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

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.

Plain Language Summary

Prescription medication prices are often high, making it difficult for people to access the medicines they need. This study examines how three countries, Canada, the United Kingdom, and the United States, attempt to control prices while supporting fair access and workable implementation. We focus on two main approaches: using international price benchmarks to inform pricing (international reference pricing/MFN-type designs) and paying based on a drug’s clinical value or outcomes (value-based care/value-based contracting). We found that countries differ mainly because their health systems are organized differently. The United Kingdom’s centralized structure supports more consistent policy implementation, while the United States’ multi-payer structure creates greater legal, administrative, and data challenges. Canada shows strong price regulation and baseline access, but policies vary across provinces and outcomes-based contracting is less common. Newly assessed March 5, 2026, U.S. proposals (GENEROUS, GLOBE, GUARD) suggest continued federal interest in international benchmark-based approaches, but these are recent and do not yet have outcome evidence. We suggest a combined approach in the United States: use international benchmarks to strengthen negotiations and expand value-linked contracts only where measurement and coordination are feasible.

Introduction

In August 2024, the Centers for Medicare and Medicaid Services (CMS) publicly disclosed, for the first time, the negotiated prices for high-cost drugs under the Medicare Drug Price Negotiation Program for the 2026 coverage year. ¹ Simultaneously, its UK counterpart introduced a reformed voluntary scheme for brand medicine pricing, access, and growth (VPAG), tightening revenue limits and easing access flexibility. ² With these reforms, a turning point has occurred in pharmaceutical policy in high-income countries, as governments face rising expenditures while aiming to preserve innovation and protect equitable access and financial protection.

Despite increasing investments in biomedical research, costly medicines continue to widen access gaps and strain public resources.^3,4 Policymakers face the difficult challenge of balancing drug affordability and fairness without stifling innovation or overwhelming administrative systems.

The two pricing reform strategies in both countries are the Most Favored Nation (MFN) pricing, which bases domestic prices on international standards, and Value-Based Care (VBC), which aligns payments with clinical outcomes.^5,6 MFN can result in short-term budget cuts but may reduce innovation and lead to litigation challenges. VBC can support long-term cost reduction while delivering value, but it depends on strong infrastructure, clear metrics, and payer cooperation. ⁷ CMS Innovation Center model designs have advanced international benchmark-based approaches through GENEROUS (Medicaid) and proposed mandatory models for Medicare Part B (GLOBE) and Part D (GUARD); these initiatives are at the design stage and require future evaluation of realized effects.^8-10

This study compares the MFN/VBC functioning in three institutional environments: Canada, the United Kingdom, and the United States. Canada’s centralized pricing oversight through the PMPRB supports cost control, but system performance is constrained by inter-jurisdictional processes and negotiated coverage pathways that can reduce transparency and slow access to new medicines.^11,12 In the United Kingdom, the approach combines cost-effectiveness with outcome-linked pricing under NICE and the reformed VPAG program within its centralized National Health Service (NHS) system.^2,13 Meanwhile, U.S. reforms are hindered by fragmented payers, disputed authority, and underdeveloped infrastructure.

Using a trade-off matrix within a structured framework, we evaluated the performance of the MFN and VBC models across four policy goals: cost containment, value-linked incentive design, equity of access, and implementation feasibility. This research is guided by institutional and governance theories, highlighting how health system design influences the implementation of reform.^14,15

This study contributes (1) a cross-contextual framework for comparing pricing instruments, (2) an institutional account of why tool performance varies across governance settings, and (3) a hybrid U.S. pathway that combines international price anchoring with value-linked reimbursement calibrated to implementation constraints.^16-19

Knowledge Gap and Contribution

Existing research on international/external reference pricing and performance- or outcomes-based agreements often evaluates these tools within individual jurisdictions and emphasizes observed price effects, coverage decisions, or implementation experience in specific systems rather than comparative institutional fit. ²⁰ Less attention has been given to how governance capacity, legal authority, administrative/analytic capability, and data/coordination infrastructure, conditions whether these tools can be implemented at scale and aligned with cost containment, value-linked incentive design, equity of access, and implementation feasibility. ⁷ Drawing on institutional and governance theories^15,18 and policy-capacity concepts, ²¹ , this study applies a rubric-anchored trade-off matrix to assess policy design features across the United States, Canada, and the United Kingdom. In doing so, it shifts the focus from whether a pricing tool is attractive in principle to whether it is institutionally workable across contrasting governance configurations.

