What is Germany's experience on reference based drug pricing and the etiology of adverse health outcomes or substitution?

Germany is frequently cited as an example of reference based pricing (RBP) in ongoing controversial discussions on the effect of REP. There are thorough analyses of phase I and II REP on Germany's drug market. However, any conclusions on the overall economic and public health impact of REP, solely on the basis of aggregated data, must be suspect to substantial bias, since too many factors in a rapidly changing health care system remained uncontrolled. Parallel to the introduction of phase II REP in 1992/1993, the second health care reform became active. The two major confounding factors were the introduction of fixed drug budgets and the many changes due to the unification of Germany that took place in the beginning of the 1990s. Published and unpublished aggregated data do not allow any conclusions on the etiology of adverse health events due to this change in drug reimbursement policy. Conclusions drawn from the German experience will be based on assumptions or speculations that are hard to prove. A health care system that identifies enough evidence and need to introduce REP as a measure of cost control should make every effort to evaluate the effects in order to increase program compliance or, if indicated, make adaptations to the REP policy. The introduction of REP in British Columbia in 1995-1997 and its computerized administrative health databases covering a large proportion of the population should give rise to a thorough analysis of this policy. (C) 1998 Elsevier Science Ireland Ltd. All rights reserved.