OBJECTIVES: External reference pricing (ERP) is a widely accepted policy used by many countries. It is used for price negotiations and setting the ceiling prices by referencing to the price in other country or basket of countries. This study is an example of a real-life ERP implementation for the high consumption medicines included in the National Essential Medicines List (NEML) of Ukraine in 2019.

METHODS: A price comparison and a budget impact model were developed in MS Excel to estimate the effect of ERP introduction in hospital procurement sector. External reference prices were calculated as the median of the three lowest prices in the Ukraine basket of reference countries (Poland, Hungary, Slovakia, Czech Republic, Latvia). A factor of 0.8 was applied to a final reference price to partially adjust for the difference in the level of income per capita between Ukraine and the basket of reference countries. The prices were set per unit of specific formulation (per tablet/ampule) at the level of international nonproprietary name (INN). In Ukraine all medicines included in NEML were subject to ERP starting from July 2019 based on the Cabinet of Ministers Decree No.426 dated 03.04.2019.

RESULTS: The ERP policy is estimated to save approximately $9.2 m USD annually, these savings originate from 24 essential medicines, which were overpriced in Ukraine in 2018. The highest proportion of savings (>60%) were originating from opioid analgesics.

CONCLUSIONS: New ERP policy for NEML will provide cost savings and amplify use of international price regulation tools in Ukraine. An internal reference pricing should be considered as an important complementary policy, that must be rolled out together with a set of bioequivalence requirements.