Checking in on BC's reference-based pricing experiment
British Columbia introduced reference-based pricing in 1997 as a cost-saving measure. The government's decision that it would only pay for the least expensive drug in a medication class led Sebastian Schneeweiss and colleagues to study the use of angiotensin-converting enzyme (ACE) inhibitors for the 2 years before and after reference-based pricing was introduced. The authors found a 29% drop in the use of higher-priced medications immediately following the change and estimated the government's savings at $6.7 million in the first year alone. However, the authors also note that while the use of antihypertensives was unchanged, 11% fewer people were using an ACE inhibitor after the policy change. They also note that independent of reference pricing, low-income patients were more likely than high-income patients to stop all antihypertensive therapy. This did not change after the start of reference pricing. In a related commentary, Aslam Anis cautions that the "substitution effect" will cause offsetting changes in the use of other health care interventions not being targeted, or worse, could lead to a decline in overall use without concomitant increases in other interventions.
p. 737 Impact of reference-based pricing for angiotensin-converting enzyme inhibitors on drug utilization -- S. Schneeweiss et al
p. 763 Why is calling an ACE an ACE so controversial? Evaluating reference-based pricing in British Columbia -- A. Anis