Pharmaceutical Reference Pricing: Does It Have a Future in the U.S.?

Reference pricing is an emerging health insurance benefit design aimed at reducing health costs. In this model, an insurer establishes a maximum payment that it will contribute toward covering the price of a product or service in situations where there is wide price variation for therapeutically similar drugs, diagnostics, or procedures. Experiences to date indicate that reference pricing can influence patients and physicians to switch to less costly options within each therapeutic class, reducing overall drug prices.

Describe how reference pricing can be and has been applied to drugs in the United States and compare it to more conventional pharmaceutical benefit designs such as tiered formularies and coinsurance.

Assessment of peer-reviewed research and the experiences of employers that have used reference pricing.

To appropriately motivate price-conscious consumer choice, reference pricing must include up-to-date information. Consumers and physicians must have access to the prices charged at different distribution sites and for different drugs within each therapeutic class. Reference pricing also must include information on quality. Several modifications to the reference pricing model should be made before it can be adapted to specialty drugs, and those changes should be informed by comparative effectiveness research.