ABSTRACT
This chapter discusses Reference-Based Pricing (RBP), which are the most frequently applied methods of pricing and reimbursement control. It reviews technical aspects related to reference based pricing, such as Anatomical Therapeutic Classification (ATC) classes and Daily Defined Doses (DDD), its challenges and impact on incentives for innovation in drug development. The chapter describes some safety problems related to the introduction of RBP and reimbursement systems. A number of government payer systems, starting in The Netherlands and Germany in the early 1990s, have introduced a highly formal RBP system of evaluating new drugs versus existing options. The WHO ATC system is fundamental to many RBP systems. The key for differentiation of a new drug is the creation of a new ATC Level 4 class. The calculation of the price or reimbursement limit can be very complex, but usually results in a limit that is at the lower end of the price range of drugs in the reference class.
