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.

Pharmaceutical price differences in the EU: investigation from cardiovascular disease drugs.

Despite the market integration through the Single Market Program and European Monetary Union, and coordination efforts by the European Commission, the pharmaceutical industry in the EU has remained as separate markets in each member nation rather than integrated owing to several distinguished characteristics of the industry and member countries. As a result, there are large price differences across EU member nations. Although there are increasing harmonization efforts by the European Commission, price differences among the five major markets remain high. However, evidence from cardiovascular disease drugs shows that the average price paid for these treatments has been decreasing in recent years for five major pharmaceutical countries.