An assessment of the impact of reference-based pricing policies on the H₂ antagonist market in British Columbia, Canada

In this study we assess the implementation and impact of reference-based pricing (RBP) in British Columbia (BC), Canada, and other OECD (Organization for Economic Cooperation and Development) jurisdictions within an evaluative framework. This was accomplished by conducting a review of prior studies and an analysis of secondary utilization and cost data. Our review of previous work found the introduction of RBP in other OECD jurisdictions was followed by a temporary reduction in pharmaceutical expenditure growth but the rate of growth soon returned to those of previous years. Early results from the BC experience show similar declines in expenditures within reference drug categories, but it remains to be seen if this will continue in the long term. Although early results suggest RBP in BC may be achieving its goals, more work is needed before it can be declared a success. A more balanced evaluation will need to address nonmonetary issues such as impact on the quality of patient care or extent of cost shifting to other areas ot the health system. The policy questions raised in this study indicate decision makers should be cautious when thinking of any wider application of reference-based pricing.