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Has the European union achieved a single pharmaceutical market?

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  • Aysegul Timur
  • Gabriel Picone
  • Jeffrey DeSimone

Abstract

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.
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Suggested Citation

  • Aysegul Timur & Gabriel Picone & Jeffrey DeSimone, 2011. "Has the European union achieved a single pharmaceutical market?," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 223-244, December.
  • Handle: RePEc:kap:ijhcfe:v:11:y:2011:i:4:p:223-244
    DOI: 10.1007/s10754-011-9100-z
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    Cited by:

    1. Birg, Laura, 2019. "Price Caps versus Reimbursement Limits: Pharmaceutical Regulation under Market Integration through Parallel Trade," University of Göttingen Working Papers in Economics 253, University of Goettingen, Department of Economics.
    2. Laura Birg, 2015. "Externalities of National Pharmaceutical Policy when Markets are Integrated through Parallel Trade," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 558-574, August.
    3. Di Vita Giuseppe, 2015. "Centralization versus Decentralization of Legislative Production and the Effect on Litigation: A Case Study," Review of Law & Economics, De Gruyter, vol. 11(2), pages 267-291, July.

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    More about this item

    Keywords

    Pharmaceutical market; European Union; Integration; I18; F15; L65;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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