This research addresses a critical policy moment: as the U.S. begins Medicare drug price negotiations under the Inflation Reduction Act (IRA) and the UK reorganizes VPAG, a comparative study of institutional pricing tools is both timely and essential. Our trade-off matrix offers a conceptual and practical framework to guide these reforms.^1,2 Accordingly, this study makes three contributions. First, it provides a structured cross-national framework for comparing two major families of pharmaceutical pricing tools. Second, it explains why tool performance may vary across governance settings even when similar pricing concepts are invoked. Third, it offers a more institutionally realistic interpretation of U.S. reform options by considering when benchmark-based pricing and value-linked contracting may function as complements rather than stand-alone solutions.

Conceptual Framework and Methodology

Conceptual Approach: Pricing Tools as Institutional Design Choices

This study employs a structured comparative policy framework to evaluate the institutional alignment of MFN pricing and value-based care (VBC) models across four interconnected policy dimensions: cost containment, incentive design, equity of access, and implementation feasibility. These dimensions are derived from the value-based pricing literature,^7,22 institutional and governance theories of health policy (which emphasize how policy outcomes are shaped through institutional channels linking authority, financing, and coordination),^14,15,18, as well as cross-national research on pharmaceutical regulation.^19,23

We examine pharmaceutical pricing as a set of institutional trade-offs that depends on the structure of the health system and public policy capacity. Policy capacity is defined as the combination of analytical, operational, and political skills at the system, organizational, and individual levels. ²¹ These factors shape the introduction, negotiation, and maintenance of reforms. From this perspective, governance structures, rather than technical evaluations alone, condition how pricing tools are designed and implemented. These assumptions guided our development of a four-component trade-off matrix to compare MFN/IRP and VBC tool alignment across countries.

Case Selection: Contrasting Governance Regimes (U.S., Canada, U.K.)

We intentionally sampled three nations, the United States, Canada, and the United Kingdom, each representing distinct institutional frameworks: a market-disintegrated system (United States), a mixed public-private system (Canada), and a centrally coordinated single-payer system (United Kingdom). This research design helps examine how institutional logic influences the implementation and effects of pricing tools across diverse institutional contexts.^14,24 This “most-different systems” sampling is intended to test institutional fit (governance capacity and integration) rather than to represent the full diversity of high-income pricing governance.

Data Sources: Policy, Regulatory, and Institutional Documents

Our review analyzed 37 documents published from 2007 to 2025, including peer-reviewed articles, government white papers, reports from government agencies, and grey literature. The primary sources examined were CMS advisories and policy documents on MFN and related pricing models,^1,5 PMPRB guidelines, ¹¹ and NICE appraisal updates. ¹³ We performed a structured document search across PubMed, JSTOR, Google Scholar, and policy repositories, including CMS, DHSC, OECD, and WHO IRIS. Selection followed PRISMA guidelines; ²⁵ were included based on relevance to pricing models, regulatory tools, and outcome-based contracting. Search terms, inclusion/exclusion criteria, and the final document list are provided in Appendix.

Documents were included if they directly described pricing tool design features, governance arrangements, implementation requirements, or institutional constraints relevant to MFN/IRP-type pricing or value-linked contracting in the United States, Canada, or the United Kingdom. Documents were excluded if they addressed pharmaceutical pricing only indirectly, focused narrowly on clinical efficacy without relevance to pricing or governance, or duplicated information already captured in a more authoritative primary policy source. The document sample was purposively selected to support a focused comparative policy analysis of institutional design alignment, rather than an exhaustive, systematic review of all pharmaceutical pricing literature.^26,27

