Parallel Imports Research Articles

Parallel imports, price controls, and innovation

The impact of parallel trade on innovation in R&D-intensive industries, such as pharmaceuticals, is a hotly debated question in antitrust and IP policy. The well-known argument that parallel trade dampens innovation by undermining firms’ ability to price discriminate has been challenged by recent literature. The argument is that with endogenous price controls, parallel trade increases innovation by reducing governments’ incentives to set particularly low price caps. In this paper, we show that this result crucially depends on the degree of homogeneity of the trading countries. The result only holds if consumers in poorer countries have a relatively similar demand for medication as consumers in richer countries. Instead, when countries are relatively heterogeneous, parallel trade dampens innovation and lowers welfare by exporting price cap regulation from poorer to richer countries. These findings are in line with recent case evidence. We also show that when patent length is endogenous, richer countries will tend to choose longer patent protection with parallel trade, whereas equilibrium price caps tend to be tighter in that case.

Can a Parallel Importer Rebrand Pharmaceutical Products in the EU?

Abstract The European Union has established the free movement of goods, which covers the parallel import of goods in the EU. However, the free movement of goods should not infringe on the rights of trade mark owners. In some cases, parallel importer needs not only to repackage but also to rebrand pharmaceutical products. ECJ has stated that rebranding is permissible if objective necessity to rebrand exists. But it is the national court that has to determine what objective necessity is. This paper analyses the decisions of EU Member States. In some cases, objective necessity has been determined on similar grounds. However, in other cases, a necessity to enter some part of the market has been evaluated differently in different Member States. The different evaluation of the necessity criterion could be treated as the infringement of uniform application of the free movement of goods in the EU.

SOFOSBUVIR: TREATMENT OF CHRONIC HEPATITIS C AND THE MAIN TRENDS IN PATENT PROTECTION

The purpose of the study was to analyze and systematize the literature data on the benefit/risk ratio of sofosbuvir administration in the treatment of patients with chronic hepatitis C and the main trends in its patent protection. Studies were conducted using databases on the Internet: Ukrainian patent office, the European patent office, the US patent office, the Food and drug administration, European Medicines Agency (EMEA), State enterprise “The State Expert Center” of the Ministry of Health of Ukraine. It has used retrospective, logical, systematic and analytical methods. Data from clinical studies abroad and meta-analyses indicate that sofosbuvir is one of the most promising drugs for the treatment of chronic HCV infection. Its indisputable advantages are that this drug can be used with different genotypes of the virus, decompensated liver function, it is well tolerated. Sofosbuvir has an improved safety profile and a low probability of viral resistance. The high cost of sofosbuvir is due to the powerful patent protection. As mechanisms for working with patent barriers, it is recommended to use the flexible mechanisms of the TRIPS Agreement: the grant of compulsory licenses, the implementation of parallel imports, the tightening of the criteria for patentability (prohibition of patenting new forms that do not improve therapeutic efficacy).

Price Caps versus Reimbursement Limits: Pharmaceutical Regulation under Market Integration through Parallel Trade

In this paper, I study the effect of parallel trade (cross border resale of goods without the authorization of the manufacturer) on pharmaceutical regulation in a North-South framework with a firms endogenous decision to export to the South. Governments in both countries may limit prices directly via price caps or restrict third-party payer reimbursement for the drug via reimbursement limits. Parallel trade may relax regulation in the source country of parallel imports (South) and intensify regulation in the destination country (North): In the source country, parallel trade may relax regulation both under a price cap and a reimbursement limit under certain conditions. In the destination country, parallel trade has no effect on the level of regulation under a price cap, and it intensies regulation under a reimbursement limit. Parallel trade may change regulatory preferences: Under no parallel trade, both the source and destination country set prices caps. Under parallel trade, the source country sets a price cap, but the destination country sets a reimbursement, thereby enforcing a higher price cap in the South. This implies higher drug prices under parallel trade in both source and destination country.

Synthesis, Functionalization, and Characterization of Fusogenic Porous Silicon Nanoparticles for Oligonucleotide Delivery.

