The development of a single European market for medicines over the last decades is a major achievement by European Community legislation. The establishment of the European Medicines Agency (EMA) in 1993 was crucial for the breaking up of system of separate national markets, creating a free flow of medicines throughout the European Union. However, the benefits of a more competitive generics market and from parallel import and export have developed slowly, and there are still potential gains from improved efficiency in the market for generic drugs. The harmonization of market authorization for new medicines through EMA was a necessary but not sufficient condition for the development of a single market. Pricing and reimbursement measures at the national level also have an impact on the functioning of the internal market. The transparency directive from 1989 is the second important legislation for the development of a European market for medicines. Since Member States have the power to organize and finance their health care systems, this directive is limited to procedural obligations for member states. The directive states that a decision has to be made within 180 days, decisions have to be made using objective and verifiable criteria and there has to be an appropriate appeal mechanism [1]. A major change in the market in the last decade is the increasing importance of health technology assessment (HTA), including cost-effectiveness, for decisions about market access. While HTA has been a health policy instrument in Europe since the 1980s, it is only during the last decade that it has been directly linked to decisions about pricing, reimbursement and guidelines for new medicines. The influence of national agencies, such as NICE and IQWIG, has been so great that it can be seen as a step back, toward national decisions about the availability of drugs. A new medicine can be marketed, but without inclusion in national reimbursement systems there is a very limited market in practice. The growing number of orphan drugs and targeted therapies aimed at small patient groups and consequently with high prices has contributed to this. European-wide market authorization in itself has no value for the innovator and does not make a single market working if other restrictions persist on the national level. Since third-party payment for medicines is the fundamental issue, you may argue that the only way to form a single market is to create a single health insurance in Europe. At the moment, patients in Europe have very different health insurance coverage. Health care spending per capita varies with a factor of three, mainly reflecting differences in GDP per capita between EU countries. Health care systems in Europe are converging, but the process is very slow and the relevant question is what can be done now to further develop the European market for medicines. A need for action is also triggered by a third piece of European legislation, the EU directive on patients rights to cross-border health care [2]. The directive is set to clarify the right of patients to seek health care in another EU country while being reimbursed by their national system. It is important for creating a European market for health care and will force health care payers in different countries to harmonize decisions on what they are paying for with their health insurance. A European-wide health insurance is far away, but the need for a policy of harmonization is already here. The key concepts for development of a new policy and potential amendments to legislation to further improve the functioning of the internal market for medicines are assessment of value, access to therapy, and reward for B. Jonsson (&) Stockholm School of Economics, Stockholm, Sweden e-mail: Bengt.Jonsson@hhs.se