However, it is not really a single market. Because of subsidiarity in healthcare, each member state operates its own pricing and regulatory framework, breaking the drugs market into smaller fragments. Once drugs go off patent in America, their price drops by as much as 90 per cent thanks to fierce generic competition. In Europe, even when a drug has been approved by regulators, it can be launched only once pricing has been agreed with individual countries. That can take months or even years, particularly if governments use delays as a method of controlling drugs budgets or protecting national champions.
Some countries have a further hurdle.
In the UK, the National Institute of Clinical Excellence assesses a medicine's cost-effectiveness in relation to other drugs. When in 1999, Nice refused to sanction the use of Relenza, Glaxo Wellcome's new flu treatment, Sir Richard Sykes, Glaxo's chairman, declared that Britain was becoming a less and less attractive base for pharmaceutical companies. Prices are largely determined by the market. Europe's fragmented market, which often means a duplication of corporate effort and expense, has been mitigated to some extent by the establishment in 1995 of the European Medicines Agency, a centralised regulator. Whatever the underlying cause, US companies have been lifted up on the tide of their buoyant domestic market, leaving European companies struggling to stay in touch.