Pharmaceutical pricing and purchasing policies are used to determine or affect the
prices that are paid for drugs. Examples are price controls, maximum prices, price
negotiations, reference pricing, index pricing and volume-based pricing policies. This
review found evidence for reference pricing and index pricing. In reference drug pricing,
which is a reimbursment tool, a reference drug is chosen amongst drugs that are
considered as therapeutically similar, and the price of the reference drug is reimbursed.
For drugs that are more expensive than the reference drug, the patient has to pay the
expenses above the reference price. An index price is the maximum refundable price to
pharmacies for drugs within an index group. An index group consists of therapeutically
interchangeable drugs. The price is refunded independent of which drug is dispensed.
Key messages
 The use of reference pricing policies made by governments, non-government
organisations or private insurers compared to not setting such pricing policies:
− Can reduce third party drug expenditures by inducing a shift in drug use towards
less expensive drugs
− produces no adverse effects on health
 Reference pricing may not lead to any difference in total use of drugs and drug expenditures
 It is not known whether reference pricing affects drug prices, health care utilisation
and any of the health outcomes measured.
 Index pricing may slightly reduce the price of the generic drug compared with no
intervention and may not lead to any difference on the price of the brand drug.
 Some other factors must be considered when assessing whether the intervention
effects are likely to be transferable to other settings because all of the studies included
were developed in high-income countries.