Healthy Skepticism Library item: 7735

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Egler M, Geursen R.
Reference pricing: When hope triumphes over reality
Drugs Made in Germany 2002; 45:(2):35-38,40-42

Abstract:

Reference pricing is one of the most frequently used governmental methods of containing growth in pharmaceutical expenditures; beginning with Germany in 1989, many governments have adopted reference pricing either as a replacement or in addition to product specific price controls. Interest in reference pricing continues to increase despite the fact that little hard evidence exists to prove that such systems actually save money in the long-term. This is not surprising. Reference pricing targets only one component of growth as its target are prices. Other key drivers of rising expenditure, such as volume growth and shifts in prescribing to newer, more expensive products, are not addressed. Reference pricing can also have an adverse impact on the quality of care by forcing patients to switch medicines, resulting in compliance and adverse reaction problems that can raise the cost of treatment in hospitals and other parts of the health system. In light of a report from the Norwegian Centre for Economic Analysis (ECON), Norway’s government decided to abolish the reference pricing system by 1 January 2001.