Very high prices of medicines have been observed in Colombia compared to other countries; hence, a new external reference pricing system (ERPS) was adopted in 2013.  ERPS includes three main phases: 1) Identification of relevant markets; 2) Analysis of market power using the Hirschman-Herfindahl index (HHI); and 3)Setting-up of an international reference price (IRP) for each relevant market, using available information of wholesaler prices of 17 countries from the Americas, Europe and Australia. OBJECTIVES: To evaluate Colombia’s EPRS. METHODS: The ERPS will be evaluated through two different tools: 1) Through its impact on public health expenditure on medicines, and number of medicines regulated, and 2) Through the  simple correlation coefficient (SCC) between a) HHI and average price reduction (APR), and b) Number  of competitors in a relevant market and APR. RESULTS: ERPS has been applied to 837 medicines. 576 medicines (69% of those analyzed) had a national average price higher than IRP and had some market power, and therefore their prices were regulated. They represent 80% of public expenditure in medicines not covered by the basic health care plan. The average price reduction for those medicines was 40%. 1) a) SCC between HHI and APR is -0,01,. and 2) SCC between number of competitors in a relevant market and APR is -0,05. CONCLUSIONS: EPRS could represent important savings to Colombian Health System. Deeper analysis on SCC is needed in order to improve ERPS.  Nonetheless, preliminary analysis suggests that other variables besides HHI, such as countries with better purchasing practices, therapeutic class, types of diseases, should be taken into account.