December 2025 marked a defining moment in U.S. drug pricing and Medicare reimbursement policy. Alongside the GLOBE Model for Medicare Part B, CMS simultaneously proposed the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model, a mandatory payment demonstration that will fundamentally reshape how inflation rebates are calculated for high-cost Part D drugs. Together, these proposals signal the Trump Administration’s most aggressive push yet to align U.S. drug prices with international reference pricing benchmarks, extending the reach of global drug pricing policy directly into the U.S. market access landscape.
What Is the GUARD Model?
The GUARD Model is a mandatory payment demonstration under CMS’s Center for Medicare and Medicaid Innovation (CMMI) authority, proposed under Section 1115A of the Social Security Act. It tests an alternative calculation for Medicare Part D inflation rebates, replacing the existing domestic-based benchmark with one derived from international pricing data across economically comparable countries.
The straightforward version: if your Part D drug’s net price exceeds the price paid in 19 reference countries (adjusted for purchasing power parity), you may owe additional rebates to Medicare beyond existing IRA-mandated inflation rebates. The model is proposed to launch on January 1, 2027 and run through December 31, 2031, with rebate invoicing and reconciliation continuing through December 2033.
Unlike the GLOBE Model, which targets physician-administered Part B drugs, GUARD focuses squarely on retail and specialty pharmacy, the Part D benefit, representing a significant new compliance and financial planning challenge for manufacturers of oral and self-administered specialty therapies.
Which Drugs Are In Scope for GUARD?
The GUARD Model targets single-source drugs and sole-source biologics covered under Medicare Part D that are also subject to the existing Part D Inflation Rebate Program under the Inflation Reduction Act. Importantly, drugs already subject to a Maximum Fair Price (MFP) under the Medicare Drug Price Negotiation Program are excluded.
Manufacturer participation is mandatory for all drugs falling within scope.
Therapeutic categories currently under discussion for the model include high-expenditure specialty categories where Part D net prices are most likely to diverge materially from international benchmarks, including immunological agents, cardiovascular agents, respiratory and pulmonary agents, metabolic bone disease agents, analgesics, anticonvulsants, and antidepressants, the USP categories specified in the proposed rule.
How the GUARD Pricing Mechanism Works
GUARD’s rebate logic builds on the existing IRA Part D Inflation Rebate framework, but replaces the domestic benchmark with an international one. The key question CMS will evaluate: does the manufacturer’s Medicare net price exceed what comparable countries pay, adjusted for their GDP purchasing power?
CMS will set the GUARD benchmark using two data sources, and will apply the greater of the two resulting benchmarks:
Method I (Default, CMS-Determined):
Using commercially available international drug pricing databases (such as IQVIA MIDAS®, Global Data POLI, or Eversana NAVLIN), CMS identifies the lowest country-level average price among 19 reference countries, adjusted for GDP purchasing power parity (PPP). This benchmark is held constant throughout the model period and may reflect list prices, invoice prices, or ex-manufacturer prices depending on data availability.
Method II (Voluntary, Manufacturer-Submitted):
Manufacturers may voluntarily submit volume-weighted net pricing data across the 19 reference countries. CMS then calculates a volume-weighted average net price, adjusted for GDP PPP, which is updated quarterly based on submitted data.
A GUARD rebate is triggered when the manufacturer’s Medicare net price (inclusive of all direct and indirect remuneration rebates and required discounts) exceeds the applicable GUARD benchmark. The rebate owed equals the difference between the existing IRA inflation penalty and the GUARD rebate amount, provided that amount is non-negative. In practical terms, the manufacturer always owes at least the existing IRA inflation rebate, and potentially more if international prices are lower.
The 19 reference countries are the same as those proposed for the GLOBE Model: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.
