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Disruptive effect of Parallel Trade on the global pharma industry

Updated: May 19, 2020

OGP - (Optimal Global Pricing) can mitigate all the problems caused by parallel trade

From the study of five medicines, seven European countries panel

- Parallel trade is appropriating $2,427,583,377.53 from pharma companies - capital that pharma needs for R&D

- Deprives global patients of $865,664,157.94 of their incomes


Generates medicine shortages / crises in low priced markets

- Romania: -58.18%

- Greece: - 35.26%

- Portugal: - 27.48%

- Spain: - 27.95%

Low priced markets are continually experiencing medicine shortages / crises mainly due to parallel trade. Pharma companies are increasing their prices to keep up with the increasing R&D expenses of $1.2 billion on average giving even more business to parallel traders. Global patients do not see any of the benefit generated by parallel trade as most if not all of it is going to parallel traders at excessively high profit rates. Also, as a side effect of parallel trade, there is now a flourishing industry of counterfeit medicines.

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