The reference price system is introduced in Finland in circumstances where the generic substitution has already had significant price, market structure, and competition effects. In principle, the difference between the reference price system and the generic substitution is the incentive for consumers to respond to prices. The generic substitution has already produced some of the effects the reference price system could have produced, and therefore the expected effects should be assessed with relative caution. The study assessed the effects the reform has had on the prices, market structure, and total expenditure. Also a thorough literature review was carried out on the effects of reference price systems in other countries.