Principled Negotiation for Drug Access in Canada & Europe Under Most Favored Nation Pricing
A new medicine does not reach patients because one side “wins” a price argument. It reaches patients when regulators, health technology assessment bodies, payers, manufacturers, clinicians, and patients can accept a shared answer to a hard question: What evidence, price, budget impact, and follow-up commitments make access fair and sustainable?
That question has become harder to answer under the most favored nation pricing and related international reference pricing policies. When one country’s net or list price can influence another country’s position, every market access negotiation becomes part of a wider system. And it does not stop there, as each domestic decision has a domino effect on global markets and negotiations. A concession in one place may affect price corridors elsewhere. A delay in one market may shape expectations in another. A weak evidence file may narrow the room for a confidential access agreement.
"Begin with the end in mind."
Stephen Covey
This is why principled negotiation matters. Since I have been in the pharmaceutical industry in market access, I have been building all my files from A to Z beginning with a systematic process which applies principled negotiation to the entire process. With this mindset from the outset, how can you fail?
The method developed by Roger Fisher and William Ury in Getting to Yes in 1981, later revised with Bruce Patton in 1991 and 2011, is built for negotiations where the parties need more than a signed deal. They need a working relationship, a legitimate process, and a durable agreement.
Most favored nation pricing changes the shape of the negotiation: This requires a mindset shift in negotiation planning
Most favored nation pricing means a buyer links its price to the lowest, or one of the lowest, prices paid by selected peer countries. The concept is related to international reference pricing, a method reviewed by the World Health Organization in its 2020 Guideline on Country Pharmaceutical Pricing Policies.
The United States brought renewed attention to this issue through Executive Order 13948, signed on September 13, 2020, titled “Lowering Drug Prices by Putting America First.” The Centers for Medicare & Medicaid Services then issued the Most Favored Nation Model interim final rule on November 27, 2020. That model was rescinded in 2021 after litigation and implementation challenges, but the policy signal remained clear: large markets may try to use foreign prices as anchors. A price anchor when used in a negotiation changes and alters the trajectory of the negotiation psychologically and behaviourally. This has been demonstrated in the research on "anchoring" in negotiations and how anchoring sets up negotiation outcomes irrespective of plans and desires. Anchoring is a cognitive bias and negotiation tactic where the first proposed number, deadline, or baseline term establishes a psychological reference point that subconsciously influences all subsequent judgments and concessions
For Canada and Europe, this matters even when a U.S. policy is uncertain or changes between administrations. Payers and manufacturers must plan as if prices are connected across markets, because they often are.
Several facts drive this change.
Canada uses a layered access path. Health Canada reviews safety, efficacy, and quality. The Canadian Agency for Drugs and Technologies in Health, now called Canada’s Drug Agency after its 2024 transition, conducts health technology assessment for most provinces and territories. Quebec has its own body, INESSS, created in 2011. The pan-Canadian Pharmaceutical Alliance, established in 2010, negotiates on behalf of participating federal, provincial, and territorial drug plans. Final listing decisions still sit with individual public drug plans.
Canada also changed its patented medicine price review framework. Amendments to the Patented Medicines Regulations came into force on July 1, 2022. The revised comparator country basket removed the United States and Switzerland and added countries such as Australia, Belgium, Japan, the Netherlands, Norway, and Spain. The policy direction reduced reliance on high-price reference countries.
Europe is even more varied. The European Medicines Agency can provide centralized regulatory authorization, but pricing and reimbursement remain national responsibilities. Germany has AMNOG, introduced in 2011. France uses the Haute Autorité de Santé and the Comité économique des produits de santé. England uses the National Institute for Health and Care Excellence, founded in 1999. Italy, Spain, the Netherlands, and the Nordic countries each apply their own mix of clinical value, budget impact, negotiation, and managed entry tools.
Europe is also moving toward more joint clinical work. Regulation (EU) 2021/2282 on health technology assessment applies from January 12, 2025, starting with oncology medicines and advanced therapy medicinal products. Joint clinical assessments do not set prices, but they can shape the evidence base that national payers use.
