Pharmacies

Dispensing medical drugs is a profession that combines the particularities of a professional service and retail industry. The focus here is on retail pharmacy, leaving aside the special character of hospital pharmacies.

First, pharmacists are responsible for a range of professional services including offering advice and assistance to those receiving their medication. Pharmacists are responsible for making sure that people receive their medication safely and professionally. Second, a network of pharmacies and other retail outlets is a major vehicle for public policies designed to make pharmaceuticals available and affordable to the public throughout a jurisdiction. However, different jurisdictions do this differently. There is no single ‘template’ policy model that fits all jurisdictions.

In the middle and low-income countries, there is tension between policies aimed at safe and proper dispensing and those aimed at availability and affordability.

This article focuses on the policy challenges that arise in setting up the rules and regulations governing this professional trade, the tradeoffs that need to be evaluated when designing markets in health care and the role of health economics in promoting public policy.

The article is organized into four sections. After the introductory section, the key policy instruments that are available to policy-makers and societies are highlighted and described (Section Challenges and Policy Options). The focus is on the differences between the quality, entry, and price regulations that characterize policies based on a competitive market and on those that rely much more on a regulated command and control framework.

In Section Benefits and Risks from Regulating Pharmacies an assessment of the pros and cons of quality, entry, and price regulations is dealt with.

Challenges And Policy Options

Societies face a twofold challenge when organizing professional retail pharmacy markets.

First, the structure of the market should address the following to ensure that

1. the consumers get assistance and advice that is free from the personal interests of prescribers;
2. the consumers receive assistance and advice that is free from the personal interests of dispensers, particularly when a prescription is not filled; and
3. that the pharmacists and their assistants are professionals qualified in medicine and pharmacy.

Second, pharmacies are retail outlets that serve the cause of better access: through which professionals make affordable pharmaceuticals available to the local public. Key drivers of availability and affordability are the following:

1. Reimbursement arrangements: These should ensure that there are sufficient retail outlets or other distribution channels for pharmaceuticals across the country to dispense the medicines that are reimbursed by health care organizations.
2. Competition: Competitive pressure upstream helps retail pharmacists to get the best deal from wholesalers and manufacturers, with pharmacies ideally offering good deals to their customers and passing on to them most of the gain from the upstream competitive interaction.
3. Behavioral regulations: These ensure that providers, whether independent pharmacies or companies running pharmacy chains, do not abuse the public if they reach a dominant position in distribution and dispensing in their catchment geographical areas.

Given the objectives of safety/proper dispensing and availability/affordability, legislatures and governments regulate key elements of the industry. There are three well established traditions in high-income countries regarding the two main objectives. In most countries of continental Europe, the trade is generally reserved to licensed community pharmacies owned by independent pharmacists or by national, regional, or local governments. There are therefore rules limiting ownership of pharmacies to those who are licensed or employees of or contractors to the State. There are also rules that limit the number of pharmacies that each licensed pharmacist can own (usually a one-pharmacy-per-pharmacist rule). Moreover, in many countries, community pharmacies are subject to entry restrictions based on various tests of need.

In most European countries, chains are not permitted; vertical integration of retail pharmacies with medicine wholesalers or manufacturers is not permitted. Community pharmacies are obliged to sell the full line of authorized medicines in each country and deliver some health care services for other mandated health care providers.

By contrast, in the US and Canada there are no entry restrictions: there is free entry. Pharmacy chains owned by limited or public companies are common, although such companies contract licensed pharmacists to manage the service under stringent professional codes. There are also many independent pharmacies owned by professionals that compete with the company-owned chains. Both independent pharmacies and chains are obliged to sell the full line of authorized medicines and drugs in each country. However, they contract in a voluntary basis with mandated health care programs (Medicare and Medicaid in the US), and with health maintenance organizations, the extra services related to the reimbursement of drugs within the health plans.

The UK, Ireland, and the Netherlands adopt an intermediate regulatory stance. There is no formal regulation limiting the entry of pharmacies. Entry is effectively restricted by contracts with the mandatory health care organizations. Potential entrants do not effectively enter without securing a contract and such organizations award them only after considering carefully the incremental benefits and costs of new pharmacy openings.

