Books & Papers

Use as Needed
The mixed impact of reference pricing on prescription drug costs
Dated: 20 Sep 2009
Brian Ferguson

Used properly, there is little doubt prescription drugs save the health care system millions of dollars a year. Just a generation ago an illness that could be completely debilitating or required months of hospitalization can now be treated with a drug that helps the patient live a full and productive life.

But in any drug insurance system, public or private, a key issue is still the rising cost. In some countries and in some provinces of Canada reference pricing has been used to control those costs. Its principle is simple: drugs which are judged to be interchangeable are classified in therapeutic classes, and a reimbursement ceiling is set up for the whole class, generally equivalent to the lowest or the median price in the group.

Use as Needed: The mixed impact of reference pricing on prescription drug costs examines experience of reference pricing through several jurisdictions. AIMS' research fellows Brian Ferguson and Julia Witt, take a look at Germany, the Netherlands, New Zealand and British Columbia.

They conclude that reference pricing works well only if it is used appropriately.

To read the complete paper, click here.

Share

SUPPORT US