With the advent of gene therapy, the development of an effective in vivo nucleotide-payload delivery system has become of parallel import. Fusogenic porous silicon nanoparticles (F-pSiNPs) have recently demonstrated high in vivo gene silencing efficacy due to its high oligonucleotide loading capacity and unique cellular uptake pathway that avoids endocytosis. The synthesis of F-pSiNPs is a multi-step process that includes: (1) loading and sealing of oligonucleotide payloads in the silicon pores; (2) simultaneous coating and sizing of fusogenic lipids around the porous silicon cores; and (3) conjugation of targeting peptides and washing to remove excess oligonucleotide, silicon debris, and peptide. The particle's size uniformity is characterized by dynamic light scattering, and its core-shell structure may be verified by transmission electron microscopy. The fusogenic uptake is validated by loading a lipophilic dye, 1,1'-dioctadecyl-3,3,3',3'-tetramethylindocarbocyanine perchlorate (DiI), into the fusogenic lipid bilayer and treating it to cells in vitro to observe for plasma membrane staining versus endocytic localizations. The targeting and in vivo gene silencing efficacies were previously quantified in a mouse model of Staphylococcus aureus pneumonia, in which the targeting peptide is expected to help the F-pSiNPs to home to the site of infection. Beyond its application in S. aureus infection, the F-pSiNP system may be used to deliver any oligonucleotide for gene therapy of a wide range of diseases, including viral infections, cancer, and autoimmune diseases.

Historical overview of regulatory framework development on pricing and reimbursement of medicines in Bulgaria

ABSTRACTObjectives: The current study aims to analyze, from a historical perspective, the regulatory framework of prices and reimbursement in Bulgaria with emphasis on the introduction of economic evaluation.Methods: The study explores all regulatory changes during the period 1995–2016 combining the macroeconomic and regulatory analysis on medicines pricing and reimbursement. A roadmap summarizing the current regulatory requirements for the medicinal product entrance on national market and access to public funding was elaborated.Results: Demographic processes in the country have been negative for the past decade. On the other hand, health care and pharmaceutical expenditures experienced a growth up to 8.6% and 3% of total GDP, respectively. The total pharmaceutical market permanently grew from 309 to 1409 million of Euro. During the last 20 years, the pricing and reimbursement legislation of medicines in Bulgaria was changed extensively.Conclusion: Pricing policy remains oriented toward the lowest European prices and reimbursement policy impose cost containment measures. Appraisal of the obligatory Health Technology Assessment Dossiers and pharmacoeconomic analysis is in accordance with world recommendations. Main regulatory issues that still remain to be tackled are the slower entrance of medicines on the national market and lower national prices that often lead to parallel import.

Parallel Imports, Price Controls, and Innovation

The impact of parallel trade on innovation in R&D-intensive industries, such as pharmaceuticals, is a hotly debated question in antitrust and IP policy. The well known argument that parallel trade dampens innovation by undermining firms’ ability to price discriminate has been challenged by recent literature. The argument is that with endogenous price controls, parallel trade increases innovation by reducing governments’ incentives to set particularly low price caps. In this paper, we show that this result crucially depends on the degree of homogeneity of the trading countries. The result only holds if consumers in poorer countries have a relatively similar demand for medication as consumers in richer countries. Instead, when countries are relatively heterogeneous, parallel trade dampens innovation and lowers welfare by exporting price cap regulation from poorer to richer countries. These findings are in line with recent case evidence. We also show that when patent length is endogenous, richer countries will tend to choose longer patent protection with parallel trade,whereas equilibrium price caps tend to be tighter in that case.

