External reference pricing (ERP), a frequently implemented pricing policy, seeks to rationalise prices and contain costs by using foreign prices as reference for the determination of domestic prices and facilitation of negotiation. Its use across countries varies significantly in terms of objectives, methods, administration and implementation.

The aim of this project is to study the evolution of ERP systems in different geographical jurisdictions and analyse the way ERP interlinks with developments in other regulatory approaches. In addition, the team tried to gain a clearer understanding of the impact of ERP systems on health system goals and to highlight trends and consequences related to ERP.

Outputs

The Implementation of External Reference Pricing within and across Country Borders
November 2017

Authors: Panos Kanavos, Anna-Maria Fontrier, Jennifer Gill & Dionysis Kyriopoulos

This paper aimed to highlight differences in the way that 29 countries implement ERP using a systematic literature review-based process combined with primary evidence from key stakeholders. Of the 29 countries analysed, 17 were European Member States, with the remainder representative of Latin America, South East Asia, the Middle East and North Africa.

Secondary data was collected from literature published between 2000 and 2015 on a set of 17 criteria (endpoints) based on the ERP system design. Primary evidence was collected via questionnaires distributed among key stakeholders.

Results of the systematic literature review and of the primary evidence collection were contrasted with analysis of the goals and observed impacts of the different ERP systems to identify optimal design features of ERP systems.

The Impact of External Reference Pricing within and across Countries
November 2017

Authors: Panos Kanavos, Anna-Maria Fontrier, Jennifer Gill, Olina Efthymiadou & Nicola Boekstein

The objective of this paper is to critically appraise the impact of ERP systems as they are applied in different settings on selected health system outcomes internationally.

A systematic literature review using a keyword strategy was conducted both in the peer review and grey literature from 2000 to 2015. The endpoints studied were the impact of ERP: first, at a national level, notably on (a) pharmaceutical cost-containment (decreased pharmaceutical expenditure); (b) price levels for prescription medicines; (c) pharmaceutical utilisation; (d) availability; (e) affordability; (f) equity; (g) efficiency; (h) industrial policy; and, second, at an international level, specifically on (a) price stability; (b) price convergence; and on (c) launch sequencing and delays.

Read also

Does external reference pricing deliver what it promises? Evidence on its impact at national level
The European Journal of Health Economics, 3 October 2019

Variations in external reference pricing implementation: does it matter for public policy?
The European Journal of Health Economics, 23 August 2019

International impact of external reference pricing: should national policymakers care?
The European Journal of Health Economics, 19 July 2019