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Purpose – To analyse the development of pharmaceutical policy in the Dutch market for outpatient prescription drugs since the early 1990s.

Methodology – A literature review and document analysis is performed to examine the effects of pharmaceutical policy on the performance of the Dutch market for outpatient prescription drugs since the early 1990s.

Findings – Government efforts to control prices of pharmaceuticals were effective in constraining prices of in-patent drugs, but had an opposite effect on the prices of generic drugs. The gradual transition towards managed competition – that particularly gained momentum after the introduction of the new universal health insurance scheme in 2006 – appears to be more effective in constraining prices of generic drugs than earlier government efforts to control these prices.

Originality – Comparative analysis of the impact of price regulation and managed competition on generic drug prices in the Netherlands.

Implications – Implications of the changing role of health insurers are discussed for the future market for prescription drugs and role of pharmacies in the Netherlands.