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A review of the pharmaceutical market in Portugal
This article examines the main developments of the pharmaceutical market in Portugal over the last decade. There has been a growth in the quantities traded and a reduction in retail prices, resulting from an intense legislative intervention. This price reduction has stalled expenditure on outpatient medicines, making it even possible some reduction in the last years. Such an evolution reflects a cutback in the economic rents of market agents, benefiting the National Health Service. The enhanced competition in the market segments open to generic drugs has contributed importantly to this outcome. The estimation of a demand function for pharmaceutical drugs indicates a relatively reduced price-sensitivity of quantities consumed, at the upper bound of the estimates in several studies for other countries. Furthermore, it is inferred that the resistance to the prescription of generics is waning as, holding constant other factors, prescribers already induce consumers to preferably acquire generics. In the future, a further increase in the penetration of generics is likely to take place by the extension of the range of active ingredients covered by them.