In these three countries, pharmacies (‘chemists’ in the UK) are independent retail outlets that contract to fill prescriptions covered by the mandated health care organizations. They also dispense pharmacological products prescribed by physicians not paid by the mandated health care organizations, and they also sell other medical products not requiring a prescription, as well as a wide range of common hygiene and health-related products. Some have broadened their range to embrace photography and other chemical-based product lines, and even products and services having little or nothing to do with health or health care. These ‘chemists’ compete with other retail outlets that sell over-the-counter (OTC) drugs without doctor prescription, other medicinal products and any other product and service.

In the middle- and low-income countries, all types of regulation can be found depending on the historical circumstances of each. However, middle and low-income countries often have unregulated retailers that effectively sell many types of pharmaceutical drugs usually with neither a pharmacist- manager on the premises nor qualified assistant. Such outlets typically neither satisfy the obligation to sell a full line of drugs, nor ensuring that they dispense prescription-only drugs only when a qualified prescriber prescribes them.

There are six policy instruments used by most countries in the world that distinguish these three different pharmacy models: (1) restrictions to practice: professional licensing; (2) ownership restrictions; (3) separation of prescribing and dispensing; (4) pharmacist management, supervision, and assistance; (5) zoning; and (6) price regulation.

Restrictions To Practice: Professional Licensing

Professional licensing in retail pharmacy, that is, restricting the practice of pharmacy to qualified professionals is the law in almost all countries across the globe.

Countries differ in licensing retail pharmacy according to how ‘the practice of pharmacy’ is defined: (1) whether, or not, the ownership of a pharmacy is part of the practice of pharmacy, and as such, it is reserved only to pharmacists; (2) whether the management of the pharmacy is part of the practice of pharmacy, and as such, it is also reserved only to pharmacists; and (3), whether dispensing of medicines is part of the practice of pharmacy and as such is also reserved only to pharmacists.

In high-income countries, pharmaceutical retailing is reserved to pharmacists. It includes professional owners of independent pharmacies and professionals, who should be hired to manage, organize, even supervise or assist part or all retailing of medicines at each one of the outlets of any company operating a chain of pharmacies. This restriction is commonly observed and generally enforced.

By contrast, in middle and low-income countries there are gray or second-tier outlets that sell medicines. Such outlets have no pharmacist owning the outlet, or to manage, organize, supervise, or assist the dispensing of medicines.

Availability and affordability problems in middle- and low- income countries are so severe that the authorities do not enforce professional licensing regulations on the grounds that such enforcement may further reduce the reach of their weak distribution networks. Having a licensed pharmacist performing these duties is perceived as an excessive cost of servicing in the outlet, partly fixed and partly marginal, that would eventually increase the price of the dispensing service. This is particularly true when medicines are sold without any pharmacist involvement in the preparation of packages with convenient labels and patient information leaflets containing clear and comprehensible directions for use. Mexico is among the few countries in the world in which the law clearly allows pharmaceutical products to be sold in retail outlets without any pharmacist managing, supervising, or assisting the dispensing. Pharmacist involvement is only mandated in the case of dispensing psychotropic drugs.

Ownership Restrictions

Many countries reserve the ownership of pharmacy retail outlets to professionals or the state. Some countries allow the competition of nonpharmacist-owned outlets (usually company chains) with independent pharmacies (owned by pharmacists). Others forbid professional pharmacists to own the pharmacies in which they work.

The question of pharmacy ownership is controversial. Those in favor of restricting ownership to pharmacists claim that the key to make the pharmacy trade professional is the mandatory membership of the pharmacist-owner to a professional organization. They claim that only by having the pharmacist-owner subject to the rules and supervision of the professional body will pharmacists advise and assist patients in buying their medication according to the standards of safety and proper dispensing.

Without such ownership restriction and professional supervision, the claim goes, the personal interests of pharmacist would supersede the interests of the patient. At the same time, they claim that the standards of safety and proper dispensing should be decided by these professional bodies to which pharmacist-owners are affiliated and not by other government or industry bodies, which may in turn again give priority to their interests before the patient interests.

The main argument against the restriction of ownership of pharmacies to licensed pharmacists is that pharmacists-owners can also give priority to their interests before those of their patients. Professional bodies, which are mainly controlled by pharmacy owners, do not always set up the appropriate standards of conduct, nor do they always enforce sanctions against those affiliated owners who misbehave. It may even be easier to supervise and enforce standards of conduct over company chains that are liable for the conduct of their managers and employees and over pharmacists employed to manage outlets in pharmacy chains.

