This article provides results of the pharmaceutical products price survey carried out in November 2005 for 33 countries.

Expenditure on pharmaceutical products forms on average, for the 33 countries presented here, 1.5% of GDP. Expenditure is incurred by households as well as by governments. For households, the share of pharmaceutical products in total final expenditure is 1.3%.

Price data for in total 181 different pharmaceutical products were collected in November 2005, as part of a more general survey on health goods and services. The prices collected represent the full market price of a product. In many instances, only part of the price of a product is paid by households, while the remaining part is covered by government through social security schemes. In this survey the total price was collected, i.e. the sum of the share of the price paid by a household and the share of the price paid by the government. That means that the price level indices shown here are not a reflection of what households pay out of their "own pocket" but of total costs of pharmaceuticals to society, including the parts covered by private health insurance schemes on behalf of households.

To establish the list of products to be priced, two aspects are important. First and most important, products have to be found that are comparable across countries. For pharmaceuticals this is relatively easy, as they can be identified among other things by active substance. Secondly, for each country in the comparison the list of products should be sufficiently representative, i.e. reflecting the product consumers actually buy. For this purpose, first a list of best-selling drugs was compiled on the basis of detailed sales information from a large number of countries. To obtain the highest possible representativity the products were taken from the top of the best-sellers list.

Furthermore, a distinction was made between "original" drugs, which are those that are or have been covered by a patent, and "generic" drugs, which are copies of original drugs that are produced after the patent has expired. The list of 181 products that were to be priced consisted of about 75% original drugs and 25% generic drugs. This ratio was one of the findings from the analysis of the best-sellers lists.

In many countries prices were collected from centralized information systems from ministries of health, supervising bodies for the pharmaceutical industry or associations of pharmacists. In other countries, prices were collected by visiting pharmacies.

Chart 1 shows the price level indices (PLIs) for pharmaceuticals. The PLI for a country indicates its price level compared to the average price level of the 25 countries that made up th EU in 2005. The level of uncertainly associated with the underlying price and other data, and the methods used for compiling PPPs and PLIs imply that strict ranking of countries is not advisable (see also the methodological notes). In chart 1, the countries are therefore divided into six groups.

The top group consists of two countries that have significantly higher price levels than the others: Iceland and Switzerland, with price levels being 60% and 87% higher than the EU25 average respectively. In the second group of most expensive countries (where price levels are between 15% and 30% higher than the EU25 average) we find Denmark, Germany, Ireland, Italy and Norway.

Seven countries have price levels between 0% and 15% higher than the EU25 average: Belgium, Cyprus, Luxembourg, Malta, the Netherlands, Austria and Finland. Another five countries have price levels between 0% and 15% lower than the EU25 average: France, Portugal, Slovenia, Sweden and the United Kingdom.

Then there is a large group of countries with price levels between 68 and 80% of the EU25 average: Bulgaria, Czech Republic, Estonia, Greece, Spain, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Croatia and Turkey. It is especially remarkable how even the price distribution is among the new Member States and Acceding and Candidate countries. From the new Member States, only Cyprus, Slovenia and Malta are closer to price levels of the pre-2004 Member States. The lowest price levels are found in the Former Yugoslav Republic of Macedonia at 58% of the EU25 average.

The level of price dispersion across countries can be measured by the coefficient of variation of the PLIs, which is defined as the standard deviation as percentage of the average. A high coefficient of variation indicates high price dispersion for all pharmaceuticals (27.9%). Prices for original drugs are less dispersed (25.8%) than those of generic drugs (42.8%). This is probably due to the greater heterogeneity of generic drugs compared to originals and to the fact that generic drugs are often produced for domestic markets only.