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KMID : 1022920160050010009
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Journal of Korean Academy of Social & Managed Care Pharmacy
2016 Volume.5 No. 1 p.9 ~ p.15
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International Trend of External Reference Pricing
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Kang Dae-Won
Bae Eun-Mi
Shin Gyeong-Seon
Lim Jae-Ok
Kim Seong-Ok
Lim Jae-Young
Choi Sang-Eun
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Abstract
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BACKGROUND External reference pricing is widely used throughout the world due to its simplicity in pharmaceutical price setting and its cost-lowering effect. Korean government has been using external reference pricing process to set maximum prices for new drugs. Its importance was increased due to recently introduced policy where certain drugs can be exempted from economic evaluation and foreign prices are the only criteria for setting price. This study was conducted to review global trend of external reference pricing and gain insights about this process.
METHODS We reviewed literatures about external reference pricing and different methodologies used in different countries. Theoretical and practical aspects of external reference pricing were reviewed and discussed.
RESULTS External reference pricing was being used in 26 countries out of 28 European Union member countries. Many countries from other parts of the world, such as Canada, Mexico, Japan, Taiwan and Norway are using this process and the number of countries implementing this process is increasing. Although the main idea was the same, details varied between countries depending on their economic background. It is mostly used to regulate pharmaceutical prices and several studies suggested that it leads to lower prices. However, it is worried to cause a global price convergence and pharmaceutical companies can strategically use this to maximize profit.
CONCLUSIONS Policy decision makers should be aware of the various external reference pricing carefully and flexibly according to their policy directions.
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KEYWORD
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external reference pricing, health policy, pharmaceutical pricing
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