scholarly journals Strategic Responses to Parallel Trade

2011 ◽  
Vol 11 (2) ◽  
Author(s):  
Margaret Kyle
Keyword(s):  
Parallel Imports ◽  
Parallel Trade ◽  
The European Union ◽  
Strategic Responses ◽  
Product Lines ◽  
Pharmaceutical Firms ◽  
Drug Prices ◽  
Arbitrage Opportunities ◽  
Price Discriminate ◽  
The Eu

Abstract High prices for patented pharmaceuticals have prompted many governments to consider allowing competition from “parallel imports,” or products first sold at lower prices in other countries. This paper examines how pharmaceutical firms have responded to changes in intellectual property rights and trade barriers that legalized parallel imports within the European Union (EU). The threat of arbitrage by parallel traders reduces the ability of firms to price discriminate across countries. Due to regulations on price and antitrust law on rationing supply, pharmaceutical firms may rely on non-price responses. Such responses include differentiation of products across countries and selective “culling” of product lines to reduce arbitrage opportunities, as well as raising arbitrageurs’ costs through choice of packaging. Using a dataset of drug prices and sales from 1993-2004 covering 30 countries, I find evidence that the behavior of pharmaceutical firms in the EU with respect to their product portfolios is consistent with attempts to reduce parallel trade. This may at least partially explain why parallel trade has not yet resulted in significant price convergence across EU countries. Accounting for non-price strategic responses may therefore be important in assessing the welfare effects of competition from parallel imports.

scholarly journals Regulating The Pharmaceutical Industry In The European Union: A Dilemma Of Achieving A Single Market

2010 ◽  
Vol 9 (7) ◽  
Author(s):  
Aysegul Timur ◽  
Gabriel Picone
Keyword(s):  
European Union ◽  
European Commission ◽  
Single Market ◽  
Pharmaceutical Market ◽  
Parallel Trade ◽  
Hedonic Price ◽  
The European Union ◽  
Pharmaceutical Pricing ◽  
Price Differences ◽  
The Eu

Pharmaceutical pricing and reimbursement regulations create a dilemma to achieve a single pharmaceutical market in the European Union (EU). Although considerable progress has been made in the past years in harmonization of the pharmaceutical markets, the pricing decisions or systems have continued to be operated on a national basis, which results in price differences across the member states. These price differences create opportunity for parallel trade which, in combination with the EU single market principle calling for the free movement of goods, could lead to reduction in price differences. Among the harmonization efforts by the European Commission, national decisions on pricing and controls, plus parallel trade dilemma, we attempt to analyze the bilateral drug price differences using a sample of countries that represent from strict to relatively less pharmaceutical regulations. Almost all member countries regulate pharmaceutical prices, either directly or indirectly, in the EU, which creates less or more price differences despite market integration. This paper is simply aimed at analyzing price differences in the European pharmaceutical market, employing annual 1994–2003 IMS Health Data from five EU countries (Germany, the United Kingdom, France, Italy and Spain) on prices of molecules used to treat cardiovascular disease. The analysis includes a two step approach. First, we calculate the common use of Laspeyres and Paasche weighted price and quantity indices to make comparisons for both bilaterally matched molecules (considering Spain as the base country) and diffused molecules that are available for five countries. Second, we adopt a hedonic price regression to control observable quality and market characteristics and then re-analyze price differentials. The study concludes that price differences still exist, but are decreasing over time. Even though the results are sensitive to sample and methods used, we found implicit evidence that harmonization efforts by the European Commission may ease reducing price differences in the long run, but it should not be interpreted as moving toward complete elimination of price differences due to complexities in this industry.

scholarly journals The Concepts of Trademark Exhaustion and Parallel Imports: A Comparative Analysis between the EU and the USA

