Is Medicines Parallel Trade ‘Regulatory Arbitrage’?

Joan Costa-i-Font

No 5190, CESifo Working Paper Series from CESifo

Abstract: We hypothesize that parallel trade of heavily regulated medicines is a form of ‘regulatory arbitrage’ that does not necessarily produce equivalent welfare effects as more ‘common’ forms of arbitrage. This paper empirically documents the latter hypothesis drawing upon a unique dataset that contains source country records of parallel imported medicines to the Netherlands. Hence, it allows estimating precise price differences with each source country/product. The data is from one therapeutic group (statins) that accounts for 5% of the market at the time of study and it faced no generic competition. Hence allows identifying a clean effect of PT determinants. Our findings reveal that parallel imports flows are determined by medicines distribution chain regulation, in addition to product price differences in line with the hypothesis of ‘regulatory arbitrage’.

Keywords: parallel trade; parallel imports; regulatory arbitrage; pharmaceuticals; supply chain (search for similar items in EconPapers)
JEL-codes: I18 L51 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp5190.pdf (application/pdf)

Related works:
Working Paper: Is medicines parallel trade ‘regulatory arbitrage’? (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5190

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().