OBJECTIVES: We followed the retail prices of the year 1994 cohort of new chemical entities ('the 1994 NCE cohort') in Finland until March 15, 2003, before the introduction of generic and parallel import substitution on April 1, 2003. METHODS: The 1994 NCE cohort did not have any sales in 1993 by definition. The follow-up was done in databases Pharmaca Fennica (1994-2003), SLD Pharma (1993-2002), SLD Nordic (1998-2003) and SLD Price (1997-2003). Nominal and official Consumer Price Index (Statistics Finland) adjusted (real) retail prices (RP; including 8% VAT) were used. RESULTS: From 1993 to 2003, we identified 111 marketing companies, 1196 active substances, 2515 trade names (products) and 9606 packages. In 1994 altogether 19 marketers introduced 32 NCE's, of which 13% (4/32) were combination products. Some 87% (28/32) of NCE's, and 70% (42/60) of packages survived till the end of the follow-up period. From 1994 to 2003 mean package RP decreased 19% in nominal and 30% in real prices. Real prices decreased 32% in No Refund, 31% in Basic (50%), 19% in Lower (75%) Special and 22% in Higher (100%) Special Refund categories. CONCLUSIONS: In 1994 Finland became a member of the European Economic Area. Since then, retail prices have decreased markedly in Finland even before the introduction of generic and parallel import substitution. The observed 30% decrease in real retail prices among the survival cohort suggests that medicines have clearly become more cost-effective.