Abstract

REFERENCE PRICING FOR PHARMACEUTICALS: BENEFITS, RISKS AND SYSTEMIC CHALLENGES

Nana Shashiashvili*, Besarion Simonishvili and Mariam Bakradze

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Abstract

Healthcare systems globally are under growing financial pressure to maintain access to effective and affordable medicines. Reference Pricing (RP) has emerged as a widely used policy tool in both highand middle-income countries to control pharmaceutical expenditures by setting reimbursement limits for groups of therapeutically equivalent drugs. The primary aim of this article is to evaluate the benefits and risks associated with Reference Pricing in pharmaceutical markets. This article is based on a structured literature review of peerreviewed scientific articles, policy documents, and real-world case studies from European and international contexts. The literature was sourced from databases including PubMed, Scopus, and WHO reports. The selection criteria focused on studies evaluating the economic, clinical, and systemic impacts of RP implementation. The findings indicate that RP contributes significantly to public cost containment, enhances affordability for both payers and patients, and promotes market efficiency by encouraging generic uptake. However, evidence also highlights challenges such as reduced access to new and innovative therapies, higher patient copayments for brand-name drugs, potential withdrawal of medicines from the market, and substantial administrative complexity. The analysis underscores the importance of balancing cost savings with the need to maintain equitable access and sustain pharmaceutical innovation. Countries implementing RP must consider local health priorities, market dynamics, and vulnerable populations when designing and adjusting reference pricing policies. A carefully designed RP framework—grounded in transparency, regular price reviews, and protective measures for at-risk groups—can serve as a sustainable and equitable cost-containment strategy. However, its success depends on nuanced, context-specific implementation aligned with broader health system goals.

Keywords: Affordability, Cost containment, Innovation, Medicine access, Reference pricing, Reimbursement.