The 1996 pricing and reimbursement policy in the Netherlands

In The Netherlands, the government operates a reference price system in which medicines are categorised into groups of interchangeable drugs. The reimbursement within groups is limited. In addition, since drug prices in The Netherlands are currently among the highest in Western Europe, a law was implemented in March 1996 to lower the prices of drugs in The Netherlands to the mean of pharmacy buying prices in 4 surrounding countries (UK, France, Belgium and Germany). Maximum prices for oral formulations will be in force from 1 June 1996, and maximum prices for other formulations will be operational soon thereafter. Reducing the price level will lead to a substantial decrease in discounts for pharmacists. Lower discounts will also mean weaker 'golden chains' between wholesalers, the industry, and pharmacists, and will therefore create business opportunities for companies wishing to compete on the basis of price. Liberalising the distribution of pharmaceuticals and creating a cost-conscious demand side will stimulate price competition in the pharmaceutical market and make it easier for new participants to enter the Dutch market. Price competition will lead to lower prices and, consequently, to lower costs. Further exemptions from the reimbursement list will be recognised. Considerable efforts are also being made to rationalise the prescribing behaviour of physicians and the dispensing behaviour of pharmacists. Through this programme, which has many components, The Netherlands hopes to restrain and effectively control its expenditures on pharmaceuticals.