Analytical Strategy: Trade-Off Matrix for Institutional Design

Documents were analyzed using deductive content analysis. Extracts were categorized into four predefined groups: (1) mechanisms of cost containment, (2) incentive design, (3) equity of access, and (4) implementation feasibility. We rated alignment in each category for each country-policy pair (eg, MFN/IRP-United States; VBC-Canada) on a 1 to 5 scale. Ratings were based on documented policy design features rather than realized outcomes and were calibrated through within-case synthesis and cross-case comparison. This matrix approach aligns with comparative policy methods in health system research.^23,24

To strengthen transparency and reduce subjectivity, the 1 to 5 scores were assigned using pre-specified rubric anchors for each dimension (Appendix), and each cell score is accompanied by a brief justification and a mapped evidence set (policy primary sources plus supporting peer-reviewed or synthesis sources). When evidence supported adjacent scores, a conservative rule was applied (the lower score) unless multiple independent sources supported a stronger alignment. Scoring emphasizes implementability-related design features (eg, legal authority, administrative/analytic capacity, and data/coordination infrastructure) rather than claimed or expected effects.

A sensitivity analysis was conducted by re-examining borderline cells under a stricter interpretation of the scoring rubric. In practical terms, this involved reassessing cases in which adjacent scores were plausible, such as whether the United States should receive a 2 rather than a 3 on cost containment, or whether Canada should receive a 3 rather than a 4 on implementation feasibility. The overall comparative pattern remained unchanged: the United Kingdom continued to show the most consistent institutional alignment across dimensions, while the United States remained lowest on equity and feasibility. Divergences were therefore resolved through rubric-guided reassessment and conservative scoring rather than ad hoc preference. ²⁸

As shown in Figure 1, the United Kingdom demonstrates the most consistently high institutional alignment across the four dimensions. The matrix summarizes comparative alignment for cost containment, value-linked incentive design, equity of access, and implementation feasibility, illustrating how governance capacity and institutional configuration condition the implementability of MFN/IRP anchoring and value-linked contracting approaches.^1,2,11,13 Scores reflect coded policy design features rather than realized outcomes (Appendix).

Figure 1.

Institutional alignment heatmap for MFN/VBC-related pricing governance (1-5).

Scores reflect coded policy design features and governance capacity across cost containment, incentive design, equity, and implementation feasibility; they do not represent realized outcomes. See Appendix for rubric anchors and cell-level evidence mapping.

Scope and Design Constraints (Non-Outcome-Based Assessment)

We did not aim to measure health or economic outcomes. Stakeholder perspectives and implementation timelines vary by country and are not directly evaluated. Ratings reflect relative policy design rather than effectiveness. We also recognize variation in how VBC is defined and implemented, complicating direct comparisons across contexts. ²⁹ Accordingly, high alignment scores should not be interpreted as superior realized outcomes, and outcome performance may diverge from design alignment.

Results: Comparative Trade-Offs Across Systems

We used the trade-off matrix to evaluate the performance of MFN and VBC models across four key dimensions in the United States, Canada, and the United Kingdom: cost containment, incentive design, equity of access, and implementation feasibility. Table 1 summarizes these scores based on institutional characteristics and published policy tools, rather than outcome measures.

Table 1.

Comparative institutional alignment scores across three pharmaceutical pricing systems.

Dimension	U.S. (MFN/VBC)	Canada (PMPRB)	UK (NICE/VPAG)
Cost containment	3/5—Suspended MFN, fragmented VBC	5/5—Strong regulatory ceilings	5/5—NICE + revenue caps
Innovation incentives	3/5—Mixed; VBC supports R&D	3/5—Conservative pricing, weak VBC	5/5—Value-linked access
Equity	2/5—Fragmented coverage	5/5—Broad baseline access	5/5—NHS universalism
Feasibility	2/5—Legal and political hurdles	4/5—Provincial variation	5/5—Centralized integration

United States: MFN-Style Proposals and Fragmented VBC Infrastructure

The U.S. MFN pricing experiment under the CMS 2020 interim final rule highlights the difficulty of applying international benchmarks within a politically contested system. Although it was projected to save $85.5 billion over 7 years, legal challenges were quickly filed against the rule, leading to its eventual suspension.^5,16 Value-based care models, including those associated with the CMS Innovation Center, remain underutilized, with only four of 50 demonstrations yielding net savings. ¹⁷ Structural barriers, such as weak interoperability of outcome data, dispersed payer alignments, and misaligned provider incentives, continue to obstruct scaling value-based care.^6,21

CMS Innovation Center model designs have also advanced international benchmark-based approaches through the GENEROUS model (Medicaid) and proposed mandatory models for Medicare Part B (GLOBE) and Part D (GUARD).^8-10 These initiatives remain largely at the design stage and therefore provide limited empirical evidence of realized impacts.

