Chapter 6: Pharmacies
Today there is no internal market for prescription drugs in the EU. Due to rigid public regulations and the harmful segmentation of the EU market by pharmaceuti-cal industries drugs are more expensive in Denmark than in many other European countries. More competition can lead to lower prices, which will benefit both con-sumers and society.
The Danish Competition Authority (DCA) has conducted a study of the retail mar-ket for drugs in Denmark. DCA has adapted an economic model to asses the effects of different approaches to the challenges on this market. On the basis of the study and the results of the economic model, DCA has made a range of suggestions on how to improve competition on the Danish retail market for drugs without jeopard-izing consumer safety or increasing consumption.
Consumers should be entitled to reimbursements from the National Health Insur-ance, not only when they buy drugs in Danish pharmacies, but also when the pur-chase is made in pharmacies in the rest of EU/EEC. However, the drugs must be approved to be sold in Denmark and the pharmacies must be linked to the elec-tronic reporting systems of The Danish Medicines Agency.
The Danish pharmacies should be allowed to compete on retail prices. The current system of fixed prices on prescription drugs prevents this kind of competition. Therefore, the fixed prices should to be replaced by maximum prices where phar-macies are free to set their prices below this “price ceiling”. This way drugs can only become cheaper for the consumers. It should also be made easier for Danish pharmacies to import drugs and thereby profit from lower prices in other countries.
With few exceptions everyone should be allowed to set up and own a pharmacy provided that a pharmacist is responsible for the daily operations, compliance with rules and standards etc. In addition, it should be possible to sell such a pharmacy to the market price and thus allow remuneration for goodwill.
These suggestions will lead to more competition between pharmacies, increased investments and – not least a more businesslike attitude among pharmacies. This can contribute to better service and/or lower prices for the consumers.
A comprehensive description (in Danish) of the suggestions and the economic model are given at the Authority’s home page: www.ks.dk/
Contact persons: Head of section Søren Kåre Nielsen (skn@ks.dk) and head of section Peder Kongsted Christiansen (pkongsted@econ.au.dk).