The result is a negotiation environment with fewer isolated decisions. A market access plan must now assume that clinical value, economic value, affordability, and international price exposure are linked from the start.
Principled negotiation is not the same as positional bargaining
Positional bargaining starts with a demand. One side says “we need this price.” The other says “we can only pay that price.” Each move becomes a concession. The parties measure progress by how far the other side moves.
This can work for a single transaction with no future relationship. It is poorly suited to public drug access, where the parties may need to manage evidence uncertainty, patient eligibility, uptake, outcomes, and budget effects for years.
Principled negotiation starts somewhere else. Fisher and Ury argued in 1981 that negotiators should separate the people from the problem, focus on interests rather than positions, invent options for mutual gain, and insist on objective criteria. Bruce Patton joined later editions, including the 1991 edition of Getting to Yes, which helped popularize BATNA, the best alternative to a negotiated agreement.
The distinction also appears in negotiation scholarship before and after Getting to Yes. Richard Walton and Robert McKersie’s 1965 A Behavioral Theory of Labor Negotiations distinguished distributive bargaining, where parties divide value, from integrative bargaining, where parties create value. Howard Raiffa’s 1982 The Art and Science of Negotiation framed negotiation as both analytical and behavioral. David Lax and James Sebenius expanded this in The Manager as Negotiator in 1986 and later in 3-D Negotiation in 2006, emphasizing deal design and the setup of the negotiation, not just conduct at the table.
Dimension | Positional bargaining | Principled negotiation |
Starting point | Opening demands and counteroffers | Interests, constraints, evidence, and decision criteria |
Measure of progress | Concessions from the other side | Better options that meet legitimate interests |
Use of evidence | Evidence used as ammunition | Evidence used as a shared basis for judgment |
Relationship effect | Often strains trust | Can build trust through process discipline |
Fit for drug access | Weak when uncertainty and follow-up matter | Strong when access depends on evidence, affordability, and future cooperation |
For new medicines, the difference is practical. A company may have a position on price. A payer may have a position on affordability. Behind those positions sit interests.
The manufacturer may need:
A sustainable net price across referenced countries
Recognition of clinical value and unmet need
Predictable access conditions
Protection from uncontrolled spillover into other markets
A fair path for future indications
The public payer may need:
Confidence that the medicine works in the eligible population
A price that matches incremental value
A budget impact that can be managed
A way to handle uncertainty
Equity across patients and therapeutic areas
Principled negotiation asks both sides to design an agreement around those interests instead of trading numbers until one party gives in.
The negotiation process for new medicines should start before the dossier is filed
The mistake in many access plans is timing. Teams often treat negotiation as the final stage, after regulatory approval, health technology assessment submission, and internal price decisions. Under international price exposure, that is too late.
The clinical file, health economic file, and budget impact model must be built with the end in mind: a negotiated agreement with provinces in Canada or national payers in Europe. The goal is not only a positive clinical opinion or a cost-effectiveness result. The goal is a credible agreement that can survive payer review, political scrutiny, patient demand, and future evidence updates.
A practical process should include the following steps.
Map the full access system before setting the price corridor
A systems view comes first. Peter Senge’s 1990 book The Fifth Discipline popularized systems thinking in organizational learning. Donella Meadows’ 2008 Thinking in Systems made the core point plain: outcomes come from relationships, feedback loops, delays, and incentives, not isolated events. John Sterman’s 2000 Business Dynamics applied similar thinking to complex policy and business systems.
For drug access, that means mapping:
Regulatory milestones
HTA timelines and evidence expectations
Comparator choices by jurisdiction
Price reference rules
Confidential discount practices
Budget holders and decision rights
Patient group expectations
Clinician adoption patterns
Future indication sequencing
Real-world evidence commitments
This map should be built before the global price corridor is set. A launch price that solves one market can create a reference problem elsewhere. A confidential discount can help in one country but may still shape payer expectations in another. A delayed launch can protect price but reduce patient access and weaken relationships.