2016 ◽  
Vol 6 (2) ◽  
pp. 28-57 ◽  
Author(s):  
Samuel Dobrin ◽  
Archil Chochia
Keyword(s):  
European Union ◽  
Comparative Analysis ◽  
Research Topic ◽  
Comparative Approach ◽  
Parallel Imports ◽  
The European Union ◽  
The Usa ◽  
The Eu

Abstract The article intends to analyze the closely correlated concepts of trademark exhaustion and parallel imports. The growing importance of these concepts in the current world, especially in the European Union, makes it an interesting research topic, even though the concepts are complicated due to their nature and different actors involved. The authors use comparative approach, concentrating on two world leaders in the field, in order to discover what is the approach of the EU as well as the approach of the USA to the concepts of trademark exhaustion and parallel imports, what are the benefits and weaknesses of these approaches, and analyze why these markets have arrived at certain conclusions.

scholarly journals Impacts of EVFTA on the exportation of Vietnamese agricultural products to the EU market

2021 ◽  
Author(s):  
Hoang Nguyen Tien ◽  
Ngan Trinh Thuy
Keyword(s):  
European Union ◽  
Trade Diversion ◽  
Agricultural Products ◽  
Animal Origin ◽  
Trade Creation ◽  
The European Union ◽  
Total Change ◽  
Product Lines ◽  
Specific Product ◽  
The Eu

This study aims to appraise the potential impacts of the European Union – Vietnam Free Trade Agreement (EVFTA) on Vietnam’s agricultural exports to the European Union (EU). The authors apply the SMART model to quantitatively estimate how tariff elimination under this agreement affects trade value between 2 parties, with the base year of 2018. By simulating the zero-rate tariff scenario for 17 2-digit HS codes of agricultural goods, the authors analyze the total change in export, trade creation, and trade diversion effects of the whole sector. The 4 important product groups that witnessed the highest change, including HS 04 (dairy produce, birds’ eggs; natural honey; edible products of animal origin), HS 08 (edible fruit and nuts, peel of citrus fruit or melons), HS 09 (coffee, tea, maté, and spices) and HS 20 (preparations of vegetables, fruit, nuts or other parts of plants) are further classified into products with 4-6-digit HS codes to find out the specific product lines that benefit the most. The SMART outputs reveal that EVFTA positively affects the export of agricultural products from Vietnam to the EU market, with trade diversion dominating trade creation effects. Based on these findings, recommendations are proposed to the state authorities as well as domestic enterprises to promote the export of farm produce.

scholarly journals EU Enlargement, Parallel Trade and Price Competition in Pharmaceuticals: Has the Price Competition increased?

2016 ◽  
Vol 16 (2) ◽  
pp. 1069-1092
Author(s):  
David Granlund ◽  
Miyase Yesim Köksal-Ayhan
Keyword(s):  
Driving Force ◽  
Price Competition ◽  
Eu Enlargement ◽  
Consumer Perceptions ◽  
Parallel Imports ◽  
Parallel Trade ◽  
Price Difference ◽  
The Cost ◽  
Pharmaceutical Prices ◽  
The Eu

Abstract Given the cost of trade and availability of pharmaceuticals, the driving force for parallel trade is the price difference between the source (exporting) and the destination (importing) country. An increase in the price difference or in the availability of pharmaceuticals for parallel trade should increase price competition in the destination country. Using 2003–2007 data from Sweden we investigated whether EU enlargement in 2004, when new countries with low pharmaceutical prices joined the EU, increased competition from parallel imports. Drugs facing competition from parallel imports are found to have on average 19–22% lower prices than they would have had if they had never faced such competition. The EU enlargement is, however, not found to have increased this effect, which might be explained by derogations and changes in consumer perceptions of parallel imports.

