Complexities of Achieving a Single Pharmaceutical Market in the European Union
The pharmaceutical industry has complex characteristics not only in the European Union (EU) but also elsewhere. A defining difference from other industries is that several third parties, besides the manufacturer and consumer, are involved on both the demand and supply sides. Regulating the pharmaceutical industry is a particularly difficult challenge for policy makers, who seek low health care costs and affordable drugs, but also want accessibility to the highest quality medicines and more generally a successful industry. All these complex characteristics magnify the difficulty of achieving a single market in pharmaceuticals through the market integration process of 27 nations in the European Union. It is a fact that pharmaceutical policy is still primarily determined at the national level due to differences in health care systems, pricing and reimbursement regulations, but there is some evidence of movement toward “European Community” and the harmonization of markets across the members by the European Commission’s expanding role. The pharmaceutical industiy in the European Union has experienced a great deal of effort on the part of member countries to harmonize disparities among health care systems and regulation and reimbursement practices. The purpose of this paper is to look for some evidence toward the achievement of the single market by looking at price differences in five major pharmaceutical markets. The results show that progress toward the achievement of a single market is evident in that price differentials are decreased over time between 1994 and 2003, relative to a low priced country, Spain.







