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The Problem of Availability of Patented Drugs Due to Product Patent and Parallel Trade: A Theoretical Approach

In: Performance of Pharmaceutical Companies in India

Author

Listed:
  • Mainak Mazumdar

    (Centre De Sciences Humaines (CSH))

Abstract

This chapter examines the effect of the Patent Act on the availability of an essential drug in developing countries. Price discrimination by a Multinational Corporation (MNC) alleviates the problem of non-availability of the drug in a developing country compared to a uniform pricing strategy. Incorporating an upstream-downstream structure, we show that in the presence of parallel trade the MNC can earn a higher profit by serving both the developed and developing countries than by confining its operations in the developed country. Also allowing parallel trade instead of restraining it results in a higher profit to the MNC.

Suggested Citation

  • Mainak Mazumdar, 2013. "The Problem of Availability of Patented Drugs Due to Product Patent and Parallel Trade: A Theoretical Approach," Contributions to Economics, in: Performance of Pharmaceutical Companies in India, edition 127, chapter 0, pages 145-167, Springer.
  • Handle: RePEc:spr:conchp:978-3-7908-2876-4_7
    DOI: 10.1007/978-3-7908-2876-4_7
    as

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