von der Schulenburg et al. Health Economics Review 2011, 1:18 RESEARCH Open Access The effects of drug market regulation on pharmaceutical prices in Europe: overview and evidence from the market of ACE inhibitors Fritz von der Schulenburg1,2, Sotiris Vandoros1 and Panos Kanavos1* Abstract This study provides an overview of policy measures targeting pharmaceutical expenditure in Europe and analyses their impact on originator pharmaceutical prices. Panel data methods are used to examine the market of ACE Inhibitors in six European countries (Denmark, France, Germany, Netherlands, Sweden, United Kingdom) over period 1991-2006. We find that although some measures are effective in reducing originator prices, others appear. | von der Schulenburg et al. Health Economics Review 2011 1 18 http content 1 1 18 o Health Economics Review a SpringerOpen Journal RESEARCH Open Access The effects of drug market regulation on pharmaceutical prices in Europe overview and evidence from the market of ACE inhibitors Fritz von der Schulenburg1 2 Sotiris Vandoros 1 and Panos Kanavos1 Abstract This study provides an overview of policy measures targeting pharmaceutical expenditure in Europe and analyses their impact on originator pharmaceutical prices. Panel data methods are used to examine the market of ACE Inhibitors in six European countries Denmark France Germany Netherlands Sweden United Kingdom over period 1991-2006. We find that although some measures are effective in reducing originator prices others appear to have an insignificant effect. Results suggest that supply side measures such as mandatory generic substitution regressive pharmacy mark-ups and claw-backs are effective in reducing pharmaceuticals prices. Results are not as strong for demand side measures. Profit controls and the use of cost-effectiveness analysis appear to have a negative effect on prices while results on reference pricing are inconclusive. Findings also indicate that although originator prices are not immediately affected by generic entry they may be influenced by changes in generic prices post patent expiry. Keywords Regulation Pharmaceuticals Panel Data Europe 1. Background Introduction The special nature of pharmaceutical markets due to patent protection third-party payers and low price elasticity has led to the introduction of regulation in European markets. A variety of policy measures have been implemented in the European Union in order to control pharmaceutical prices. These measures differ significantly across countries but have a common goal of efficient dispensing and keeping prices at reasonable levels while elements of industrial policy can be found in some countries. Regulatory
