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Entry and Competition of Retail Pharmacies: A Case Study of OTC Drugs Sales and Ownership Deregulation

Author

Listed:
  • Matus Bilka

    (University of Economics in Bratislava, Faculty of Economics, Department of National Economy)

  • António Portugal Duarte

    (Univ of Coimbra, CeBER, Faculty of Economics)

  • Martin Lábaj

    (University of Economics in Bratislava, Faculty of Economics, Department of National Economy)

Abstract

This paper provides new empirical evidence on entry and competition in the Portuguese market of retail pharmacies after its deregulation in 2004. We estimate the market-size thresholds required for pharmacies to enter the market and analyse the toughness of competition in the market. There are three main findings in the paper. First, entry thresholds decreased over the years, which led to better coverage and availability of pharmaceutical services. Second, the toughness of competition among pharmacies increased and the deregulation of over-the-counter drug sales contributed to the expansion of services provided by pharmacies. Third, population restrictions that prevailed in the market were too restrictive and should be reconsidered by regulation authorities.

Suggested Citation

  • Matus Bilka & António Portugal Duarte & Martin Lábaj, 2022. "Entry and Competition of Retail Pharmacies: A Case Study of OTC Drugs Sales and Ownership Deregulation," CeBER Working Papers 2022-07, Centre for Business and Economics Research (CeBER), University of Coimbra.
    • Handle: RePEc:gmf:papers:2022-07
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    More about this item

    Keywords

    Entry model; market competition; regulation; retail pharmacy.;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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