ObjectivesMany European countries regulate the markets for prescription drugs in order to cope with rising health expenditures. On the other hand, regulation distorts incentives to invest in pharmaceutical R&D. This study aims at empirically assessing the impact of regulation on pharmaceutical R&D expenditures.MethodsWe analyze a sample of 20 leading pharmaceutical companies between 2000 and 2008. The share of sales in Europe serves as a proxy for the degree of pharmaceutical regulation. We control for other firm specific determinants of R&D such as cash flow, company size, leverage ratio, growth rate, and Tobin’s q.ResultsOur results suggest a nonlinear relationship between European sales ratio and R&D intensity. Beyond a threshold of 33% of sales generated in Europe, a higher presence in Europe is associated with lower R&D investments.ConclusionThe results can be interpreted as further evidence of the deteriorating effect of regulation on firm’s incentives to invest in R&D.

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A487 when and for what type of service use publicly financed health care. Methods: Data was retrieved from National Health Insurance Fund Administration of Hungary (NHIFA) and Central Statistical Office. Current study's base was processing the last five years' statistical data (2007-2012), concerning health care of third country citizens permanently living in Hungary. We analyzed the volume, place and medical specialty of these services. Results: In the last 5 years third country citizens required inpatient care 9414 times (61% in Budapest), emergency care 11776 times (63% in Budapest), outpatient care 72306 times (57% in Budapest). Patient accessed health care providers due to medical problems in the following medical fields: obstetrics (19%), surgery (18%), laboratory (18%), pediatrics (7%), and ophthalmology (6%). Most of the patients are from Ukraine (42 %), China (22 %), Vietnam (11 %), ex-Yugoslavia (6 %) and Russia (6 %). Analysis by nationalities shows that Chinese population requires health care relatively few times (for instance, 2011: 5%, in 2012: 6%) and even these are almost exclusively done in Budapest. In contrast USA citizens see doctors relatively often (2011: 8%, 2012: 8%), mainly in relation to diagnostics and curative surgery. From the neighboring non-EU states (23095 people, 31%) Ukrainian and (5709 people, 7%) ex-Yugoslavian citizens needed health care in the investigated period. Despite previous expectations, need for health care is not the characteristics of border regions but the capital city. ConClusions: Utilization of the Hungarian publicly financed health care system is significant by third country citizens. When planning health care capacity, this crucial fact must be taken into consideration.