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Commission looking at arbitrage trade in pharmaceuticals

By  |  May 23, 2012

Blaz Visnar of the European Commission has told a conference that the Commission has started an investigation into whether pharmaceutical companies are blocking drug arbitrage between Member states. The practice, known as parallel trade, describes the market in which wholesalers buy medicine in countries where the state sets the price, and then resells the medicine in countries where they are sold for higher prices. Pharmaceutical companies, notably GlaxoSmithKline in 2008, argued that parallel trade calls for drug manufacturers to practice price discrimination or a system of dual pricing.

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    Related content: Price Discrimination and Welfare (Barry Nalebuff, Yale)

     

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