Report: Parallel Trade in Pharmaceuticals: Past and future scenarios TOC

The concept of parallel importation
The view of pharmaceutical manufacturers
The view of parallel importers
Legalities of parallel trade
Exhaustion of intellectual property rights
Consumer views of intellectual property rights
Repackaging and re-labelling of products
The definition of price
Consumers and pricing
Therapeutic efficacy
Second-generation products and price increases
Influences on prices
Pricing strategies and parallel imports
- Skimming
- Prestige pricing
- Penetration pricing
- Extinction pricing
Pricing freedom
Pricing differentials
- Differentials created by price discounts
- Price differentials resulting from variations in pricing regulations
- Creation of post-patent price differentials
- Pricing within a single price band
Patents
Strategies to extend effective patent life
Cost containment and pharmaco-economics
Generic drugs
- Parallel importation of generics
Counterfeit products
Internet trading

The pharmaceutical industry and globalisation
Maximising revenue worldwide
The World Trade Organisation (WTO) and its objectives
- Organisation of the WTO
- The WTO philosophy
- The WTO’s viewpoint on intellectual property rights
Trade-related Aspects of Intellectual Property Rights (TRIPS)
Limitations of TRIPS and trade disputes
The WTO and the access-to-medicines issue
- Possibilities for international parallel trade
- The concept of international exhaustion
- The WTO and parallel imports
Exporting to the EU from outside Europe

Drug pricing in the US
The views of the US pharmaceutical industry
- US political debates over pricing and parallel importation
Canada
Mexico
Kenya and parallel trade
Philippines
US reaction to developments in the Philippines
Singapore
Discounted drugs in Taiwan
Japan
New Zealand
Australia
India
The concept of compulsory licensing
The grounds for using a compulsory licence
The AIDS crisis
- HIV drug pricing becomes an issue
South Africa and HIV drug pricing
Brazil and HIV drug pricing
Future implications of compulsory licensing
- Compulsory licensing in North America
- Compulsory licensing, parallel importation and unscrupulous traders

Pharmaceutical R&D investment and parallel trade
Innovation and new drug development
Why intellectual property matters to pharmaceutical companies
- Consumer views
Tax benefits on pharmaceutical R&D
Parallel traders and pharmaceutical R&D ‘mythsE
Better management of R&D investment
An economic viewpoint on parallel trade issues
- Market structure
- Demand elasticity
- Pricing regulations
- Competition policies
Using parallel importation as a negotiation tool
The process of parallel importation
How to bring parallel imports to market
The effect of parallel trade channels
Defensive measures for parallel trade
Conclusions

Figure 1.1 Fundamental reasons for parallel trade in the EU
Figure 1.2 Breakdown of retail medicine price in Europe, 2000
Figure 1.3 The global price corridor
Figure 1.4 Estimates of annual cost of CHF treatment with ACE-inhibitors, 2000
Figure 1.5 Average approval time for generic drugs according to the FDA
Figure 1.6 Estimated European generics market by volume, 2000
Figure 2.1 Breakdown of European pharmaceutical R&D
Figure 2.2 Cost-containment strategies: price controls
Figure 2.3 Cost-containment strategies: spending controls
Figure 2.4 Cost-containment strategies: volume controls
Figure 2.5 Informedica pricing analyses, 1998/99: Neoral treatment costs
Figure 2.6 Informedica pricing analyses, 1998/99: AmBisome treatment costs
Figure 2.7 Share of pharmaceutical parallel imports by value
Figure 2.8 Share of parallel imports in total European pharmaceutical market sales (industry estimates, 2001)
Figure 2.9 Parallel importation of Norvir, 1999
Figure 2.10 Parallel importation of Epivir, 1999
Figure 2.11 Parallel importation of Retrovir, 1999
Figure 2.12 HIV drug prices, 1999
Figure 4.1 Market share of parallel imports in Germany
Figure 4.2 Factors influencing the future of parallel trade in Europe

Table 1.1 Price variations in the EU (public prices in euros)
Table 1.2 Some parallel imports options offered to European hospitals in 1997
Table 1.3 Types of prescription drugs
Table 2.1 Market share of parallel imports in key European markets in selected years
Table 2.2 Estimated penetration of parallel imports (%) in main importing states, 1999
Table 2.3 Summary of pharmaceutical company options to counter parallel importing
Table 2.4 Summary of what is permissible and not permissible for parallel importers repackaging an original manufacturer’s products in the EU
Table 2.5 Summary of key European pharmaceutical parallel trade cases
Table 4.1 Summary of parallel trade in the UK, 1997 and 2001