Health & Biomedical Sciences Faculty Publications
Document Type
Article
Publication Date
5-2026
Abstract
Background: 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.
Methods: 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.
Results: 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.
Conclusions: 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.
Recommended Citation
Adegoke, K., Durojaye, O. A., Adegoke, A., & Adegoke, A. (2026). Most-Favored-Nation Benchmarking Versus Value-Based Contracting: Institutional Fit of Pharmaceutical Pricing Tools in the United States, Canada, and the United Kingdom. Health Services Insights, 19, 11786329261448992. https://doi.org/10.1177/11786329261448992
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Publication Title
Health Services Insights
DOI
10.1177/11786329261448992
Comments
Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License