Furthermore, MFN-type approaches target prices directly but face legal unpredictability and implementation risk. ⁵ VBC aligns payment with clinical outcomes but relies heavily on stable governance, usable endpoints, and enabling infrastructure. ⁷ These tool families have not eliminated persistent inequities in drug access in the United States, particularly across payer types and among uninsured or underinsured populations. ³

Canada: PMPRB-Based Price Regulation and Limited Outcome-Linkage

Canada’s pricing system, primarily overseen by the Patented Medicine Prices Review Board (PMPRB), demonstrates strong cost control through reference-based approaches and regulatory measures. ¹¹ Public coverage plans and risk pooling support baseline access, although equity is challenged by provincial formulary differences and coverage levels. ¹²

Incentive design remained moderate. Although national Canada’s Drug Agency (CDA) endorse Health Technology Assessment (HTA) and reimbursement recommendation processes support value-based assessments, pricing, and coverage arrangements have not consistently shifted toward outcomes-based contracting. The latest PMPRB guidelines (2025-2026) emphasize procedural transparency but do not institutionalize performance-linked pricing at scale. Political feasibility is also moderate: federal pricing tools operate within a federal/provincial landscape, and jurisprudential rulings have constrained some price-formula mechanisms. ¹¹

United Kingdom: NICE/VPAG and Integrated Value-Based Design

UK alignment scores were consistently high across all four areas. NICE appraisal processes are integrated into coverage decisions, while VPAG governance includes revenue controls and mechanisms that can support access arrangements.^2,13 The NHS single-payer structure enhances feasibility through centralized reimbursement management, coordinated implementation, and standardized access pathways.^15,18 To avoid conflating institutional design with performance, these scores reflect governance integration and documented policy design features rather than realized outcomes in innovation, access, or population health equity. ²⁹

Cross-System Comparison: Institutional Fit and Relative Design Strengths

Table 1 summarizes institutional alignment scores across the four dimensions. Overall, the United Kingdom demonstrates the most consistent alignment, reflecting centralized integration of HTA, pricing, and coverage tools. Canada shows strong alignment on cost containment and equity, with feasibility moderated by provincial implementation variation and a more conservative posture toward value-linked contracting. The United States shows comparatively lower alignment on equity and feasibility, reflecting fragmented coverage and contested authority; while MFN/IRP and VBC elements exist, implementation has been episodic and difficult to scale.^5,11,18,21

The United Kingdom aligns most consistently; Canada is strong on cost containment and equity, with feasibility moderated by provincial variation; the United States is lowest on equity and feasibility due to fragmented coverage and contested authority.^5,11,18,21

Discussion: Institutional Fit, Design Trade-Offs, and Policy Implications

This analysis indicates that institutional design—not only the selection of pricing tools, but also the conditions under which pharmaceutical pricing reforms can plausibly align with cost containment, equity of access, incentive design, and implementation feasibility. While MFN/IRP anchoring and VBC arrangements are often presented as competing strategies, the cross-system comparison suggests they are modular tools whose performance depends on compatibility with governance structures and policy capacity.^18,21

Figure 2 shows the governance-to-tool pathways that drive these differences. Institutional coherence, especially the coordination of regulatory authority, purchasing power, and evaluation functions, determines how pricing tools lead to expected trade-offs across the four dimensions.

Figure 2.

Governance-tool pathway model.

This conceptual model maps how MFN/IRP anchoring and VBC implementation interact with national health system governance types (market-fragmented, hybrid federal/provincial, single-payer centralized). Arrows represent institutional pathways through which legal authority, administrative/analytic capacity, and data infrastructure/payer coordination mediate implementation and expected trade-offs. Scores referenced in the model reflect coded policy design alignment and implementability, not realized outcomes.^5,18,21

The model depicts institutional mechanisms, not realized outcomes (see Appendix for rubric anchors and evidence mapping).