Develop the clinical file around payer questions, not only regulatory questions
Regulators ask whether a medicine is safe, effective, and high quality. Payers ask added questions: compared with what, for whom, at what cost, with what uncertainty, and with what system impact?
The clinical file should prepare for those questions from Phase 2 onward when possible. It should include:
A clear target population that matches expected reimbursement criteria
Relevant comparators used in Canadian and European practice
Patient-relevant outcomes such as survival, disease progression, function, quality of life, adverse events, and treatment burden
Subgroup evidence where reimbursement may be restricted
Indirect treatment comparisons when head-to-head evidence is not feasible
Evidence plans for real-world follow-up
The 2021 EU HTA Regulation increases the value of early clinical planning because joint clinical assessment will focus on relative clinical effectiveness. In Canada, CADTH and INESSS reviews also place heavy weight on the clinical relevance of comparators and outcomes.
A weak clinical file narrows negotiation options. If the payer doubts the evidence, the discussion shifts quickly to discounts, caps, restrictions, or delay. A strong file creates room for more thoughtful solutions, such as staged access, outcomes follow-up, or indication-specific terms.
Build the health economic model as a negotiation tool
A cost-effectiveness model should not be treated as a technical appendix. It is a structured argument about value.
Alan Williams and other health economists helped establish quality-adjusted life years as a policy tool in the 1970s and 1980s. NICE has used cost-effectiveness analysis since its creation in 1999. CADTH has long used pharmacoeconomic review in Canadian drug assessment. The exact thresholds, methods, and decision rules vary, but the core question remains: what health gain is produced for the resources used?
The health economic file should be designed to support negotiation, not just submission. It should make transparent:
Key model drivers
Survival extrapolation choices
Utility values and quality-of-life assumptions
Treatment duration and stopping rules
Resource use and adverse event costs
Uncertainty ranges
Scenario analyses that reflect payer concerns
This matters because objective criteria are central to principled negotiation. Fisher and Ury’s 1981 framework does not ask parties to be soft. It asks them to use legitimate standards. In drug access, those standards include clinical benefit, unmet need, cost-effectiveness, affordability, equity, and uncertainty.
Build the budget impact model with the agreement in mind
The budget impact model is where many access negotiations become real. A medicine can be cost-effective over a lifetime and still create a short-term budget challenge. Public payers must fund this year’s patients with this year’s budget.
For that reason, the budget impact model should be developed early and updated often. It should not be a static spreadsheet made after price decisions are complete.
A strong budget impact model should include:
Eligible population estimates by jurisdiction
Diagnostic rates and treatment initiation assumptions
Uptake curves by province or country
Displacement of current therapies
Administration, monitoring, and adverse event costs
Discontinuation and persistence
Scenario testing for broader or narrower criteria
Gross and net budget views where appropriate
Options for caps, rebates, dose-based terms, or outcomes-linked terms
This is where principled negotiation becomes concrete. If the payer’s interest is budget predictability, the parties can test spending caps or phased access. If the manufacturer’s interest is value recognition, the parties can test performance-based terms or indication-specific arrangements. If both sides need public confidence, they can build evidence generation and review points into the agreement.
Canada and Europe now require earlier and more disciplined planning
The planning burden is rising because access systems have become more connected, more evidence-driven, and more sensitive to price spillover.
In Canada, the sequence from regulatory review to HTA to pCPA negotiation to provincial listing creates multiple points where planning can fail. The pCPA can negotiate a letter of intent, but individual jurisdictions still decide how and when to list. Restrictions may differ. Implementation may vary. A national agreement does not erase local budget pressure.
That makes early provincial thinking essential. A submission strategy should anticipate which provinces face the largest eligible population, which comparators are most used, where specialist capacity may limit uptake, and where public plans may require narrower criteria. The health economic and budget impact files should be able to answer those questions before negotiations begin.