Managing the Gray Market in the European Union: The Case of the Pharmaceutical Industry

1995 ◽  
Vol 3 (3) ◽  
pp. 11-33 ◽  
Author(s):  
Peggy E. Chaudhry ◽  
Michael G. Walsh
Keyword(s):  
European Union ◽  
Pharmaceutical Industry ◽  
Trade Agreement ◽  
Legal Framework ◽  
Marketing Strategies ◽  
Parallel Imports ◽  
The European Union ◽  
Managerial Control ◽  
Gray Market ◽  
The Eu

The emergence of significant trade blocks, such as the European Union (EU) and the North American Free Trade Agreement, has established the need for studies on managerial strategies to effectively circumvent gray markets in these regional marketplaces. Therefore, this article reviews the necessary market conditions required to foster gray markets by specifically exploring the regulated price and legal environments of the pharmaceutical industry in the EU. The article addresses the significance of, and relationship between, Articles 30 (promoting the free movement of goods within the EU) and 36 (permitting limits on imports and exports in certain cases) of the EU Treaty. Relevant decisions of the European Court of Justice are summarized and analyzed, with particular emphasis on those applying the Exhaustion of Rights Doctrine established in the 1974 landmark case of Centrafarm v. Sterling Drug. The article also examines the limits that the European courts have placed on the doctrine and suggest possible tactics that may be employed by pharmaceutical managers attempting to curtail the distribution of gray market pharmaceuticals. Also addressed are managerial perceptions regarding gray markets in the EU by means of personal interviews with 13 multinational pharmaceutical firms. Four principal themes emerged in the interviews on the topic of parallel imports: the degree to which a firm's exposure to gray markets varies in the EU; the current consolidation of wholesalers to bolster parallel imports; national governments’ overt or covert condonation of parallel imports to reduce the national drug bill; and the lack of managerial control to prevent gray markets. In this connection, the article concludes with a discussion of various anti-gray marketing strategies to facilitate managerial control in this trade block. In general, the manager must employ strategic links between the regulated price and legal framework governing the pharmaceutical marketing environment in the EU with various anti-gray marketing strategies such as supply interference, product differentiation, and marketing information systems.

scholarly journals On the Effect of Parallel Trade on Manufacturers' and Retailers' Profits in the Pharmaceutical Sector

Econometrica ◽  
2020 ◽  
Vol 88 (6) ◽  
pp. 2503-2545 ◽  
Author(s):  
Pierre Dubois ◽  
Morten Sæthre
Keyword(s):  
Prescription Drugs ◽  
Structural Model ◽  
Parallel Imports ◽  
European Economic Area ◽  
Parallel Trade ◽  
Demand Model ◽  
Reimbursement Price ◽  
Price Differentiation ◽  
Lump Sum ◽  
Arbitrage Opportunities

Differences in regulated pharmaceutical prices within the European Economic Area create arbitrage opportunities that pharmacy retailers can access through parallel imports. For prescription drugs under patent, parallel trade affects the sharing of profits among an innovating pharmaceutical company, retailers, and parallel traders. We develop a structural model of demand and supply in which retailers can choose the set of goods to sell, thus foreclosing consumers' access to less profitable drugs. This allows retailers to bargain and obtain lower wholesale prices from the manufacturer and parallel trader. With detailed transaction data from Norway, we identify a demand model with unobserved choice sets using retail‐side conditions for optimal assortment decisions of pharmacies. We find that retailer incentives play a significant role in fostering parallel trade penetration and that banning parallel imports would benefit manufacturers as well as prevent pharmacies from foreclosing the manufacturer's product. Finally, in the case of the statin market in Norway, we show that it would be possible to decrease spending and increase profits of the original manufacturer through lump sum transfers associated with a lower reimbursement price, thus decreasing price differentiation across countries.

Russia - European Union: The continuation ofthe sanctions standoff

2017 ◽  
pp. 114-127
Author(s):  
M. Klinova ◽  
E. Sidorova
Keyword(s):  
European Union ◽  
Economic Recession ◽  
Economic Sanctions ◽  
Current Data ◽  
The State ◽  
The European Union ◽  
The Impact ◽  
The Eu ◽  
Year 2013

The article deals with economic sanctions and their impact on the state and prospects of the neighboring partner economies - the European Union (EU) and Russia. It provides comparisons of current data with that of the year 2013 (before sanctions) to demonstrate the impact of sanctions on both sides. Despite the fact that Russia remains the EU’s key partner, it came out of the first three partners of the EU. The current economic recession is caused by different reasons, not only by sanctions. Both the EU and Russia have internal problems, which the sanctions confrontation only exacerbates. The article emphasizes the need for a speedy restoration of cooperation.

