Outcomes of Reference Pricing for Angiotensin-Converting–Enzyme Inhibitors

• Published in: The New England journal of medicine Vol. 346; no. 11; pp. 822 - 829
• Main Authors: Schneeweiss, Sebastian, Walker, Alexander M, Glynn, Robert J, Maclure, Malcolm, Dormuth, Colin, Soumerai, Stephen B
• Format: Journal Article
• Language: English
• Published: Boston, MA Massachusetts Medical Society 14.03.2002
• Subjects: Aged; Aged, 80 and over; Angiotensin-Converting Enzyme Inhibitors - economics; Angiotensin-Converting Enzyme Inhibitors - therapeutic use; Antihypertensive agents; Biological and medical sciences; British Columbia - epidemiology; Cardiovascular system; Cost Sharing; Drug Prescriptions - economics; Health care policy; Health Services - trends; Health Services - utilization; Hospitalization - trends; Hospitals; Humans; Hypertension - drug therapy; Hypertension - economics; Hypertension - mortality; Long-Term Care - utilization; Medical sciences; Mortality; Patients; Pharmacology. Drug treatments; Prescription drugs; Prescription Fees - standards; Pricing policies; Rate Setting and Review; Therapeutic Equivalency; Canada; British Columbia; North America; America; British Columbia Canada; Human; Reference price; Health economy; Cost analysis; Elderly; Public health; ACE inhibitor; Cost efficiency analysis
• ISSN: 0028-4793; 1533-4406; 1533-4406
• DOI: 10.1056/NEJMsa003087

Reference pricing is a potential cost-control mechanism for prescription drugs. For medications within a specific class, health insurance typically covers the cost up to the reference price. For more expensive medications, patients pay the extra cost. This study examined the effects of reference pricing for angiotensin-converting–enzyme inhibitors, which was introduced in British Columbia, Canada, in January 1997. It found little evidence that patients stopped treatment or that health care utilization or costs increased. In the United States, $117 billion — that is, 8.9 percent of overall health care expenditures — was spent for prescription drugs in 2000. 1 Drug expenditures grew 2.5 to 3 times as fast as total health care expenditures between 1998 and 2000 1 – 3 and are about to exceed hospital expenditures for some health plans. 4 Recently, reference pricing has been suggested as a cost-control mechanism for proposed Medicare drug benefits. 5 Reference pricing is based on the assumption that medications within a specific class are interchangeable and a common level of reimbursement can be established. If a physician prescribes a medication priced . . .