Has the European Union Achieved a Single Pharmaceutical Market?
This paper explores price differences in the European Union (EU) pharmaceutical market, the EU's fifth largest industry. With the aim of enhancing quality of life along with industry competitiveness and R&D capability, many EU directives have been adopted to achieve a single EU-wide pharmaceutical market. Using annual 1994-2003 data on prices of molecules that treat cardiovascular disease, we examine whether drug price dispersion has indeed decreased across five EU countries. Hedonic regressions show that over time, cross-country price differences between Germany and three of the four other EU sample countries, France, Italy and Spain, have declined, with relative prices in all three as well as the fourth country, UK, rising during the period. We interpret this as evidence that the EU has come closer to achieving a single pharmaceutical market in response to increasing European Commission coordination efforts.
We appreciate helpful comments from participants in a seminar at the University of South Florida and a session at the 2008 SEA meetings. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Aysegul Timur & Gabriel Picone & Jeffrey DeSimone, 2011. "Has the European union achieved a single pharmaceutical market?," International Journal of Health Care Finance and Economics, Springer, vol. 11(4), pages 223-244, December. citation courtesy of