The Problem of Availability of Patented Drugs Due to Product Patent and Parallel Trade: A Theoretical Approach

Mainak Mazumdar ()
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Mainak Mazumdar: Centre De Sciences Humaines (CSH)

Chapter Chapter 7 in Performance of Pharmaceutical Companies in India, 2013, pp 145-167 from Springer

Abstract: Abstract This chapter examines the effect of the Patent Act on the availability of an essential drug in developing countries. Price discrimination by a Multinational Corporation (MNC) alleviates the problem of non-availability of the drug in a developing country compared to a uniform pricing strategy. Incorporating an upstream-downstream structure, we show that in the presence of parallel trade the MNC can earn a higher profit by serving both the developed and developing countries than by confining its operations in the developed country. Also allowing parallel trade instead of restraining it results in a higher profit to the MNC.

Keywords: Wholesale Price; Retail Price; Price Discrimination; Intellectual Property Right; Uniform Price (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-7908-2876-4_7

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DOI: 10.1007/978-3-7908-2876-4_7

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