Medicare and Medicaid Innovation director Abe Sutton, and their agencies, as defendants. It asks the court to declare the model unlawful, set it aside, postpone its effective date and enjoin enforcement against the plaintiffs and their members.
GLOBE is a mandatory model for certain highly used Medicare Part B drugs, the medicines administered in doctors’ offices and clinics. Under the final rule, published on October 2, 2026 at 91 Fed. Reg. 62,936, manufacturers would pay quarterly rebates to CMS equal to the difference between United States prices and a reference price drawn from government controlled prices in 19 other countries. The model covers single source drugs and biologics above 100 million dollars in Part B spending in categories including antineoplastics, immunological agents and ophthalmic agents, applies in randomly chosen ZIP code areas covering about a quarter of Part B fee for service beneficiaries, and excludes drugs selected for Medicare price negotiation, drugs approved only for rare diseases, cell and gene therapies and plasma derived products.
The plaintiffs argue that the demonstration authority CMS used, section 1315a of the Social Security Act (42 U.S.C. section 1315a), allows tests of payment and service delivery models for a defined population with deficits in care, and that GLOBE does not fit that grant. The complaint also points to CMS’s own discussion in the rule that only about 0.3 percent of beneficiaries would see any change in their out of pocket costs. BIO’s release says the three groups together represent more than one third of United States biotechnology companies, and its president and chief executive John Crowley has said finalising GLOBE threatens the innovation ecosystem that makes new treatments possible. CMS did not immediately respond to a request for comment.
The timing is tight. The rule takes effect on November 30, 2026, with a five year performance period beginning April 1, 2027. CMS estimates the final model will save about 440 million dollars in net Medicare Part B spending over its seven year payment period, far below the roughly 11.9 billion dollars projected for the original proposal, a narrowing BIO itself has acknowledged while continuing to oppose the model. The industry challenge is now two fronted: PhRMA filed a separate suit against the same rule in federal court in Washington on October 7, 2026, also arguing that CMS exceeded its statutory authority.
Neither suit is a ruling, and GLOBE remains a CMS payment rule until a court orders otherwise. What the BIO filing changes is the venue and the plaintiff mix: a California case led by the biotechnology sector’s own trade body, running in parallel with PhRMA’s Washington case, with the November 30 effective date as the deadline both courts are effectively working against.