Avrupa’ya Türk göçü: Almanya örneği

2014 ◽  
Vol 1 (1) ◽  
pp. 47-56
Author(s):  
Milan Palat
Keyword(s):  
Network Theory ◽  
Quantitative Methods ◽  
Positive Relationship ◽  
Time Lag ◽  
Theoretical Concept ◽  
Living Standards ◽  
The Other ◽  
The European Union ◽  
Effective Mechanism ◽  
The Eu

Bu çalışmanın amacı, Türkiye’den göç ve Almanya’nın ekonomik göstergeleri arasındaki ilişkiyi, nicel metot yöntemleri kullanarak değerlendirmektir. Türkiye’nin belirsiz Avrupa ile bütünleşme beklentilerine rağmen  Avrupa Birliğinin köklü üyelerine olan Türk göçü devam edecektir. Çok sayıda Türk azınlığın yaşadığı ve hayat standartlarının yüksek olduğu Almanya, Hollanda ve Fransa’ya  büyük bir göç dalgası gerçekleşebilir. Çalışmanın istatistiksel bölümünün sonuçları, toplam göç ile gayri safi yurtiçi hasıladaki büyüme arasında pozitif, toplam göç ile işsizlik arasındaki negatif ve tahmin edilen bağımlılık yönüyle uygunluk içerisinde olan toplam göç ile aylık gelir arasında pozitif ilişki olduğunu göstermektedir. Türkiye’den göçle işsizlik arasındaki ilişki, toplam göçle olan ilişkiden daha düşüktür. Ancak, Almanya’daki yabancı mevcudiyeti ile Türkiye’den göç arasında bir ilişki bulunmaktadır. Bu durum, var olan göçmen topluluğunun olduğu yerin, yeni göçmenleri, köken bağlarına dayanarak cezbetmesi ve maliyet- riskler sebebiyle göçün düşük seviye de olduğuna dayanan kuramsal Ağ teorisi görüşü ile uygunluk göstermektedir. Göç ve işsizlik arasında gözlenen ilişki, Almanya’ya göçün  işgücü piyasasında talepte meydana gelen değişime karşılık geldiği gerçeğini göstermektedir. İşsizlik ve göç olgularının meydana geliş zamanlarında bir aralık  olsa bile  göç, Alman emek pazarında var olan dengesizliklerin azaltılmasında nispeten etkili bir mekanizma gibi görünmektedir. ENGLISH TITLE & ABSTRACTTurkish Immigration to the European Union: The Case of GermanyThe objective of the paper was to evaluate the relationships between immigration from Turkey and economic indicators in Germany using  quantitative methods. Despite Turkey’s unclear European integration prospects, it is predicted that Turkish immigration to  established member countries of the EU will continue. The strongest waves may flow to Germany, Netherlands or France, where numerous Turkish minorities are already present and where the living standards are high. Results from the statistical analysis of the paper showed a positive correlation between immigration total and the growth of gross domestic product. On the other hand, a negative correlation of immigration total and unemployment was found and a positive relationship between immigration total and income total which is in agreement with the expected dependency direction. With regards to  immigration from Turkey it is less correlated to unemployment than immigration total. But there is a correlation between immigration from Turkey and the stock of foreigners in Germany This is in accordance with the theoretical concept of network theory where an existing community of migrants keeps attracting new migrants because the costs and risks associated with migration are lower, thanks to established linkages to the country of origin. The observed correlation of migration and unemployment points to the fact that immigration to Germany responds to changes in demand in the labour market. Even though a time lag may occur in the case of unemployment and immigration, migration appears to be a relatively effective mechanism to offset existing imbalances in German labour markets. 

