Reforming Drug Pricing: Institutional Lessons from Most Favored Nation (MFN) and Value‐Based Care (VBC) Across Three Health Systems

Context: Global efforts to reform prescription drug pricing must navigate the trade-offs between four core objectives: cost containment, innovation incentives, equitable access, and administrative feasibility. In the United States, the Most Favored Nation (MFN) pricing rule and emerging value-based care (VBC) models reflect divergent strategies for aligning prices with therapeutic value. However, comparative analyses across different health systems are limited. Methods: A structured trade-off matrix was employed to compare pharmaceutical pricing strategies in the U.S., Canada, and the UK across four dimensions: cost containment, innovation incentives, equity in access, and implementation feasibility. The comparison is drawn from peer-reviewed scholarly literature, policy studies, and regulatory publications spanning the period 2007 to 2025. Findings: The MFN model offers short-term savings but can also hinder innovation and outcome-based reimbursement in fragmented systems such as the U.S. The UK achieves a significant value, as well as pricing alignment, from centralized authorities such as NICE and the VPAG scheme. Canada, through the PMPRB, can enforce adequate price controls and international referencing; however, it fails to incorporate VBC principles and risk-sharing mechanisms. Conclusions: Global models offer guiding principles, whereas sustainable pricing reforms must be designed to fit local political, institutional, and market conditions. Value-based incentives combined with cross-country yardsticks in hybrid models, though flexible and transparent, can create a more feasible reform approach for the U.S..