The UK case illustrates the advantages of centralized integration: NICE appraisal processes are closely linked to coverage decisions, and VPAG governance provides system-level mechanisms relevant to price control and access arrangements.^2,13 In contrast, the United States operates within contested authority and fragmented purchasing, making MFN-type approaches and broad VBC scaling vulnerable to litigation risks, stakeholder resistance, and uneven infrastructure, constraints that can delay implementation and reduce feasibility.^5,16,21 The UK’s “high alignment” reflects governance integration and policy design features; it should not be interpreted as evidence of superior realized equity or innovation outcomes.

Canada falls between these poles. The PMPRB provides structured ceiling-setting and supports affordability objectives, but adoption of outcomes-linked payment at scale remains limited and heterogeneous across provincial coverage contexts.^11,12 These patterns underscore the difficulty of layering new instruments onto existing structures without complementary investments in infrastructure, contracting capability, and inter-jurisdictional coordination.^11,12,21

For U.S. policymakers, the findings suggest that relying on MFN/IRP anchoring or VBC arrangements as stand-alone reforms is unlikely to succeed without parallel investments in authority clarity and implementation capacity. A sequenced hybrid approach may be more workable, using international benchmarks as negotiation inputs while expanding value-linked agreements in contexts where endpoints, data infrastructure, and contracting mechanisms are sufficiently mature.^6,7,21

However, the CMS Innovation Center’s GENEROUS model and the proposed GLOBE (Part B) and GUARD (Part D) models reflect continued federal interest in international benchmark-based designs beyond the 2020 MFN rule.^8-10 Because these initiatives are recent and largely at the design stage, future evaluation will be required to assess realized impacts on affordability, access and equity, administrative burden, and incentive effects.

This interpretation is consistent with the National Academies’ emphasis on combining pricing leverage with implementation-realistic purchasing strategies. ⁴ It also aligns with findings from a switching-behavior analysis in competitive insurance markets, which show that price and value signals influence decisions only when consumers are presented with credible alternatives. ²⁴ As Bardach and Patashnik ³⁰ argue, successful reform frequently depends less on selecting a single “best” tool than on assembling feasible combinations that can pass through institutional bottlenecks.

Accordingly, U.S. reforms should not assume a straightforward transfer of UK or Canadian mechanisms; rather, the most defensible approach is selective adaptation (eg, VPAG-type governance levers or PMPRB-type comparator structures) calibrated to U.S. legal authority, payer fragmentation, and data/contracting constraints.^18,21 Finally, beyond the U.S. case, the trade-off matrix offers a structured approach to assess whether proposed pricing reforms are institutionally implementable and aligned with stated policy goals across governance contexts. This framework is intended as a diagnostic of institutional alignment and implementability, not a direct measure of realized health, equity, or innovation outcomes.^18,21

Limitations of a Design-Focused Comparative Approach and Directions for Future Research

This research was limited by its document-based analysis, without stakeholder interviews or process tracing. Trade-off scores measure institutional design rather than realized outcomes. In particular, VBC models are defined and implemented differently across contexts, complicating direct comparison. Additionally, the analysis considers only three high-income countries, limiting transferability to middle-income settings or decentralized systems. Importantly, UK “high alignment” scores should not be interpreted as evidence of superior realized equity or innovation outcomes; outcome performance may diverge from design alignment.

Future research should broaden this framework to include additional governance archetypes and mixed-payment systems, incorporate perspectives from payers and industry, and apply process tracing to observe implementation dynamics over time. It should also examine how a U.S.-specific value assessment framework could help define the policy endpoint of MFN-type pricing reforms, rather than relying only on external price benchmarks. ³¹ Comparative stakeholder-focused research and ethnographic methods may help explain how actors manage tensions among affordability, incentive design, and equitable access.

