Development and performance of the external reference pricing system in Slovenia from 2007 to 2012

Abstract Background From 2007 to 2012 five changes of the Rules defining Slovenian external reference pricing (ERP) were introduced to reduce medicine expenditure. Objective To assess the cost-saving effect of five ERP updates and the cost-saving effect of specific price reduction agreements, and to identify potential inconsistencies in determining the maximum allowed prices (MAPs) based on ERP. Methods To obtain MAPs from 2012 and four sets of MAPs that would be valid if ERP upgrades did not occur, Rules from 2012 and four previous Rules were applied to the same data on prices in reference countries. To assess the ERP updates cost-saving effect, one-year validity of each Rules was assumed. The assumed annual medicine expenditure was calculated considering MAPs according to each Rules and medicine consumption. To detect inconsistencies in determining MAPs, the official MAPs were compared to the MAPs calculated within the study. Results The total cost-saving effect resulting from the difference in assumed medicine expenditure based on the 2012 Rules and 2007 Rules was 5.45%. The greatest cost-saving effect of 3.59% was observed for the 2012 Rules compared to the 2010 Rules, while a 2.28% cost increase was detected when comparing the 2009 Rules to those from 2008. Specific price reduction agreements contributed to 2.32%, 4.51% and 6.74% expenditure reductions, respectively. Inconsistences in the formulation of MAPs were found as 4.75% lower monthly expenditure based on the calculated MAPs. Conclusions ERP system upgrades affected medicine expenditure; however, specific price reduction agreements were shown as a more effective cost-containment measure.