There is a strong political will in theWestern Balkan states to align the region'spharmaceutical legislation and practice with that of theEuropean Union. Accordingly, recent policy changes wereaimed at harmonization of policies with other Europeancountries. Several national drug laws were updated orcompletely re-written in the last several years. Morespecifically, provisions were made for the simplification ofdrug registration requirements, licensing of professionalsand businesses in the sector, implementation of ethicsstandards, price controls and reimbursement of drugs throughnational health insurance systems. Countries in the regionhave introduced various measures for cost containment,mostly through positive lists with various co-payment levelsor expenditure caps for prescribing physicians. Someinstitutional buyers are using pooled procurement with opentenders to ensure lower prices. Nevertheless, there arestill a number of challenges such as lack of enforcement ofrules and standards, limited access to drugs for low incomepopulations, inefficiencies in resource allocation and inthe distribution chain, lack of control over physiciansprescribing behavior and occasional conflicts between publichealth and industrial policy objectives. For the foreseeablefuture, there will be a need for further capacity buildingin the pharmaceutical sector, with a focus on increasedoversight and higher professional standards, more efficientuse of limited public resources, equity of access andrational use of medicines. Nevertheless, drug expenditure isset to grow in this region as it did in other countries inEastern Europe, typically at a rate of about twice GDPgrowth, due to inevitable factors such as innovation, agingpopulations, increasing incomes and better access to healthcare.