There are different perceptions of legal enforcement: for example, about the effectiveness in different jurisdictions of the different mechanisms for setting standards of behavior, organizing external supervision, and enforcing sanctions when there is misbehavior. Ultimately, enforcement depends on how clear the set of rules is and how tough the judiciary is in enforcement and penalty.

Ownership restrictions are widespread in Europe. As many as 18 out of 27 EU Member States reserve ownership of any pharmacy to a licensed pharmacist. It is only the Netherlands (since 2000) and Ireland among the old EU Member States that have free pharmacy ownership, together with most of the new EU Member States: Poland, the Czech Republic, Estonia, Lithuania, Malta, Slovakia (since 2005), and Slovenia (recently deregulated). Ten of the 27 EU Member States have state-owned community pharmacies: Bulgaria, Cyprus, Czech Republic, Hungary, Italy, Luxemburg, Malta, Poland, and Slovenia. Sweden is the only case in which the entire pharmacy trade was reserved to a state-owned enterprise from 1971 to 2009. In 2009, the Swedish government started to sell part of the state-owned pharmacy chain in clusters and new private pharmacies have been established, some in joint ventures with multinational chains. The new chains compete with the remaining part of the state-owned pharmacy chain.

Among middle and low-income countries, Tanzania, Kyrgyzstan, Uganda, and Guatemala have state-owned pharmacies and other special arrangements such as contracted independent pharmacies and franchised Non-Governmental Organization pharmacies. The Dominican Republic project ‘People’s Pharmacies’ is a successful program sponsored by the government to make available and affordable essential generic medicines for low-income families in all state-owned and managed health care premises, including state-owned pharmacies and hospital pharmacies. Sixteen out of the 27 EU Member States allow pharmacists to own only one independent pharmacy. In the remaining 11, pharmacy chains are allowed and widespread: Austria, Ireland, Netherlands, and Sweden among the old EU Member States, and the Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania, and Slovakia among the more recent ones.

Chains are widespread and compete with independent pharmacies in the US, Canada, Mexico, and the Philippines. South Africa (since 2004) and Kyrgyzstan have corporate managed care preferred pharmacy networks.

Ownership restrictions to just one independent pharmacy go together with the prohibition on vertical integration with wholesalers or manufacturers. By contrast, when ownership is free and chains allowed, it is very common for some chains to integrate vertically with wholesalers or manufacturers. In such cases, economies of scale and scope may be attained and passed on to consumers. Those economies may not be passed on to consumers when chains reach dominant positions in the distribution of the medicines of some affiliated manufacturers, or in the distribution of all medicines in some catchment areas.

In the EU, the courts have upheld ownership restrictions when they have been questioned as being contrary to the freedom of establishment in the internal market. Pharmacy is excluded from the rules of the internal market and the service directive only when member States reserve the pharmacy trade to a regulated health profession or a state-owned entity as a means of protecting health in the context of a mandated or public organized health care system.

Prescribing And Dispensing Separation

Separating prescription of medicines to doctors (or prescribing nurses) and dispensing to pharmacists is a way of reducing conflicts of interest. Most countries forbid doctors from dispensing drugs and classify medicines in one of the following categories, depending on the level of advice and assistance that pharmacist should provide:

1. Prescription-only medicines: Medicines only with the prescription of one authorized to prescribe.
2. Pharmacy-only medicines: Medicines that can be obtained only from a pharmacy outlet, but which do not require a prescription from an authorized practitioner.
3. Over-the-counter (OTC) medicines: Medicines that can be made readily available to the public in other retail outlets – as well as in pharmacies.

In the legislation, prescribing by a doctor or a nurse-prescriber and dispensing by a pharmacist is the general rule in Europe, the US, and Canada. However, Austria, Belgium, Czech Republic, Cyprus, Finland, France, Greece, Hungary, Malta, Slovenia, and the UK allow exceptionally doctors in rural areas to perform both the prescribing and dispensing of pharmaceuticals in order to make sure the availability of service in remote areas.

