Konferenzbeitrag
The welfare impact of parallel imports: A structural approach applied to the German market for oral antidiabetics
We investigate the welfare impact of parallel imports using a large panel data set containing monthly information on sales, ex-factory prices, and further product characteristics for all 700 antidiabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand and, based on an oligopolistic model of multi-product firms, we then recover the marginal costs and mark-ups. We finally evaluate the effect of the parallel imports' policy by calculating a counter-factual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented and generic drugs by 39% and 0.05%, respectively. This amounts to an increase in the demand-side surplus by 11.4 million per year which is relatively small compared to the market size of around 470million. Manufacturers of original drugs, instead, lose more than half of their variable profits when parallel trade is allowed and only a small fraction of these rents are appropriated by the parallel importers.
- Language
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Englisch
- Bibliographic citation
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Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Industrial Organization II ; No. B11-V4
- Classification
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Wirtschaft
Analysis of Health Care Markets
Health: Government Policy; Regulation; Public Health
Oligopoly and Other Imperfect Markets
- Event
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Geistige Schöpfung
- (who)
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Suppliet, Moritz
Duso, Tomaso
Herr, Annika
- Event
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Veröffentlichung
- (who)
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
- (where)
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Kiel und Hamburg
- (when)
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2014
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Konferenzbeitrag
Associated
- Suppliet, Moritz
- Duso, Tomaso
- Herr, Annika
- ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Time of origin
- 2014
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The welfare impact of parallel imports: A structural approach applied to the German market for oral anti-diabetics
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On the politics of the regulatory reform: econometric evidence from the OECD countries
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Endogenous switching costs and the incentive for high quality entry
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Viessmann-Verkauf wird die deutsche Wärmewende beschleunigen
Insolvenz von Air Berlin: Die letzte Hoffnung liegt bei den Wettbewerbsbehörden
The welfare impact of parallel imports: A structural approach applied to the German market for oral anti-diabetics
The welfare impact of parallel imports: A structural approach applied to the German market for oral anti-diabetics
On the politics of the regulatory reform: econometric evidence from the OECD countries
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Endogenous switching costs and the incentive for high quality entry
Endogenous switching costs and the incentive for high quality entry
Who decides to regulate? Lobbying activity in the US cellular industry
Who decides to regulate? Lobbying activity in the U.S. cellular industry
Lobbying and regulation in a political economy: evidence from the US cellular industry
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Viessmann-Verkauf wird die deutsche Wärmewende beschleunigen