Conclusion and Recommendations: Designing Feasible, Value-Oriented Pricing Regimes

Pharmaceutical pricing reform involves more than selecting a tool; it requires aligning policy design with governance capacity. This cross-case comparison indicates that MFN/IRP anchoring and VBC approaches vary in institutional alignment depending on legal authority, administrative capacity, and payer/data infrastructure.^18,21 Because the UK’s centralized architecture integrates HTA and pricing governance, it can more readily support routinized appraisal-linked reimbursement and access governance. The United States and Canada, by contrast, illustrate the constraints of implementing similar tool designs in fragmented or partially coordinated systems.^15,18

For the United States, the findings support a mixed approach grounded in institutional realism and sequenced implementation. Three practical steps follow:

1. Use international benchmarks as negotiation reference points for public purchasers (not strict ceilings), to strengthen bargaining leverage and transparency while reducing legal vulnerability through clear statutory and operational guardrails.^1,5

2. Expand value-linked/outcome-based contracts selectively, tied to measurable endpoints, auditable data, and feasible contracting capacity, rather than broad mandates that outpace infrastructure.^7,17

3. Invest in enabling infrastructure and coordination as prerequisites for tool transfer, including real-world evidence capability, contracting standards, and payer-provider coordination mechanisms.^4,21

These recommendations align with the principle that feasible combinations of reforms often outperform single-tool solutions when policy change must pass through institutional bottlenecks.

In general, the trade-off matrix offers a reproducible approach for assessing institutional alignment and implementability of pharmaceutical pricing reforms across governance contexts. Future research should extend the framework to additional high-income archetypes and incorporate stakeholder evidence to characterize implementation pathways over time.

Appendix: Scoring Rubric, Coding Anchors, and Evidence Map

Purpose of the Scoring Matrix

The 1 to 5 scores reported in Table 1 capture institutional alignment of policy design features with four policy dimensions: cost containment, incentive design, equity of access, and implementation feasibility. Scores reflect documented governance, administrative capacity, and implementational design rather than realized outcomes.

Unit of Analysis

The unit of analysis is the country-level pricing governance configuration relevant to MFN/IRP anchoring and value-based contracting logic:

• United States: MFN attempt/proposals and VBC pilots, including enabling authority, payer structure, and data/contracting infrastructure.

• Canada: Federal price regulation capacity (PMPRB) plus HTA and coverage context shaped by provincial implementation.

• United Kingdom: NICE appraisal integration with coverage decisions and VPAG governance mechanisms within a centralized NHS structure.

Evidence Base (Document Set)

Evidence included the following document categories (2007-2025):

1. Statutes/regulations and official guidance (eg, CMS MFN rule and related guidance; PMPRB guidelines; VPAG policy documents).

2. HTA and appraisal guidance (eg, NICE methods updates and appraisal governance).

3. Peer-reviewed literature addressing MFN/IRP, HTA/value-based reimbursement, and outcome-based agreements.

4. International and national reports (eg, OECD and other national agency publications relevant to pricing governance).

• Inclusion rule: Documents were included if they directly described pricing tool design features, governance arrangements, implementation requirements, or the institutional constraints that condition tool use.

Scoring Rubric (Coding Anchors for 1-5 Scores)

A single rubric was applied across countries for each dimension:

Cost containment (1-5)

• 1 = No credible pricing leverage; limited capacity to negotiate or cap prices.

• 2 = Fragmented/partial leverage; contested authority; limited scale.

• 3 = Some effective levers exist but are episodic, limited-scope, or easily disrupted.

• 4 = Strong levers with routine application; some fragmentation or exemptions.

• 5 = Systematic and enforceable mechanisms (eg, negotiated ceilings/caps) applied at scale.

Incentive design (1-5) (evaluates value-linked incentive design, not national innovativeness)

• 1 = Pricing rules largely disconnected from therapeutic value or incentive design.

• 2 = Limited/irregular linkage between value assessment and pricing; narrow managed-entry use.

• 3 = Mixed linkage—some value-based elements, but inconsistent uptake or weak enforcement.

• 4 = Regularized value assessment informs pricing/access; structured managed-entry pathways.

• 5 = Systematic value assessment integrated into pricing/access with predictable pathways and uncertainty management.

