In The Netherlands, the rate of consumption of medicine is low compared with that in other member states of the European Community. Nevertheless, expenditure on medicines is high in this country, because of a high price level. In the past decade, the cost of medicines has been growing more rapidly than the total expenditure on healthcare in The Netherlands. This prompted The Netherlands government to take action against the rise in the cost of medicines. Some policies were directed at the volume of consumption, but most focused on price. All had in common that they failed to produce lasting cost containment or did not stand up in court or to political debate. As a result, the measures proposed and implemented by the government have become increasingly harsh, departing from the Dutch tradition of harmonious policy-making carried out jointly by government and societal groups. The latest step has been the introduction (as of July 1, 1993) of a new version of a price reference system, which discourages the prescription of innovative but expensive drugs. It is too early to tell whether this policy will have a more enduring effect on cost than the previous measures.