By contrast, many countries, particularly in Asia and Latin America, have dispensing doctors or integrated health centers and pharmacies. The problem with this integration is that dispensing doctors are influenced in their prescribing decisions by their personal financial incentives at dispensing. The Philippines have encouraged the separation of prescribing and dispensing since 1995, and fees have been designed to financially promote such separation since 2002. By contrast, South Korea has clearly mandated the separation of prescribing and dispensing. However, enforcement of prescription-only and pharmacy-only rules varies strongly across countries. In many higher-income countries, and in most middle-and low-income countries, dispensing prescriptiononly medicines without any doctor prescription is widespread.

In these cases, the advice of pharmacists is the key to making sure that the safety and proper dispensing of medicines to patients is paramount. In such settings, financial incentives also apply: there is a lot of evidence that pharmacists’ financial interests have an impact on the kind of advice and sales services they provide.

Pharmacist Management, Supervison, And Assistance

Most countries require that a pharmacist should manage the service and be responsible for ensuring that the pharmacy (whether independent or within a chain) complies with all professional rules, regulations, and standards. They also require that at least one pharmacist is always present and in charge of supervising or assisting in the dispensing of pharmaceuticals.

This is easier said than done in independent pharmacies, particularly in ‘mom-and-pop’ pharmacies in middle and low-income countries. It is not clear cut whether enforcement of the rules of the profession is easier in company-owned pharmacy chains as competitors and pharmacists unions usually track compliance, or when all pharmacies are independently owned and supervised by a professional body governed by pharmacy owners or independent experts.

As mentioned before in the section Restrictions to Practice: Professional Licensing, Mexico is among the few countries in which the law allows pharmaceuticals to be sold in retail outlets without any pharmacist managing, supervising, or assisting in their dispensing. Pharmacist involvement is required only when dispensing psychotropic drugs. Moreover, as previously observed, many low- and middle-income countries do not enforce the law requiring pharmacist management, supervision, and assistance when retailing medicines.

There is a cost–benefit tradeoff to be evaluated by policy makers: having a pharmacists manage, supervise, and assist in the dispensing of medicines is expensive, particularly in the countries that lack qualified professionals, and the pricing of medicines will reflect these extra costs.

Zoning: Restricting Entry And Location Of Pharmacies By Tests Of Need

In most of continental Europe, independent pharmacists are subject not only to tight licensing regulations that restrict the trade to licensed professionals but also to government regulations that limit the number of pharmacies that can be open to the public in any given catchment geographic area. In 17 of the 27 EU Member States, entry restrictions under the formal form of zoning, quotas, or distance regulations apply. Among these countries, Slovakia has deregulated entry since 2005 and Slovenia is deregulating it. Hungary experienced some deregulation of entry and reregulation between 2007 and 2010. Portugal introduced some less restrictive entry conditions in 2006.

When zoning is in place, pharmacies are authorized to enter after some needs test, usually when the population to be served reaches some specified threshold. Three EU Member States have explicit distance regulations: Greece, Hungary, and Spain. Another three Member States (the Netherlands, Ireland, and the UK) indirectly control the number and location of pharmacies by awarding contracts from national health services to a restricted number of community pharmacies. Among the Member States, only, Bulgaria, Cyprus, the Czech Republic, Estonia, Germany, and Poland do not restrict entry according to any population need test.

Outside the EU, Norway at one time restricted entry. Currently, entry is free but pharmacy market shares are restricted. Entry is also free in Iceland, the US, Canada, and the Philippines. In Latin America, there are cases like the Dominican Republic where minimum distance entry regulations are in operation, and in countries like Chile and Mexico where the number and location of pharmacies is freely determined. South Africa has a restrictive system as new pharmacies have to obtain a certificate of need. It also operates a system of competitive price bidding for franchises. Mali has placed some limits to opening a pharmacy at the capital, Bamako, with the (unsuccessful) intention of moving new entrants to rural areas. India has passed more liberal legislation between 2000 and 2004. Mexico and the Philippines have been very successful in promoting the entry of pharmacy chains only for dispensing generics brands, boosting availability, and affordability of medicines throughout their territories.

Price Regulation

Pricing regulation in the pharmacy industry takes the form of mandated dispensing fees, maximum margins (percentage over the final price), or markups (percentage on the manufacturer’s or wholesale price). Margins or markups can be fixed or regressive with respect to prices, and there might be rules mandating that no discounts and promotions are offered to the public, or that such discounts should be subject to a maximum.