Equity of access (1-5)

• 1 = High coverage fragmentation; large uninsured/underinsured gaps; uneven access.

• 2 = Partial protections; substantial access gaps remain across groups/regions.

• 3 = Broad baseline access but material inequities persist (eg, regional/formulary variation).

• 4 = Near-universal baseline access with limited residual inequities.

• 5 = Universal baseline access with strong national mechanisms to reduce inequities.

Implementation feasibility (1-5)

• 1 = Low feasibility (legal barriers, lack of authority, absent infrastructure).

• 2 = Significant barriers (litigation risk, low administrative capacity, misaligned incentives).

• 3 = Feasible in pilots or limited contexts; barriers to scaling.

• 4 = Generally feasible with manageable operational/political constraints.

• 5 = High feasibility due to centralized governance, clear authority, and mature infrastructure.

Coding Procedure

Documents were analyzed using deductive coding mapped to the four predefined dimensions. Scores were assigned after within-case synthesis and then cross-case calibration. When evidence supported adjacent scores, a conservative scoring rule was applied (the lower score) unless multiple sources supported stronger institutional alignment (Tables A1-A3).

Table A1.

Coding Rubric and Scoring Criteria for the Comparative Trade-Off Matrix (Cost Containment, Innovation Incentives, Equity, and Feasibility).

Dimension	Score 1	Score 2	Score 3	Score 4	Score 5
Cost containment	No meaningful national price regulation; limited or purely voluntary pilots; prices determined mainly by manufacturers and fragmented purchasers	Partial or narrow controls (eg, limited to specific program or drug classes) with weak enforcement or large gaps in scope	Mixed tools with moderate impact (eg, some statutory ceilings or rebates) but inconsistent application across payers or product types	Broad, institutionalized mechanisms (eg, national comparators or revenue controls) covering most high-cost drugs, with evidence of budget impact management	System-wide, consistently enforced tools (eg, national HTA-linked pricing with revenue caps) that systematically anchor prices and are embedded in routine purchasing
Innovation incentives	No explicit link between price and value; pricing is mainly independent of clinical benefit	Occasional or ad hoc consideration of value or outcomes, but not systematically tied to prices or access decisions	Cost-effectiveness or outcomes sometimes shape reimbursement, but with limited transparency or coverage; outcome-based contracts are rare	Structured processes (eg, HTA or conditional reimbursement) that link value to coverage and price for selected products or indications	Systematic, transparent value-based frameworks where clinical benefit and cost-effectiveness consistently inform prices, access, and managed-entry agreements
Equity of access	Highly fragmented coverage; large uninsured or underinsured populations; substantial financial barriers to essential medicines	Some safety-net or public program, but major gaps in coverage or large regional/socioeconomic disparities	Broad coverage for many populations, but persistent inequities by income, geography, or payer; significant cost-sharing for some groups	Near-universal coverage for essential medicines with limited financial barriers, though some variation in formularies or co-payments remains	Universal or near-universal coverage with minimal financial barriers, strong protections for vulnerable groups, and explicit equity-oriented design
Implementation feasibility	Reforms are frequently blocked or reversed by courts or political opposition; little administrative capacity to implement complex contracts	Pilots or proposals exist but face recurring legal, technical, or coordination barriers; limited data infrastructure	Mixed feasibility: some tools implemented, others stalled; uneven capacity across agencies or jurisdictions	High feasibility: stable legal authority, capable agencies, and workable data systems, with occasional political or technical friction	Very high feasibility: strong and stable legal mandate, integrated governance (regulator-payer-HTA alignment), mature data infrastructure, and a track record of implementing and maintaining complex pricing tools

Table A2.

Cell-Level Design-Feature Justifications (One-Sentence Rationale per Score).

