Should pharmaceutical costs be curbed?

Abstract

Pharmaceuticals account for almost a fifth of total health spending in OECD-countries. Both pharmaceutical innovations and the aging of the population explain the increasing importance of pharmaceuticals in health care. Due to the importance of patent protection and insurance coverage, pharmaceutical markets are subjected to economic regulation – both on the supply-side and the demand-side. In this paper, we briefly review the Nordic pharmaceutical market, before explaining the main regulatory policy measures taken by governments in these countries. Empirical research has been undertaken to investigate regulation and competition, and we provide a review of some of the findings.