IMPLEMENTATION OF THE REFERENCE PRICING SYSTEM: ANALYSIS OF CHALLENGES AND OUTCOMES IN VARIOUS COUNTRIES

Abstract

The current trend of price increases in pharmaceutical products is threatening access to healthcare. Maintaining a balance between encouraging innovation and increasing access to healthcare remains a global challenge. External reference pricing (ERP) helps control costs for healthcare services and pharmaceutical products, at least in the short term after its implementation. The magnitude of the savings largely depends on the ERP's design. Increasing the number of reference countries and more frequent price revisions will ensure a significant reduction in drug costs. Other market aspects, such as a country's income level and population health needs, can also affect prices. Although there is a general consensus that international reference pricing offers good opportunities to reduce medicine prices and avoid overpayment, ERP across Europe is sometimes only effective in the short term, and its long-term impact does not yield positive results and gradually loses effectiveness over time.