Money and Medicine The rationale for ERP is straightforward — to ensure that the maximum price paid for a drug is not excessive relative to its price in comparable countries. (Photo: Shutterstock)

External reference pricing that ties U.S. prescription drug costs to those in other countries may save money in the short term, but these savings would be difficult to sustain. The Commonwealth Fund reviewed published literature and technical reports to determine the viability of external reference pricing, or ERP.

“The impacts of ERP are difficult to isolate from those of concurrent pricing policies, and evidence on the durability of savings is mixed,” according to its report. “Industry strategies to `game’ ERP, such as delaying the launch of drugs in particular markets, are intended to keep prices high. While initial ERP savings in the United States could be substantial, pharmaceutical companies may employ similar tactics that could erode savings.

Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.

Your access to unlimited BenefitsPRO.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

Already have an account?


NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

BenefitsPRO Broker Expo 2024Event

The premier educational and networking event for employee benefits brokers and agents.

Get More Information
 

BenefitsPRO

Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2023 ALM Global, LLC. All Rights Reserved.