Has the European Union Achieved a Single Pharmaceutical Market? / Aysegul Timur, Gabriel Picone, Jeffrey S. DeSimone.

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Timur, Aysegul

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w16261.Publication details: Cambridge, Mass. National Bureau of Economic Research 2010.Description: 1 online resource: illustrations (black and white)Subject(s):

I11 - Analysis of Health Care Markets

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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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Previous	nber w16259 The Dynamic Effects of Currency Union on Trade /	nber w1626 Stock Returns and the Term Structure /	nber w16260 Exchange Market Pressure and Absorption by International Reserves: Emerging Markets and Fear of Reserve Loss During the 2008-09 Crisis /	nber w16261 Has the European Union Achieved a Single Pharmaceutical Market? /	nber w16262 What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas /	nber w16263 Predictive Regressions: A Present-value Approach /	nber w16264 Globalization, the Business Cycle, and Macroeconomic Monitoring /	Next

August 2010.

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.