Strategic Recommendations for Industry
- Assess Your Part D Portfolio’s International Pricing Gap
For each qualifying Part D product, model the gap between your current Medicare net price (post all rebates and discounts) and the likely GUARD benchmark under both Method I and Method II. Products where U.S. net prices significantly exceed international comparators will face the greatest rebate exposure. - Evaluate the Method II Opportunity
Submitting net pricing data under Method II only reduces rebate liability if your volume-weighted international net prices exceed the lowest country price CMS would use under Method I. Work with your international pricing and market access teams to determine whether voluntary submission is advantageous for each product in scope. - Map Your International Pricing Architecture Against the 19 Reference Countries
The GUARD reference countries overlap significantly with key EU markets, Canada, Japan, and South Korea. Consider:- How existing net pricing agreements and rebate structures in these markets will appear in CMS’s benchmark calculations
- Whether GDP-PPP adjustments adequately reflect real market differences in your categories
- The timing and sequencing of any planned price changes in reference markets relative to U.S. launch or repricing events
- Factor GUARD into Pipeline Launch Planning
For drugs not yet launched in Part D-eligible categories, the GUARD Model introduces a new variable in commercialization planning. Consider how launch pricing in major reference countries, particularly Germany, France, and the UK, will set the international benchmark that subsequently drives U.S. Medicare rebate exposure. Early-launch markets that establish low net prices could have outsized long-term impacts on U.S. financial performance.
Global Market Access Considerations
For companies managing both EU and U.S. pricing, GUARD extends the reach of international reference pricing into the heart of the U.S. Part D benefit, a market previously insulated from direct international pricing linkage.
Several strategic implications follow:
- Launch sequencing matters more than ever: early launches in low-price reference countries could permanently anchor the GUARD benchmark for U.S. Medicare purposes, with compounding financial consequences over the model period.
- Gross-to-net transparency increases: Method II’s voluntary net price submission creates pressure to reveal pricing strategies that have historically remained confidential in international markets.
- Integrated global pricing governance is now essential: decisions that were previously made independently by U.S. and international commercial teams now require coordinated strategic oversight from the earliest stages of launch planning.
- Combined GLOBE and GUARD exposure: companies with products in both Part B and Part D must now manage MFN pricing risk across two simultaneous mandatory models, compounding the need for an integrated international pricing strategy.
Frequently Asked Questions About the GUARD Model
Is the GUARD Model finalized?
No. As of early 2026, the GUARD Model remains in the proposed rulemaking phase. The proposed rule was published on December 23, 2025, with a public comment period that closed February 23, 2026. CMS must review comments and publish a final rule before the model becomes operative. It is also subject to potential legal challenges, similar to those that previously halted the International Pricing Index (IPI) and Most Favored Nation (MFN) models.
Which drugs are excluded from the GUARD Model?
Drugs that have been selected for Medicare price negotiation with an established Maximum Fair Price (MFP) under the IRA’s Drug Price Negotiation Program are explicitly excluded from GUARD scope. Part B physician-administered drugs are also out of scope, they are addressed separately by the GLOBE Model.
What is the difference between the GUARD Model and the GLOBE Model?
Both models apply international reference pricing logic, but they operate in different parts of Medicare. The GLOBE Model targets Part B drugs, typically physician-administered biologics and infused therapies. The GUARD Model targets Part D drugs, retail and specialty pharmacy products that patients self-administer. Companies with products spanning both benefit categories face compounding exposure across both mandatory models simultaneously.
Navigate the GUARD Model With Expert Market Access Support
Our team are actively monitoring CMS policy developments, including the GUARD and GLOBE Models, the GENEROUS Model, and related MFN mechanisms, to provide our pharma, biotech, and medical device clients with real-time insights and actionable guidance.
Why Partner With Our Market Access Consulting Experts?
We are a specialized market access consultancy offering bespoke services to pharma, biotech, and medical device companies. Our team brings deep expertise in both U.S. and EU market access, ensuring our clients are well-prepared to navigate complex and rapidly evolving pricing and reimbursement landscapes, including developments like the GUARD Model. We are the preferred partner for many organizations seeking strategic guidance at the intersection of global pricing, HTA, and payer engagement.
• Proven Expertise: with years of experience in global pricing and reimbursement, our team offers strategic insights and practical solutions built on real-world outcomes.
• Tailored Strategies: we understand that each client, product, and market is unique, and we provide customized approaches to address specific challenges.
• Comprehensive Support: from early strategy development through launch and beyond, we offer end-to-end market access support.
• Regulatory & HTA Mastery: our team has deep knowledge of FDA, EMA, and national HTA processes, as well as U.S. and EU payer dynamics, enabling faster, more confident market access decisions.
Get in Touch with Our Market Access Consultancy
Ready to strengthen your Medicare Part D pricing strategy ahead of the GUARD Model? Contact Justin Stindt Consultants today for expert market access guidance tailored to your portfolio.
