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Parallel imports and manufacturer rebates: Evidence from Germany

Laura Birg

No 363, Center for European, Governance and Economic Development Research Discussion Papers from University of Goettingen, Department of Economics

Abstract: In this paper, I study the effect of a change in the mandatory manufacturer rebate on wholesale prices for pharmaceuticals on competition by parallel imports. First, I analyze the effect of a manufacturer rebate on competition by parallel imports in a two-country model. An increase in the manufacturer rebate increases the market share of parallel imports. Second, I exploit a policy reform in Germany in 2010 that increased the manufacturer rebate by 10 percentage points. Using a data set with prescription drugs with competition from parallel imports, I estimate the effect of the change in the manufacturer rebate on competition by parallel imports. Estimation results suggest that an increase in the manufacturer rebate has increased the market share of parallel imports.

Keywords: parallel imports; manufacturer rebate; pharmaceuticals; regulation (search for similar items in EconPapers)
JEL-codes: F12 I11 I18 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:363

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