Parallel trade occurs when products are purchased in a country where they are cheaper and transported for resale to other countries where they are more expensive. The parallel traded medicine provides competition to the identical medicine sold by the manufacturer or its local licensee.
For parallel trade to be possible there must be
- Unrestricted free trade between the countries involved
- Substantial differences between the prices of identical goods in these countries
- The costs of transport in relation to the cost of goods must be low
- The distribution of goods must be entirely separate from their manufacture
All these conditions are found in the case of medicines inside the EEA.
In practice, the importers and the exporters are entrepreneurs at heart. The importers buy a medicine from the exporters who are well-established, authorised pharmaceutical wholesalers in countries where it is cheaper. With a specific authorisation from the government in the country of destination for the medicine, the importer can sell it to wholesalers or direct to pharmacies.
But still they will be able to undercut the price offered by the pharma company directly on certain medicines. The price advantage left must be passed on to the social health insurance system or national health service.
Importers do not manufacture any medicines themselves, but they have to change the labelling - and perhaps the packaging - in order to meet local requirements under strict government supervision and always according to national law. The original patient package inserts are replaced with others giving the same information in the local language.
The importing company does not deal directly with the public. All transactions are done through authorised trade channels. The pharmacist - who now effectively has the choice of where to buy the same medicine - dispenses it to the patient.
Parallel trade is extremely safe. Exporters and importers both apply internal supply chain controls and must meet stringent external regulatory checks to guarantee patient safety.
Parallel traders take pride in being reliable, responsible and professional business partners for wholesalers and for pharmacists in community and hospital practice.