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Deregulating the pharmacy market : The case of Iceland and Norway

Anell, Anders LU (2005) In Health Policy 75(1). p.9-17
Abstract

The pharmacy market in many European countries is characterised by individually owned pharmacies that operate under tight government control regarding barriers to entry, scope of activities and profit margins. Many countries are, however, in the process of introducing pro-competitive policies, including possibilities to own several pharmacies and competition based on price. In Iceland and Norway, restrictions to ownership and competition were relaxed in 1996 and 2001, respectively. In both countries, the new policies quickly led to horizontal integration and concentration of the market, and in Norway the merging pharmacy groups integrated vertically with wholesalers. By 2004, two pharmacy groups in Iceland and three pharmacy groups in... (More)

The pharmacy market in many European countries is characterised by individually owned pharmacies that operate under tight government control regarding barriers to entry, scope of activities and profit margins. Many countries are, however, in the process of introducing pro-competitive policies, including possibilities to own several pharmacies and competition based on price. In Iceland and Norway, restrictions to ownership and competition were relaxed in 1996 and 2001, respectively. In both countries, the new policies quickly led to horizontal integration and concentration of the market, and in Norway the merging pharmacy groups integrated vertically with wholesalers. By 2004, two pharmacy groups in Iceland and three pharmacy groups in Norway controlled 85 and 97% of the markets, respectively. In combination with remaining barriers to entry, this market concentration may call for additional pro-competitive interventions to prevent unfavourable developments. Such policies will simultaneously make it more difficult to uphold traditional social objectives related to pharmacy services. Experiences in both Iceland and Norway highlight the complexity of managing reforms that fundamentally influence competitive behaviour.

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Please use this url to cite or link to this publication:
author
publishing date
type
Contribution to journal
publication status
published
keywords
Competition, Deregulation, Horizontal integration, Iceland, Norway, Pharmacy market, Vertical integration
in
Health Policy
volume
75
issue
1
pages
9 pages
publisher
Elsevier
external identifiers
  • scopus:27744457330
  • pmid:16298225
ISSN
0168-8510
DOI
10.1016/j.healthpol.2005.01.020
language
English
LU publication?
no
id
750b5bc4-4d99-44cb-ab3a-4aa0ec616443
date added to LUP
2020-09-02 13:21:04
date last changed
2024-04-03 14:01:11
@article{750b5bc4-4d99-44cb-ab3a-4aa0ec616443,
  abstract     = {{<p>The pharmacy market in many European countries is characterised by individually owned pharmacies that operate under tight government control regarding barriers to entry, scope of activities and profit margins. Many countries are, however, in the process of introducing pro-competitive policies, including possibilities to own several pharmacies and competition based on price. In Iceland and Norway, restrictions to ownership and competition were relaxed in 1996 and 2001, respectively. In both countries, the new policies quickly led to horizontal integration and concentration of the market, and in Norway the merging pharmacy groups integrated vertically with wholesalers. By 2004, two pharmacy groups in Iceland and three pharmacy groups in Norway controlled 85 and 97% of the markets, respectively. In combination with remaining barriers to entry, this market concentration may call for additional pro-competitive interventions to prevent unfavourable developments. Such policies will simultaneously make it more difficult to uphold traditional social objectives related to pharmacy services. Experiences in both Iceland and Norway highlight the complexity of managing reforms that fundamentally influence competitive behaviour.</p>}},
  author       = {{Anell, Anders}},
  issn         = {{0168-8510}},
  keywords     = {{Competition; Deregulation; Horizontal integration; Iceland; Norway; Pharmacy market; Vertical integration}},
  language     = {{eng}},
  month        = {{01}},
  number       = {{1}},
  pages        = {{9--17}},
  publisher    = {{Elsevier}},
  series       = {{Health Policy}},
  title        = {{Deregulating the pharmacy market : The case of Iceland and Norway}},
  url          = {{http://dx.doi.org/10.1016/j.healthpol.2005.01.020}},
  doi          = {{10.1016/j.healthpol.2005.01.020}},
  volume       = {{75}},
  year         = {{2005}},
}