Most-Favored-Nation Benchmarking Versus Value-Based Contracting: Institutional Fit of Pharmaceutical Pricing Tools in the United States, Canada, and the United Kingdom.

Authors

Kola Adegoke, Olajide Alfred Durojaye, Abimbola Adegoke, Adeyinka Adegoke

Published in

Health services insights. Volume 19. Pages 11786329261448992. Epub May 19, 2026.

Abstract

Soaring drug prices pose a significant obstacle to affordable and equitable access to medicines in high-income healthcare systems. This study compares two leading reform tool families, Most Favored Nation (MFN)/international reference pricing (IRP) and value-based contracting (VBC), across the United States, Canada, and the United Kingdom, with attention to cost containment, value-linked incentive design, equity of access, and implementation feasibility. U.S. policy developments (CMS Innovation Center's GENEROUS, GLOBE, and GUARD models) extend international benchmark-based design options beyond the 2020 MFN rule.
Guided by institutional and governance theories, we conducted a structured comparative policy analysis using a four-dimensional trade-off matrix. Cases from the United States, Canada, and the United Kingdom were selected using a most-different-systems design. Documents from 2007 to 2025 were coded for cost containment, value-linked incentive design, equity, and implementation feasibility. To reduce subjectivity, scores were assigned using prespecified rubric anchors, conservative scoring rules for borderline cases, and a sensitivity check of adjacent-score judgments. Design-stage U.S. benchmark-based model materials assessed on March 5, 2026, were incorporated descriptively and not considered as outcome evidence.
The United Kingdom model, centered on the National Institute for Health and Care Excellence (UK NICE) and the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), was most consistently aligned across all four dimensions (design-feature alignment). Canada's Patented Medicine Prices Review Board (PMPRB) supports affordability and baseline access, with implementation variation across provinces and more limited adoption of outcomes-based contracting. U.S. MFN/IRP initiatives and VBC pilots show lower alignment on equity and feasibility in a multi-payer environment characterized by contested authority and variable data/contracting capacity. Emerging CMS Innovation Center proposals (GENEROUS, GLOBE, GUARD) indicate continued federal interest in benchmark-based designs, but empirical impacts remain to be evaluated.
MFN/IRP anchoring and VBC are implementation-intensive tools whose performance depends on institutional fit. A hybrid approach, using international benchmarks as inputs for negotiations and expanding value-linked agreements where measurement and governance prerequisites are met, may offer a more feasible U.S. pathway. This study provides a repeatable framework for assessing drug pricing reforms and illustrates how institutional alignment conditions the implementability of tools. Design-feature scores reflect policy design and governance capacity, not realized outcomes.

PMID:
42170588
Bibliographic data and abstract were imported from PubMed on 22 May 2026.

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