The Problem of Availability of Patented Drugs Due to Product Patent and Parallel Trade: A Theoretical Approach

  • Mainak Mazumdar
Part of the Contributions to Economics book series (CE)


This chapter examines the effect of the Patent Act on the availability of an essential drug in developing countries. Price discrimination by a Multinational Corporation (MNC) alleviates the problem of non-availability of the drug in a developing country compared to a uniform pricing strategy. Incorporating an upstream-downstream structure, we show that in the presence of parallel trade the MNC can earn a higher profit by serving both the developed and developing countries than by confining its operations in the developed country. Also allowing parallel trade instead of restraining it results in a higher profit to the MNC.


Wholesale Price Retail Price Price Discrimination Intellectual Property Right Uniform Price 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Centre De Sciences Humaines (CSH)New DelhiIndia

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