Until 1994, pharmaceutical products seeking market authorisation in Norway were required to demonstrate a fulfilment of unmet medical need. This clause enabled the national regulator to dramatically limit the number of products on the market whilst encouraging price competition to keep drug expenditure low and was credited with encouraging the development of drugs with genuine added therapeutic value and reducing the incidence of antimicrobial resistance. Norway was forced to abandon its Medical Need Clause (MNC) when it joined the European Economic Area as it was incompatible with the acquis communautaire of the European Union. This article reviews Norway's experience with its MNC in light of contemporary debates in European health policy. It discusses the potential contribution of an MNC-style regulation to improving health, reducing illness, ensuring sustainable health systems and fostering pharmaceutical innovation. It concludes by asking how these findings can inform current European Union debates over the growing cost of prescription drugs and direction of pharmaceutical development.