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.