In Europe, the planning challenge is broader because each country has its own pricing and reimbursement logic. Germany’s AMNOG process, introduced in 2011, links added benefit assessment to price negotiation. France grades clinical benefit and improvement in clinical benefit. England’s NICE process weighs cost-effectiveness, uncertainty, and modifiers such as severity. Italy and Spain often use managed entry tools and regional implementation structures. Nordic and Beneluxa collaborations show that countries are willing to share information and coordinate on access questions, even when final decisions remain national.
Most favored nation pricing adds another layer. The order of launch, the public list price, the size and structure of confidential rebates, and the timing of indications all become strategic choices. A country-by-country plan that ignores international feedback loops can produce avoidable failures.
Planning matters because the access negotiation is not a single meeting. It is the end point of many design choices:
Clinical trial comparator selection
Endpoint choice
Subgroup strategy
Evidence generation plan
Global price corridor
Launch sequencing
HTA submission wording
Budget impact assumptions
Contracting options
Governance after listing
A systems thinker treats these choices as connected. A positional bargainer treats them as separate fights. The systems thinker is more likely to produce a file that payers can use and an agreement that can last.
Best practices from principled negotiation scholarship should guide market access teams
Principled negotiation is often summarized too simply. The best scholarship gives practical habits that fit drug access negotiations well.
Prepare interests before positions
Fisher and Ury’s 1981 central rule was to focus on interests, not positions. In a medicine negotiation, this means writing down each side’s likely interests before setting a target price and walkaway point.
For the payer, the interests may include affordability, fairness across therapeutic areas, public accountability, and confidence in evidence. For the manufacturer, they may include value recognition, price consistency across markets, timely access, and predictable uptake.
This preparation changes the discussion. Instead of asking only “what discount will be accepted,” the team asks “what package of price, population, evidence, and risk-sharing could meet both sides’ most serious concerns?”
Use objective criteria and make them visible
Fisher, Ury, and Patton stressed objective criteria in the 1991 edition of Getting to Yes. In drug access, objective criteria may include HTA methods guides, published clinical evidence, treatment guidelines, epidemiology, cost-effectiveness conventions, and budget impact assumptions.
The file should make these criteria visible. If a model uses a survival extrapolation, explain why. If a comparator is excluded, justify it. If the budget impact assumes gradual uptake, show the basis for the assumption. Hidden assumptions damage trust.
Know the BATNA, but do not worship it
BATNA is one of the most cited negotiation ideas from Fisher and Ury. It means the best alternative if the parties fail to reach agreement.
In drug access, the manufacturer’s BATNA may be delayed launch, private market focus, narrower indication strategy, or no listing. The payer’s BATNA may be no reimbursement, restricted reimbursement, use of existing treatments, or waiting for more evidence.
BATNA analysis is necessary, but it can become destructive if used as a threat. Long-term access relationships work better when BATNA clarifies risk and discipline, not when it becomes a weapon.
Create multiple equivalent offers
Lax and Sebenius’ work in 1986 and 2006 emphasized deal design and value creation. One practical method is to create multiple packages that are equivalent in value to one side but different in structure.
For a new medicine, packages might vary by:
Net price
Eligible population
Spending cap
Outcomes follow-up
Rebate timing
Indication sequencing
Duration of agreement
Evidence review points
This helps reveal payer preferences. A payer that rejects a simple discount may accept a smaller discount with a cap. Another may prefer broader access with outcome tracking. Multiple offers turn the negotiation from a single price fight into a design exercise.
Use joint fact-finding when evidence is uncertain
Lawrence Susskind and colleagues have long argued for joint fact-finding in public disputes, including in Susskind, McKearnan, and Thomas-Larmer’s 1999 The Consensus Building Handbook. The idea is simple: when parties disagree about facts, they should agree on how to examine them.
In drug access, this can mean shared evidence review, agreed real-world evidence endpoints, registry design, or pre-specified reassessment triggers. Joint fact-finding is especially useful for advanced therapies, oncology treatments with immature survival data, and rare disease medicines with small trials.
