Reference Pricing

What is Reference Pricing?

Reference Based Pricing as it pertains to pharmaceutical drug pricing is when governments or payers restrict what prices they will may for a drug based on benchmarks such as prices paid in other countries. Usually, countries that use reference pricing compare proposals from a pharma company to prices in a basket of other countries and use that to limit what they will pay. The benchmark can be set at the lowest price in the basket or somewhere along the distribution (eg at a certain percentile).

What is the International Pricing Index?

International Pricing Index (IPI) is part of an alternative payment model being considered by the Centers for Medicare and Medicaid Services (CMS) in the US for payment for Part B drugs. When a drug cost is lower using the IPI when the price is lower than in the current ASP based payment system. Read more about the International Pricing Index at CMS.