The Committee on International Trade Law of The International Law Society on The Topic of Parallel Importation Using the GRA method

The Committee on International Trade Law of The International Law Society on The Topic of Parallel Importation Using the GRA method

Impact of Parallel Imports on Pricing and Product Launch Decisions in Pharmaceutical Industry

Product launch and pricing decisions in the pharmaceutical industry across different countries are complex. Although introducing a newly developed drug to every country is beneficial to patients worldwide, doing so may have adverse implications for drug developers, such as the emergence of parallel imports. We study a pharmaceutical firm that already introduced a pioneering drug in its home country, where the product is protected by patent rules. The firm decides whether to launch in a second country in the same region, where parallel import between these two countries is feasible and profitable for the parallel importer. We characterize the joint pricing and product launch decision. We show the firm chooses one of three strategies: (i) launch and accommodate parallel import, (ii) launch and deter parallel import, and (iii) not launch. We show that firms are more likely not to launch the drug when the drug price is determined through a negotiation between the firm and the government. We discuss how insurance coverage, market size, quality perception of the parallel imported drug, and valuations affect these strategies. We then study the impact of launch and pricing decisions on social welfare and discuss policy implications for the regulators and potential strategies for the firm to mitigate the negative effects of a parallel import threat. We also study the impact of perfect and imperfect competition among parallel import firms on firm's price and launch decisions. Finally, we discuss the practice of distributing rebates as a post‐launch strategy to manage parallel imports.

DANSAC A/S v SALTS HEALTHCARE LTD

Abstract H1 Trade marks – Infringement – Parallel imports – Medical devices – Ostomy bags – Strike out application – Sale in original unopened boxes – Some boxes re-labelled – Whether the BMS conditions applied – Whether any risk to guarantee of origin – “Legitimate reasons” for opposing further dealings – Whether breach of Medical Devices Regulations of itself sufficient – Whether likelihood of damage or serious damage necessary

Localization Investment and Opportunities for Legalization of Parallel Import in Russia

In this paper, we present an analysis of foreign trademark-owning companies’ capital investment in localization in the territory of Russia under the conditions of national (regional) exhaustion of intellectual property rights. The purpose of this research is to estimate the impact of the choice of the regime of right exhaustion on the decision on localization in Russia, as well as the structure of production assets of trademark owners in Russia. Data for analysis contains trademark owners’ production capacities and investments in the territory of Russia for the period from 1991 to 2016. We present an estimate of the volume of trademark owners’ localization on the territory of Russia by sector, territory and time of capital investments. The paper shows that investments in production by trademark owners are not correlated to the ban on parallel import and are more likely explained by other factors than the introduction of national exhaustion of intellectual property rights. Also, upon comparison of data on the volumes of localization of trademark owners and import statistics for protected trademarks, it was revealed that a significant proportion of trademark owners, which gain a benefit from the ban of parallel import, did not invest in production in Russia. The research results are useful for the government intellectual property policy, especially, in deciding on parallel import legalization and developing measures for the transition to international exhaustion of intellectual property rights.

Parallel Imports and Manufacturer Rebates: Evidence from Germany

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.

Параллельный импорт в России: области защиты, риска, потенциала

В 2014 г. Федеральная антимонопольная служба РФ предложила ввести международный принцип исчерпания прав на товарные знаки в России (легализовать параллельный импорт брендированной продукции) поэтапно для отдельных групп товаров. При этом критерии выбора товарных групп для первоочередного изменения режима импорта не были сформулированы. Авторы статьи попытались с учетом существующего опыта оценки эффектов параллельного импорта сформулировать критерии отбора товарных категорий для легализации параллельного импорта в первую очередь. Товарные группы выделялись на основе анализа состава «защищенных» товарных знаков (внесенных в ТРОИС), внешнеторговых потоков брендированной продукции и объемов инвестиций правообладателей в России.

Reference Pricing and Parallel Imports: Evidence from Germany

I study the effect of reference pricing on competition by parallel imports, in particular the market share of parallel imports and the number of parallel traders. First, I analyze the effect of reference pricing on competition by parallel imports in a vertical differentiation model with a locally sourced version and a parallel import offered by n identical parallel traders. Second, I explore the effect of reference pricing on competition by parallel imports using a dataset with prescription drugs with competition from parallel imports. Both model and estimation results suggest that the introduction of reference pricing inrceases the market share of the parallel import and the number of parallel traders, while a decrease in the reference price decreases the market share of the parallel import and the number of parallel traders.

