Can people avoid the avoidable co-payments caused by reference pricing for outpatient medicines?

Reference pricing is a coverage (reimbursement) policy used in many health systems primarily to limit public spending on outpatient medicines but also to enhance efficiency by lowering prices. Although reference pricing can lead to user charges (co-payments), policy-makers may not be as concerned about the impact of these co-payments on affordable access to health care as they are about the impact of other out-of-pocket payments. This is perhaps because the co-payments arising from reference pricing are seen as avoidable – people do not have to pay them if they choose medicines at or below the reference price. The purpose of this brief is to draw attention to the potential for avoidable co-payments to lead to financial hardship or unmet need for some households. It also identifies the factors that increase avoidable co-payments and highlights policies to reduce them. The brief does not review the pros and cons of reference pricing; rather, the focus is on providing policy-makers with a high-level understanding of the layers of complementary policies that need to be in place to ensure that reference pricing does not inadvertently undermine affordable access to health care.