Dimension	United States (MFN/VBC)	Canada (PMPRB)	United Kingdom (NICE/VPAG)
Cost containment	MFN attempt was suspended; VBC levers exist but are fragmented and hard to scale.	Enforceable ceiling-setting and reference mechanisms support systematic price control.	Integrated HTA and VPAG governance enable routine cost containment at scale.
Incentive design	Selective pilots link payment to value, but uptake is inconsistent across payers.	HTA exists, but outcome-based agreements remain limited and unevenly adopted.	Value assessment is integrated into access decisions with managed-entry flexibility.
Equity of access	Coverage and purchasing are fragmented across payers, producing persistent access gaps.	Broad baseline access through public plans, with some provincial/formulary variation.	Universal coverage through NHS with nationally coordinated access pathways.
Implementation feasibility	Litigation risk and contested authority reduce feasibility; infrastructure is uneven.	Feasible within federal ceiling-setting, but provincial implementation varies.	Centralized authority and administrative integration support implementability.

This table provides short, cell-level justifications corresponding to Table 1/Figure 1.

Table A3.

Evidence Maps for Scores (Design-Feature Justification with Anchor Sources).

Dimension	Country	Score	Design-feature justification (1-2 sentences)	Anchor sources
Cost containment	United States	3	MFN-style price anchoring was advanced through federal rulemaking but was suspended/blocked; value-based models exist but remain fragmented and difficult to scale across payers and providers.	CMS (2020), ASPE (2020), CMS (2021), Kesselheim et al. (2016)
Cost containment	Canada	5	Federal price regulation provides structured ceiling-setting and reference-based benchmarks; baseline access is supported through public drug plans, although coverage administration varies provincially.	PMPRB (2025), OECD (2021), Lexchin (2022)
Cost containment	United Kingdom	5	Centralized HTA informs coverage and pricing decisions, and VPAG provides a routinized governance mechanism (including revenue controls) applied within an integrated NHS structure.	DHSC (2023), NICE (2025), OECD (2021), Paris and Belloni (2013)
Incentive design	United States	3	Value-linked pilots and selective contracting approaches exist, but adoption is inconsistent across payers and depends on variable data infrastructure and contract administration.	Neumann et al. (2011), Garrison et al. (2013), CMS (2021)
Incentive design	Canada	3	HTA processes inform coverage recommendations, but outcome-based payment models remain limited and uneven, constraining systematic value-linked incentive design.	OECD (2021), Garrison et al. (2013), PMPRB (2025)
Incentive design	United Kingdom	5	Value assessment is systematically integrated into access decisions, with established appraisal and managed-entry mechanisms that support predictable value-linked pathways.	NICE (2025), DHSC (2023), Paris and Belloni (2013)
Equity of access	United States	2	Purchasing and coverage are fragmented across multiple payers, contributing to persistent gaps in access and uneven affordability protections across populations.	Kesselheim et al. (2016), National Academies (2017)
Equity of access	Canada	5	Broad baseline access is supported through public coverage structures, though provincial formulary and cost-sharing variation can generate residual inequities.	OECD (2021), Lexchin (2022)
Equity of access	United Kingdom	5	Universal NHS coverage provides strong baseline access protections with nationally coordinated access pathways and coverage governance.	Tuohy (1999), NICE (2025), DHSC (2023)
Implementation feasibility	United States	2	Implementation is constrained by contested legal authority, litigation risk, and uneven data/contracting infrastructure needed for scaling MFN-style benchmarks and outcome-based contracting.	CMS (2020), ASPE (2020), Wu et al. (2015)
Implementation feasibility	Canada	4	Federal ceiling-setting is institutionally feasible, but implementation varies across provinces and payers, creating administrative complexity that can limit uniform scaling.	PMPRB (2025), OECD (2021), Tuohy (1999)
Implementation feasibility	United Kingdom	5	Centralized governance, clear institutional authority, and integrated administrative structures support routinized implementation of appraisal-linked pricing and VPAG governance.	DHSC (2023), NICE (2025), Tuohy (1999)

This table documents the audit trail for each score using 1-2 sentence design-feature justifications and key anchor sources (policy primary sources plus supporting literature/reports).

Sensitivity/Robustness Check

As a robustness check, borderline cells were re-scored under a stricter rubric (eg, United States cost containment 3↔2; Canada implementation feasibility 4↔3). The overall pattern remained unchanged: the United Kingdom showed the most consistent institutional alignment across dimensions, while the United States remained lowest on equity and feasibility.