The Effects of Parallel Trade on Affordable Access to Medicines
(2009; 5 pages)


A stylised demand curve for patented medicines in the EU was constructed and the price and availability of medicines were predicted by comparing the situation in which prices converge with differentiated prices.

Parallel trade causes prices of patented medicines to converge. A single EU price would reduce both the numbers of patients with affordable access to patented medicines and profits by about 25% compared to optimally differentiated prices.

The best option from the point of view of health care policy would be to prohibit the repackaging of medicines and require traceability throughout the supply chain.

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