Benefits Of Parallel Trading

Benefits Of Parallel Trading

15-08-2022

The same products are traded at lower costs in countries with different economic conditions. Parallel trade, on the other hand, is the transportation of these products to different markets by taking them from countries where they are sold at affordable prices. It is defined by this name because it runs parallel to the parallel trade distribution network. These price differences between countries arise from the price policies of firms between the domestic and import markets. Pharmaceutical prices, on the other hand, are kept constant at certain levels since social purposes are prioritized. However, the exchange rate difference between countries, labor force, raw material ratio, consumer preferences cause price differences between countries. These price differences, on the other hand, pave the way for parallel imports. Thanks to the developments in the global arena, the percentage share of parallel trade is gradually developing.

Parallel Import Definition And Development

The definition of parallel import is defined as the import of an independent business with the aim of buying the original product, which is cheaper in a country, and selling it to the country where it is sold more expensive in the market. Parallel imports are also called cross-country trade. The importation of the same product to the country where it was previously in the market and the emergence of a competition between the same products in the markets occur with parallel imports. This competition is called intra-brand competition. The most important point in this competition is that the products are original. In other words, illegal imports and non-original products are not suitable for parallel imports. It is very important for public health that the products are legal in parallel imports, especially in the health sector, including drug imports.

Parallel İmports In The Pharmaceutical And Health Sector

The prices of drugs and medical products are determined by the legal institutions by evaluating the market dynamics of the countries. These pricing applied in the markets are determined as the accepted form of trade by the European Commission. Thanks to parallel trade, affordable medical products and drugs are purchased from those countries and offered to the public in the more expensive domestic market, which contributes to public health. For a medicinal product to be imported and distributed in another country, the product must be original. In order to carry out parallel trade, there must be a distributor in the country to be exported, but the product is also traded by different companies.

What Are The Benefits Of Parallel Imports?

Parallel imports have many benefits if they are made in accordance with all the rules. Its feature, which is among its most comprehensive benefits, is on the competition that will occur in the markets. With parallel imports, it is much easier for manufacturers to attract the attention of their competitors marketing the same or similar products. If the product is in competition with itself, monopolization in the markets is prevented. It is possible to prevent sovereignty and abuse, especially in the pharmaceutical sector, as a result of competition with parallel imports. If it is necessary to list the benefits of parallel imports as articles;

• It prevents monopolization in the markets.
• It is ensured that people have access to medicines and many products at more affordable prices.
• Improvement of the national economy is ensured.
• The benefit of the consumer is provided by the decrease in market prices.

Negative Opinions About Parallel Import

Although it has many positive aspects, the most striking criticism about parallel imports, which is criticized by some segments, is stated as parasitic competition. It is not particularly welcomed by the distributors of the brands that the companies selling the product in the market within the scope of parallel imports make a profit by using the brand value of the product without any advertising work. However, the decisions taken in order to protect parallel imports within the scope of the principle of international consumption with the decision of the Supreme Court throughout the world and in our country are acting in accordance with international norms.