Entry restrictions in Europe are typically coupled with price or retail margin regulations. Seventeen out of 25 EU Member States (all but Romania and Bulgaria, for which the authors do not have information) set the pharmacy markups by regulation. Discounts are not allowed. The other eight set maximum markups or fees for services allowing competition in discounts and promotions.

Discounts to final consumers are allowed only in Cyprus, the Czech Republic, Estonia, Lithuania, the Netherlands, Poland, Portugal, and Slovakia. Denmark, France, Germany, Ireland, and Spain allow for limited discounts in medicines not listed for mandatory health care systems reimbursement. The Netherlands, the UK, and Spain mandate some clawbacks to the national health systems that get back from pharmacies part of the discounts obtained from wholesalers and manufacturers.

In general in the EU, pharmacists are paid a fixed but regressive margin with respect to the price of each medicine sold. In Ireland, the Netherlands, and Slovakia pharmacists are paid a fixed fee for service, and in the case of the UK their purchase costs are reimbursed and there is a separate fixed fee for service.

In the US and Canada, pricing is free but it is agreed with Health Maintenance Organizations and the federal programs (Medicare and Medicaid) for reimbursed medicines.

Australia, New Zealand, and Syria have also regressive margin with respect to final prices to consumers. By contrast, in most low and middle-income countries, pricing is regulated as a fixed margin over prices to consumers.

Benefits And Risks From Regulating Pharmacies

Having reviewed entry and price regulation in the world-wide industry, now it is time to turn to some economic analysis of the rationale for such regulations and review the practical experience with such regulations.

To start with it is required to assess how quality deterioration can result both in the presence and absence of information asymmetries. When quality deterioration is present, all four regulations outlined before (professional licensing, ownership restrictions, prescribing, and dispensing separation and management/supervision/assistance mandates) may help the industry to reduce it at a reasonable cost. Then the pros and cons of entry and pricing regulations are reviewed.

Regulating The Quality Of Service

Quality Deterioration

Professional services, in general, involve the application of professional human capital in order to judge individual cases. As a result of this peculiarity of the professional trades, the quality of the service provided is difficult to assess objectively. In the case of the pharmacy business, in general, a medical doctor makes the judgment as to which drug treatment is appropriate for each patient. Among the pharmacists’ duties, the most important is to fill the prescription correctly, to advise the patient how best to comply with the treatment, and to prevent undesired drug interactions. In the case of OTC drugs, the pharmacist also assumes the duty of advising the patient regarding her decision on which drug is better for her specific minor ailment.

In contract theory terms, the patient is the principal and pharmacist is her agent. However, the agent has an information advantage. The pharmacist decides whether to invest effort in providing a high-quality service, or shirk and provide a low-quality service. The patient knows, but only imperfectly, about the quality of the service received after the purchase. This is a simple and typical hidden information situation usually termed a ‘screening problem.’ It can lead to quality deterioration phenomenon through adverse selection of service providers in the market. Patients would like to screen the high and low quality of service pharmacies out of the pool of available pharmacies. The separating equilibrium with full information is the one that allows the patients to pay for the high or low-quality service, depending on their preference and willingness to pay. For example, patients receiving new treatments may prefer to pay for a high-quality service, whereas patients with chronic diseases receiving repeat prescriptions may prefer to pay less for a low-quality service.

When patients cannot distinguish the pharmacy type due to the lack of information regarding the provider, and only uniform pricing is available as arbitrage is almost costless, the well-known problem of adverse selection is encountered. All pharmacies would end up by serving only at the low price and low-quality level.

Professional licensing may be used so as to regulate minimum quality standards: it screens the more able providers and deters shirking. Almost any licensing requirement imposes a fixed cost of entry that may drive out the least able providers: the entry cost is simply not affordable for the potential entrants with lower abilities.

Quality deterioration may also occur when there are no information asymmetries, when providers serve the marginal consumer having the lowest willingness to pay for quality. Minimum quality standards can help to avoid such outcomes. Such regulations are supposed to drive quality up, lifting it closer to the willingness to pay by the average consumer. In doing so, these regulations can raise welfare. Professional licensing and rules restraining management, supervision, and advising only to professional pharmacists may help out to monitor minimum standard quality regulations.

