OBJECTIVES: The Stability and Growth Pact approved by the Portuguese Government in 2010 limits the expenditure growth in 1% for reimbursed pharmaceuticals in outpatient sector. The Memorandum of Understanding signed in May 2011 between the Government and the International Authorities subsequently has increased the requirements to reduce public expenditure. Considering the pricing and reimbursement changes, this study aims to: 1) analyze public expenditure trends on medicines, and 2) identify the main factors and impacts. METHODS: We have analyzed the database sales and prescription data from Portuguese community pharmacies, and performed simulations to measure the impact of policy measures. The statistical analysis of monthly data by product was performed with SAS. RESULTS: The NHS expenditure in outpatient medicines has increased 5.6% in 2010. The legislation approved in June 2009, that established generics reimbursement at 100% for some pensioners (withdrawn in June 2010), was responsible for more 26.8 million euros of NHS spending in 2010. Nevertheless 117.1 million euros were explained by new molecules reimbursed in the last three years. After July 2010 and due to the 1% VAT increase, the expenditure had increased 7.5 million euros. The Health Subsystems (special security schemes for certain professions) had also contributed positively: in December about 7.4 million euros were transferred from the ‘ADSE’ (civil servants subsystem) for NHS. At the end of 2010, the Government adopted further measures to control public expenditure, such as 6% prices deduction and several reductions in pharmaceuticals reimbursement levels. Immediately the NHS medicines expenditure decreased 21.2% in the four first months of 2011. In opposition the hospital market is growing 3.5%. CONCLUSIONS:  Besides price and reimbursement administrative reductions, with limited impact in the short run, it would be important to consider measures, that should be assessed on a periodic basis to identify the best strategies to promote rationality and efficiency in the outpatient and hospital sector.