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Pharmaceuticals & Health Services

Overview

European citizens need access to innovative, safe and affordable health products and services. The health care sector of the economy accounted for about 9% of EU GDP in 2010, covering the pharmaceutical sector (prescription and non-prescription medicines), medical devices and health services.

Pharmaceuticals

The market for medicines is highly regulated within each country. National pricing and reimbursement rules for medicines are not harmonised within the single market. This leaves less room for competition on prices and so market forces cannot realise their full effect here as they do in most other industry sectors.

Furthermore, new medicines developed by "originator" or R&D companies are protected by exclusive rights such as patents. This means that competition among originator companies is more in the area of innovation, rather than prices. Still, once a medicine's patent expires, prices drop significantly when generic versions come onto the market.

Health Services

The EU shares competences with its Member States, who are responsible for providing health services and medical care within their territories (Article 152 of the TFEU).

Member States bear the largest share of health care costs, and patients pay over 11% of the costs directly out of their pockets, equivalent to EUR 122 billion per year. Total expenditure on health care is rising faster than economic growth in the EU, leading to an increasing ratio of health spending to GDP.

The role of the Commission

The Commission works to ensure that under these conditions, market players (Member States, national health services and pharmaceutical companies) respect the Treaty rules on free competition and the free movement of goods and services within the internal market.

With this goal in mind, the Competition DG monitors business practices as well as company mergers and State aid in the health care sector. In July 2010 it integrated its antitrust activities regarding all health care sectors in a new unit called "Antitrust: Pharma and Health services", responsible for competition law enforcement for all health products and services.

The Commission cooperates with national competition authorities through the European Competition Network in this area, and the mandate of the European Competition Network Pharma subgroup has been extended to cover health services and health products other than pharmaceuticals.

Antitrust

Mergers

State aid

  
  
Related links
"Competition in Pharmaceuticals: the challenges ahead post AstraZeneca" Competition policy newsletter 2007-1
Trade between the EU and other countries in pharmaceutical products
Competitiveness in the Healthcare Industries
Healthcare industry reference documents