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Prescription pharmaceutical spending accounts for a significant proportion of total health spending, ranging from over a third to just under a sixth in OECD and emerging countries and is the second largest component of health budgets after salaries of health care professionals. Given the peculiarities of pharmaceutical markets (multiple stakeholders, oligopolistic structure, imperfect information and agency) and the multiple — sometimes conflicting — objectives of pharmaceutical policy (macroeconomic efficiency, microeconomic efficiency, quality of care, access, and promotion of industrial policy including R&D investment), governments and health insurers intervene in pharmaceutical markets. Such intervention takes place both on the supply- and demand-side and focuses on a number of key variables, such as the prices of prescription pharmaceuticals, the barriers to entry in individual markets, the behavior of or the choices made by health care professionals (doctors and pharmacists) and the choices patients make. The policy mix in order to satisfy the above policy objectives varies quite dramatically across countries and so does the effectiveness of individual policy measures and the rigor with which they are pursued. This chapter outlines the importance of pharmaceuticals as a health care input, discusses the supply- and demand-side strategies in order to influence prices, volume and expenditure, the various modalities with which they are implemented in different settings, and presents evidence on the impact of such intervention by drawing on the international literature.