But it's possible that drug makers could act before the FDA in tamping down on the gray markets, motivated by both political and economic interests.
This contractual, self-regulatory response to gray markets would ensure that ethical drugs in short supply are not price "churned" through the gray market distribution chain, but instead result in higher revenues for the manufacturers while ensuring the integrity and safety of the ethical drug supply chain and avoiding fallout from "price gouging" accusations against the gray markets.
In addition to problems stemming from inability to support products sold in gray markets, another problem stems from the type of product information (repackaging) that occurs in the resale of the good, which can affect the consumers' perception of the branded product [Chaudhry and Walsh 1995].
The arbitrage function of gray markets may thus have a direct, adverse impact on their earnings.
The note then focuses on the domestic gray market
by considering our country's current drug shortage and the ways in which gray good pharmaceuticals' presence heightens its implications for health and safety.
A contractual approach to the gray market
. International Review of Law and Economics, 19(1), 1-21.
Strategies to counter gray markets
available to the product originators and their distributors may be classified as either reactive or proactive.
A number of retailers and retail trade associations, including Amazon.com, eBay, Target stores, and the Entertainment Merchants Association, also support Costco's position and focus on the global marketplace (including the gray market
) for authentic copyrighted works.
In the NAFTA countries, gray markets
were found in a wide variety of manufacturing industries (Table 1, Column 3).
Copyright was also a questionable legal issue in the gray market
The Alliance for Gray Market
and Counterfeit Abatement, an initiative composed of technology companies, reports that "over $40 billion in legitimate IT products move through the gray market
channel each year, resulting in $5 billion in lost profits annually to IT manufacturers."
The gray market
does not have to pay advertising expenses, but enjoys the effects of the promotion, therefore, a situation of unfair competition exists.