European Integration

2020 ◽  
Author(s):  
Johann P. Arnason
Keyword(s):  
European Integration ◽  
Eastern European ◽  
The European Union ◽  
Historical Processes ◽  
History Of ◽  
External Conditions ◽  
Eastern European Countries ◽  
Totalitarian Regimes ◽  
The Eu

Different understandings of European integration, its background and present problems are represented in this book, but they share an emphasis on historical processes, geopolitical dynamics and regional diversity. The introduction surveys approaches to the question of European continuities and discontinuities, before going on to an overview of chapters. The following three contributions deal with long-term perspectives, including the question of Europe as a civilisational entity, the civilisational crisis of the twentieth century, marked by wars and totalitarian regimes, and a comparison of the European Union with the Habsburg Empire, with particular emphasis on similar crisis symptoms. The next three chapters discuss various aspects and contexts of the present crisis. Reflections on the Brexit controversy throw light on a longer history of intra-Union rivalry, enduring disputes and changing external conditions. An analysis of efforts to strengthen the EU’s legal and constitutional framework, and of resistances to them, highlights the unfinished agenda of integration. A closer look at the much-disputed Islamic presence in Europe suggests that an interdependent radicalization of Islamism and the European extreme right is a major factor in current political developments. Three concluding chapters adopt specific regional perspectives. Central and Eastern European countries, especially Poland, are following a path that leads to conflicts with dominant orientations of the EU, but this also raises questions about Europe’s future. The record of Scandinavian policies in relation to Europe exemplifies more general problems faced by peripheral regions. Finally, growing dissonances and divergences within the EU may strengthen the case for Eurasian perspectives.

DEVELOPMENT TRENDS AND PROSPECTS OF ECONOMIC AND TRADE COOPERATION BETWEEN CHINA AND UKRAINE

2018 ◽  
Vol 2018 (6) ◽  
pp. 3-12
Author(s):  
Zhang DONGYANG ◽  
Keyword(s):  
Free Trade ◽  
Bilateral Trade ◽  
The United States ◽  
Economic Cooperation ◽  
Free Trade Zone ◽  
Asia Pacific ◽  
Economic Downturn ◽  
The European Union ◽  
Association Agreement ◽  
The Eu

The status and prospects of development of trade and economic relations between Ukraine and China are considered. It is proved that bilateral cooperation in the trade and economic sphere has made significant progress. In 2012–2017, China was the second largest trading partner of Ukraine after Russia. However, the problem of imbalance in imports and exports between Ukraine and China has not yet been resolved. In addition, the scale and number of projects in which Ukraine attracts Chinese investment is much less than investments from European countries and the United States. It is justified that trade and economic cooperation between Ukraine and China is at a new historical stage. On the one hand, Ukraine signed the Association Agreement with the European Union, and on January 1, 2016, the rules of the free trade zone between Ukraine and the EU entered into force. This helps to accelerate the integration of Ukrainian economy into European one. On the other hand, the global economic downturn requires the introduction of innovations in the model of cooperation. The Chinese initiative “One belt is one way” is one of the variants of the innovation model of cooperation. Its significance is to unite the Asia-Pacific region with the EU in order to join the Eurasian Economic Union, create a new space and opportunities for development and achieve prosperity with the Eurasian countries. All this forms unprecedented opportunities for development of bilateral economic and trade relations. It seems that to fully open the potential of Ukrainian economy and expand bilateral trade and economic cooperation, it is necessary to take into account such proposals as the establishment of the Sino-Ukrainian industrial park, the promotion of cooperation in the field of electronic commerce, the formation of the Sino-Ukrainian free trade zone and enhanced interaction within multilateral mechanisms (for example, the Shanghai Cooperation Organization and the interaction of China and the countries of Central and Eastern Europe in the 16 + 1 format).

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