Design contingent agreements
Howard Raiffa’s 1982 work showed how uncertainty can be managed through structured negotiation. A contingent agreement makes future terms depend on future evidence.
For medicines, this can include outcomes-based agreements, coverage with evidence development, price-volume agreements, financial caps, or reassessment after a defined evidence milestone. These tools are not simple to administer. They require data systems, governance, and clear definitions. But they can make access possible when uncertainty would otherwise block agreement.
Protect the relationship through process fairness
Robert Mnookin, Scott Peppet, and Andrew Tulumello argued in Beyond Winning in 2000 that negotiation should manage both the problem and the relationship. Drug access requires repeated contact across products, indications, and evidence updates. A payer and manufacturer may disagree strongly on one file and need to work together on the next.
Process fairness helps. That means clear agendas, respectful conduct, timely responses, documented assumptions, and an agreed path for unresolved issues. These basics sound modest, but they are often what keep hard negotiations from becoming hostile.
Positional bargaining is the wrong mindset for long-term drug access
A positional bargaining mindset creates predictable problems in pharmaceutical access.
It encourages inflated opening positions. The manufacturer may fear that any reasonable opening will be treated as weakness. The payer may respond with a demand that leaves little room for value recognition. The negotiation becomes anchored in claims neither side fully believes.
It narrows the solution space. If the only issue is price, other useful tools receive too little attention. Patient eligibility, evidence development, indication rules, spending predictability, and real-world outcomes may matter as much as the discount.
It damages trust. Public payers are accountable for scarce resources. Manufacturers are accountable for investment, supply, and future research. If each side believes the other is hiding the real problem, the relationship weakens. That makes later renegotiation harder.
It also fits poorly with most favored nation dynamics. A blunt price concession in one country may create exposure elsewhere. A blunt refusal may delay patient access and harm credibility. Both sides need careful deal architecture, not a contest of endurance.
Drug access negotiations are repeated, technical, and public-interest oriented. They call for a partnership mindset, even when the parties have different incentives. Partnership does not mean agreeing easily. It means building a disciplined process where disagreement can be handled without destroying the chance of agreement.
Systems thinking turns negotiation planning into market access strategy
Systems thinking matters because medicine access has feedback loops.
A price in one country may affect another. A comparator choice in a trial may affect HTA conclusions years later. A narrow eligibility rule may reduce budget impact but create clinician frustration. A weak data collection plan may make an outcomes-based agreement impossible. A delayed launch may protect price but reduce trust with patient communities.
Donella Meadows wrote in 2008 that changing a system requires understanding its structure. For market access, the structure includes evidence, incentives, institutions, timelines, and trust. A negotiation team that sees only the final price misses the system that creates the final price.
The best planning starts with the desired end state:
Patients who meet clear criteria can access the medicine.
Payers can explain why the agreement is fair.
The manufacturer receives value recognition within a sustainable global corridor.
Evidence uncertainty is tracked and reduced.
Budget risk is managed.
The agreement can adapt as indications, data, and standards change.
Once that end state is clear, the team can work backward. The clinical file must answer the right comparative questions. The economic file must explain value in terms payers can test. The budget impact model must show affordability under realistic scenarios. The negotiation strategy must include options, not just a price demand. The governance plan must define what happens after listing.
That is the practical meaning of Principled Negotiation for Drug Access in Canada and Europe Under Most Favored Nation Pricing. It is not a soft approach. It is a more demanding one. It requires better preparation, stronger evidence, clearer assumptions, and more careful agreement design.
The takeaway is simple. New medicine negotiations should not begin when the parties sit down to bargain. They should begin when the clinical development plan, economic model, budget impact model, launch sequence, and contracting strategy are first designed. Under international price pressure, the best negotiators are not the loudest positional bargainers. They are the planners who understand the system well enough to build an agreement that can last.
This article is informational only. It is not legal, medical, reimbursement, or pricing advice.
Selected references and resources
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