Parallel Import: Is It Worth?

One of the most important duties of government in public health sector is to provide secured sources for medicines supply. There are some regulations for domestic pharmaceutical industry. In addition, there is a discipline for importing medicine to be ensured about their claimed characteristics. In medicines registration process, MOH (FDO in Iran) assess ‘safety’, ‘quality’ and ‘efficacy’ of medicines and they will be registered if they’ll be able to pass the assessment. Some countries establish ‘costeffectiveness’ as fourth hurdle in registration process of medicines. It means that at first authorities must be ensured about safety, quality and efficacy of medicines. In Iran, there are two main importing forms of medicines. One is by agents, who registered the medicines and have responsibility for them. Agents should trace medicines from buying stage to shipment, delivering and distributing by wholesalers and selling by pharmacies. In addition, they are responsible for safety, quality and efficacy and pharmacovigilance of medicines. Two is by importers (Emergency companies). The main activity of them is supply those medicines which FDO announced as shortages. They could import medicines from registered wholesalers in confirmed countries based on its specific regulation. In this form of import, FDO rely on confirmed countries’ regulations to ensure about safety, quality and efficacy of required medicines. On the other hand, people ability to pay and financial constrain push governments to focus on the ways which help them to supply drugs in lowest price with respect to those hurdles. Pricing is one of the tools that FDO use in order to decrease and control cost of medicines. Mechanism of pricing in domestic medicines is based on cost plus method and in importing medicines is external reference based pricing. Turkey, Greece and Spain are the main countries as medicines reference price in Iran. Generally, registered branded medicine have imported exclusively by specific agents. Because of patent protection rules of branded medicines during their patent period in the world, they have a kind of market power. Level of market power of these medicines is depends on market structure, demand elasticity, pricing regulations and competition policies. These factors give a kind of monopoly to branded medicines in Iran and consequently, agents tend to set their branded medicines price as much higher as they can. In most cases, branded medicines originators charge lower prices for a medicine in one country than in another, taking into account their market power. This means that a country with limited resources can sometimes afford more of patented medicines by purchasing them in other countries at a lower price and importing them, rather than buying them directly in its domestic market at the higher price. Most of the time in Iran, the price of these medicines is higher than reference price countries. Many countries’ patent laws dictate that once a patent owner sells its goods in any country, it has no right to control the resale of those goods (so-called “regime of international exhaustion”). In legal terms, the patent owner has “exhausted” its property rights in the product actually sold while it maintains the exclusive right to manufacture the product, but it cannot use its intellectual property rights to prevent resale of those products it sells. Thus importers could buy a patented medicine in one country at the lower price and then resell the medicine in another country at a price that is higher but still undercuts Copyright © 2014 by School of Pharmacy Shaheed Beheshti University of Medical Sciences and Health Services Iranian Journal of Pharmaceutical Research (2014), 13 (4): 1111-1113