Licensing, Externalities, And Public Goods

Professionals in general, and pharmacists in particular, provide services not only to their consumers but sometimes also to the public at large in the form of externalities or by providing public goods. When pharmacists dispense vaccines, it is not only their customers that gain some surplus but also the public at large thanks to an externality in the form of a reduced probability of other people contracting the disease in question. Likewise, when pharmacists dispense narcotics or antibiotics only with a proper prescription, it is not only that their patients benefit but also the public in general. Avoiding drug dependence or antibiotic resistance is something that improves other people’s health.

The regulation of professional behavior is usually justified by rationales such as these. Codes of conduct for filling prescriptions, checking for drug interactions, serving chronic patients, and so on, contribute to the benefit of both patients and the public at large. Pharmacists also produce positive externalities in their role of gatekeepers.

Pharmacists are paid for these services. Some argue that, while performing these duties, the pharmacist should keep the associated rents. The threat of being expelled from the licensed profession would then also entail loss of rents that further restrains them from underperformance. Entry restraints and professional body oversight is thus viewed as a mechanism for encouraging compliance with their professional obligations.

Alternatively, the pharmacist might be paid for preventive services.

Regulating Entry Through A Needs Test And Pricing

Theory is ambiguous as to whether there is scope for welfare enhancing entry regulations in markets of differentiated products in the retail pharmacy industry. The literature has identified instances in which restrictions in the number of suppliers or price controls, or a combination of both, may be welfare increasing.

In each locality, entry brings the benefits of greater price competition and better local availability (access). Consumers gain from both, receiving cheaper medication and having outlets closer to where they are located. Each new entrant steals business from the pharmacies located in their catchment area but at the same time brings benefits to consumers. In industries in which there are no fixed costs of entry (an upfront cost not related to the volume of business), free entry is welfare enhancing.

Free entry may, however, be excessive. Entry is excessive whenever differentiation by location is low (consumers are not willing to pay for having more pharmacies at different locations in any catchment area). In this case, entrants add less to the consumer surplus when they enter the market than the amount they reduce the profits to incumbents by stealing their business from them. So, if the fixed costs of servicing patients are large, there is scope for a welfare enhancing regulation that restricts entry. At the same time, competition in each catchment area will take the form of an oligopoly game, so there might be also scope for pricing regulation. The equilibrium pricing game drives pricing in oligopoly well above marginal or average costs.

The more general models of pricing in oligopoly games with product differentiation show that the Nash equilibrium implies prices that differ from marginal costs. Additionally, when pharmacies have dominant positions in their catchment areas, there is also room for policy to avoid what it is known as double marginalization, when the upstream market of manufacturers or wholesalers is not competitive enough. Double marginalization appears when prices turn out to be excessive not only because manufacturers or wholesalers have upstream market power to overcharge in equilibrium but also retailers can overcharge as they can profit from their dominant position downstream. Limiting this double marginalization by allowing manufacturers or the government to set the final price can be welfare enhancing.

However, private interests might lobby for entry restrictions and pricing regulations to ensure that pharmacists obtain excess profits or pure regulatory rents. The European Commission has initiated infringement proceedings against countries that operate over tight entry and ownership regulations on the grounds that restricting freedom of establishment is neither an adequate nor a proportional public interest policy. On the contrary, the EC argues that it is a way of guaranteeing rents for incumbent pharmacies. The European Commission has initiated infringement proceedings against Austria, Bulgaria, France, Germany, Italy, Portugal, and Spain, though the results of infringement proceeding have been modest.

Attempts to reform entry and pricing regulations are problematic as the incumbents occupying the upper tail of the distribution and who gain most from the restrictions will invest heavily in lobbying to avoid policy reforms.

Concluding Remarks

Countries should choose the combination of policy options according to their efficiency and feasibility in any constrained environment.

Getting prices right (i.e., close to average costs, whether by competition, regulation, or contractual arrangement) is key to approaching an optimum. It makes entry regulation unnecessary. However, it should be borne in mind that any good price regulation or contractual arrangement has to get the number of pharmacies right when setting the price.

Adjusting the price to the costs in different localities is also important and difficult but it is essential to make sure that pharmacies are available and open to the public throughout the territory.

When countries do not have the institutions, the human capital or the technology to get the pricing right or to get the right number of pharmacies, they have to evaluate whether capture drives regulation toward undesirable outcomes and whether free pricing and entry is an attainable and reasonable second best.

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