Pricing and Welfare Implications of Parallel Imports in the Pharmaceutical Industry

Izabela Jelovac and Catalina Bordoy
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Catalina Bordoy: MERIT - Maastricht University [Maastricht]

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Abstract: In this paper we investigate the implications of permitting parallel imports of pharmaceuticals produced by a monopoly, from one country to another. We use a model where countries differ in the patients' level of co-payment for buying pharmaceuticals, and patients differ in the utility obtained from the consumption of pharmaceuticals. We show that the effects of parallel imports on total welfare are as follows: On the one hand, when countries differ in their health system only, parallel imports decrease total welfare; On the other hand, when countries differ in the health needs of their patients only, parallel imports enhance total welfare.

Keywords: Parallel Imports; Welfare (search for similar items in EconPapers)
Date: 2005
Note: View the original document on HAL open archive server: https://hal.science/hal-03881154v2
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Published in International Journal of Health Care Finance and Economics, 2005, 5 (1), pp.5-21. ⟨10.1007/s10754-005-6599-x⟩

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Journal Article: Pricing and Welfare Implications of Parallel Imports in the Pharmaceutical Industry (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03881154

DOI: 10.1007/s10754-005-6599-x

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