MFN in unlikely places

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Trade economists are very familiar with “most-favored nation” status. The non-discrimination principle lies at heart of the GATT-WTO post-WWII global trading regime, and its history goes back even further. Here’s a 1901 book on MFN clauses in trade treaties.

But trade economists probably aren’t so familiar with the use of “most-favored-nation clauses” in healthcare markets. The term has been appropriated without modification, so “most favored nation” really means “most favored third-party payor” in a contract with a healthcare provider.  And while MFN is largely favored by trade economists, it seems that “MFN” clauses in healthcare contracts may cause lots of trouble.

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