parallel importing


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parallel importing

the practice whereby independent importers buy a particular manufacturer's product from a low-priced market source and sell it in direct competition with the manufacturer's appointed distributors in the local market, usually at a lower price. Parallel importing has been prominent in the European Union where differences between member countries' price levels, along with manufacturers' practices of granting lucrative EXCLUSIVE DEALING rights to selected local distributors, have created profitable segments for independents to exploit.

Parallel importing is seen as beneficial by advocates of FREE TRADE and COMPETITION POLICY as it breaks down barriers to INTERNATIONAL TRADE and PRICE DISCRIMINATION between markets, leading to a greater harmonization of international price levels. See IMPORTING.

parallel importing

a form of ARBITRAGE whereby an independent importer buys a particular supplier's product at a low price in one country and resells it in direct competition with the supplier's appointed distributors in another national market where prices are higher.

Parallel importing helps promote FREE TRADE and competition by breaking down barriers to INTERNATIONAL TRADE and undermines PRICE DISCRIMINATION between markets by suppliers. See IMPORT.

References in periodicals archive ?
The retailers website also contains an explanation of the concept of parallel importing and how it leads to cheaper prices for consumers.
Telser (1990) argued that the parallel importing is characterized by a free-rider problem.
5 million in direct savings due to parallel importing of drugs in 2004.
234) However, as the High Court noted, contract law could be used to prevent buyers or distributors from parallel importing the copyright owners goods,(235) similar to the Japanese Supreme Court's recent holding in the Aluminum Wheels case.
But in fact, the Trade-Related Intellectual Property Rights (TRIPS) agreement, supervised by the World Trade Organization, allows both parallel importing and compulsory licensing by countries faced with a national emergency.
That means the United States should not interfere in developing countries' efforts to use compulsory licensing or parallel importing to gain access to vital drugs, period.
In 1997, South Africa adopted a Medicines Act that empowered the government to undertake both parallel importing and compulsory licensing policies, though the government's initial purpose was only to authorize parallel importing.
Parallel importing consists of purchasing the brand-name drugs from a third party in another country rather than directly from the manufacturer--taking advantage of the fact that drug companies sometimes charge significantly lower prices in one country than in another.
The gray market, also known as parallel importing, exists because suppliers sometimes opt to sell products at significant discounts overseas in order to clear excess inventory or build market share, while attempting to maintain significantly higher prices and profit margins in this country.
Parallel importing of a medicinal product is still possible even when the authorisation for the reference product has been withdrawn and the parallel import licence may not be revoked unless such a measure is justified by reasons relating to the protection of public health, the Commission says.

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