Parallel Imports of Pharmaceutical Products in the European Union

Ganslandt, Mattias ; Maskus, Keith E.

World Bank, Washington, DC

关键词: AVERAGE PRICES;    BASE YEAR;    BENCHMARK;    COMMON MARKET;    CONSUMERS;   

DOI  :  10.1596/1813-9450-2630
RP-ID  :  WPS2630

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The point of parallel imports ofpharmaceuticals is arbitrage between countries withdifferent prices. For several years, an important issue inthe European Union (EU) has been the evident conflictbetween differing price regulations in the member states, onthe one hand, and the consequences of parallel trade, on theother. In the EU, so long as the manufacturer has placed thegood on the market voluntarily, the principle of freemovement of goods allows individuals, or firms within the EUto trade goods across borders, without the consent of theproducer. In this context, the authors study the effects ofparallel trade in the pharmaceutical industry. They developa model in which an original manufacturer competes in itshome market with parallel-importing firms. The two keyhypotheses in their theoretical analysis are these: First,if the potential for parallel imports is unlimited, themanufacturer chooses deterrence, and international pricesconverge. Second, with endogenously limited arbitrage, themanufacturing firm accommodates, and the price in the homemarket falls as the volume of parallel trade rises. Theauthors test their hypotheses on data from the Swedishmarket for 1995-98. Before 1995, Sweden prohibited parallelimports of pharmaceutical products, but entry into the EU,on January 1, 1995, required Sweden to allow them. Simpleempirical tests favor the accommodation hypothesis with atime lag. Using data from Sweden, the authors find that theprices of drugs, subject to competition from parallelimports increased less than those for other drugs between1995 and 1998. Roughly, three-fourths of this effect can beattributed to the lower prices of parallel imports, andone-fourth to lower prices charged by the manufacturingfirm. Econometric analysis finds that rents to parallelimporters (or resource costs in parallel trade) could bemore than the gain to consumers from lower prices.