CJEU Case C-387/18: Parallel Imports Shall not be Precluded on the Basis of a National Law Requirement for Identical ‘Registration Category’

CJEU Case C-387/18: Parallel Imports Shall not be Precluded on the Basis of a National Law Requirement for Identical ‘Registration Category’

从药品平行进口案例看中国法的正义价值选择

从药品平行进口案例看中国法的正义价值选择

Italian court rules that a parallel importer is not entitled to replace the original trade mark affixed on drugs unless objectively necessary

Regional Administrative Court of Latium, Judgment of 29 August 2018 No 9050/2018, Medifarm Srl v Menarini International Operations Luxembourg SA In an appeal against a decision of the Italian Medicines Agency, which had authorized a parallel importer to import a drug from France into Italy under the same trade mark used by the drug generator in the country of origin, the Regional Administrative Court of Latium ruled that a parallel importer cannot replace the original mark with the different sign affixed on the drugs in the importing Member States, unless the replacement is objectively necessary for the products to be marketable or to prevent the likelihood of confusion for public health.

PRICE LINKAGES AMONG EMERGING GOLD FUTURES MARKETS

The gold futures in emerging markets have gained more importance in parallel to the increase in the size of gold trading in these markets. This research aims to detect the long-run price linkages and causality effects in these markets. China, Brazil, Russia, India, Korea, Taiwan, Turkey and Indonesia have been selected to represent emerging markets. US and Japan are also included as benchmark markets. The results denote the existence of long-term price dependencies and limited risk diversification benefits in the sample countries. The results further signify that China and Russia are the most isolated countries among the emerging markets sample.

Parallel Imports: The Court of Justice of the EU Rules That Debranding and Rebranding of Imported Products While Stored in Customs Warehouse Constitutes Trade Mark Infringement

Clarifying what was a controversial point of law, in Mitsubishi v Duma the Court of Justice of the European Union hold that a parallel importer that, without the consent of the proprietor, removes from products placed in the custom warehouse the original trademark affixed by the manufacturer and replace them with its own signs with the intention to put the goods for the first time in the EEA markets infringes the trademark rights of the manufacturer. This judgment is expected to reinforce the position of trademark proprietors allowing them to enforce their trademark rights even when before the trademarked goods are effectively marketed in the EEA and when no use of such mark exists.

Competitive strategies and quality to counter parallel importation in global market

When selling products globally in geographically separated markets with price discrimination, manufacturers often have to compete with parallel importers (PIs) who sell “gray products,” purchasing the manufacturers’ authorized products in low-price markets and reselling them in high-price markets. In this paper, we show that manufacturers can use ex ante quality design along with distribution strategies to mitigate the negative impacts of parallel importation. We develop game-theoretic models for a supply chain with a manufacturer and a PI, in which the manufacturer needs to determine distribution structure (either selling through high-price market exclusively, or selling through two channels), product quality, and retail prices. If a dual-channel structure is selected, the manufacturer also should decide the channel opening time in the low-price market, either early or late. Our results suggest that (1) the manufacturer should strategically choose a lower quality level when designing its product to weaken the PI's competitiveness; (2) the manufacturer's optimal distribution strategy is determined by the gap between customers’ willingness to pay (WTP) in the two markets and the customer's tolerance for late consumption; and (3) parallel importation hurts the customer surplus (CS) and social welfare (SW) in the low-price market, and benefits CS and SW in the high-price market when the two markets are moderately balanced. We then consider several important extensions to provide additional insights. Firstly, we show that the appropriate marketing investment in the low market can effectively counter the PI. Secondly, we examine the impact of multiple competing PIs on the manufacturer's decisions, including distribution strategy, quality design, prices, and profit. Lastly, we find that the advertising effect may motivate the manufacturer to improve product quality and benefit both the manufacturer and PI if the effect is relatively strong.