In the common European market, drug prices significantly differ across EU member states. Table 1 gives some examples for the price distribution of patented drugs in the EU. According to this small sample, prices are highest in Germany (average rank order 1,2), followed by Italy (2.6), Finland (3.6) and the Netherlands by a large distance. The lowest drug prices are charged in Belgium (4.2) and France (4.6). The price differences persist if we take into account the country's specific retail mark-ups as well as the value-added taxes and calculate the producer prices for drugs. Price discrimination has been feasible since regulation systems divided the EU drug market into national markets. In a common EU drug market, differences in net prices could not persist without the interference of national regulation authorities since trade arbitrages by third parties would force manufacturers to seek the same price for drugs in each EU country.
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