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Laura Birg
''Externalities of Wholesale Level Regulation under Pharmaceutical Parallel Trade''
( 2017, Vol. 37 No.3 )
This paper studies the effect of pharmaceutical regulation at the wholesale level under parallel trade, i.e. trade outside the manufacturer's authorized distribution channel. In a symmetric equilibrium, both maximum wholesale margins (restriction of pricing by the intermediary) and manufacturer discounts (restriction of the pricing by the manufacturer) decrease the drug price in the respective country. Instruments differ in their effect on the other country: Whereas maximum wholesale margins increase the drug price in the other country, manufacturer discounts may decrease it.
Keywords: parallel trade, pharmaceutical regulation, externalities
JEL: F1 - Trade: General
I1 - Health: General
Manuscript Received : Mar 18 2016 Manuscript Accepted : Sep 27 2017

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