Abstract
The European Union has experienced closer market integration through the Single Market Program (SMP) and Economic and Monetary Union (EMU) since the 1990s. The SMP has motivated changes on the product markets by the elimination of trade barriers, whereas the EMU has facilitated changes by the common notes and coins across the euro area. In addition, there have been specific attentions and structural reforms in various product markets to increase competition, monitor cross country price differences and increase transparency. This study is aimed to find how the integration process has affected price differences in the European pharmaceutical market, which is the fifth largest industry in the EU. Using the data between 1994 and 2003 from five EU countries on prices of cardiovascular disease drugs, the results provide evidence that there are still significant price differences across the nations in the single pharmaceutical market in the European Union.