Potency is a relative measure of activity that can be used to compare two drugs and their response at given concentrations. A drug that elicits a stronger response at a lower concentration than another drug would be more potent.
A standard, or reference, drug must be used when studying potency. This is due to the relative nature of the term, and having a reference allows for comparison. This is particularly important during receptor occupancy studies, where the drug being tested can be compared to existing drugs that act as references.