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EU Enlargement, Parallel Trade and Price Competition in Pharmaceuticals: has the Price Competition increased?
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0003-4467-8676
2016 (English)In: The B.E. Journals in Economic Analysis & Policy, ISSN 1935-1682, E-ISSN 1935-1682, Vol. 16, no 2, 1069-1092 p.Article in journal (Other academic) Published
Abstract [en]

Given the cost of trade and availability of pharmaceuticals, the driving force for parallel trade is the price difference between the source (exporting) and the destination (importing) country. An increase in the price difference or in the availability of pharmaceuticals for parallel trade should increase price competition in the destination country. Using 2003-2007 data from Sweden we investigated whether EU enlargement in 2004, when new countries with low pharmaceutical prices joined the EU, increased competition from parallel imports. Drugs facing competition from parallel imports are found to have on average 17% to 21% lower prices than they would have had if they had never faced such competition. But, contrary to expectation, EU enlargement is not found to have increased this effect, which might be explained by derogations and changes in consumer perceptions of parallel imports.

Place, publisher, year, edition, pages
2016. Vol. 16, no 2, 1069-1092 p.
Keyword [en]
EU enlargement, parallel trade, pharmaceuticals, price competition
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Research subject
URN: urn:nbn:se:umu:diva-47482DOI: 10.1515/bejeap-2015-0127ISI: 000374560600017OAI: diva2:442531
Swedish Competition Authority
Available from: 2011-09-21 Created: 2011-09-21 Last updated: 2016-06-20Bibliographically approved

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