The aim of this master thesis is to investigate if there is a need for transfer pricing in Norwegian hospitals, and which transfer pricing methods should be considered if such a need exists. As divisions in Norwegian hospitals are not always committed to reimburse goods or services provided by other divisions, some divisions have the opportunity to increase production, and potentially improve their operating profit, without compensating other divisions taking part in production. As internal firm inefficiency may result, this serves as the background for the thesis work. The thesis first builds a theoretical framework from literature findings on transfer pricing to identify both potential advantageous, and disadvantageous arguments of transfer pricing. In addition, the thesis identifies and discusses available transfer pricing methods. A qualitative research design is chosen, and semi-structured interviews used to explore the theoretical framework and choice of transfer pricing method. Three potential advantages of transfer pricing are identified; a more well-functioning internal market (the economic argument), improved quality (the organizational argument) and improved monitoring and control due to increased quality of data (the evaluational argument). One potential disadvantage of transfer pricing is identified: the cost of developing, implementing and operating the transfer pricing system (the functional argument). The main conclusion of the thesis is that the decision to implement a transfer pricing system in a hospital will depend on the sum of the relevant advantageous and disadvantageous arguments of transfer pricing, and that the advantageous economic argument and disadvantageous functional argument are the main arguments affecting this decision. In addition, it is concluded that a transfer pricing system must involve a mechanism that secures the longevity of the economic argument. Last, the thesis concludes that actual cost or standard cost should be the preferred transfer pricing method in the investigated hospital, but that the choice of transfer pricing method is less important than securing the longevity of the economic argument.