It is significantly important but difficult to establish healthcare payment standard system in case our country has cancelled government and government guidance prices. In 1989, Germany was the first country to intro-duce the medicine reference price system in Statutory Health Insurance. It does not only aim to regulate the medicine prices, but also defines a reimbursement level for a cluster of products considered to be therapeutically equivalent, and has a good influence on lowering the price of medicine. This paper systematically reviews the medicine reference price system in Germany, including four aspects:the reference price system overview, the reference price groups’ de-termination procedure, the reference prices calculation and the co-payment mechanisms. Based on the Germany refer-ence price system, we can establish healthcare payment standard in over-the-counter or chronic market first, then sci-entifically divide the reference price groups, formulate and adjust payment standard based on the market price, and perfect the co-payment mechanism to avoid moral hazard.