The examination of re-importation and parallel trade is a well-known debate, and one that has many determining factors. Parallel trade occurs when products are diverted from their original intended destination to other countries where the medications may be cheaper.
This usually includes products protected by patents, copyrights, or trademarks. The problem lies in the fact that the original owner of the product has no control over where the product ends up. Regardless of the country, parallel trade has seen its fair share of fans and enemies – and rightfully so. People argue that it helps developing countries obtain cheaper products, however in the long run it may end up hurting them by raising prices to the international average price.
Additionally, parallel importers are not subject to the same safety regulations as the original manufacturers, and in turn their intellectual property rights are infringed upon and they are open for piracy and counterfeiting. In the long run, these methods deter the manufacturers’ incentives to invest in research, marketing, and the overall development of new products.
Hidden Costs
Everyone is aware that drugs are cheaper across the border… but why? Well, one big reason is that when the medication is produced in the states, it is subjected to rigorous testing, R&D, and Marketing costs. This affects the price in a big way. In England, it is estimated that 90% of pharmacists source products through parallel trade, although in Sweden, Denmark, and the Netherlands it’s fewer than 10%. Prices are set differently depending on which country you are shipping to - and this is where the supply chain weakens.
In Pharmaceuticals
Parallel trade is not illegal; however the products are rarely accounted for. Medications, on a molecular level, are very easy to copy. This makes patents and IPR’s a necessity. In this industry, innovation is on par with a company’s survival. When the manufacturer has no control over their products once they leave the warehouse, it forms an illegitimate supply chain which opens up a Pandora’s Box of potential life-threatening problems. Governing bodies are constantly pushing for regulations to improve the safety of the people in need of the medication; however the problem isn’t illegal so it often falls on deaf ears. When you add it all up, the need for full product visibility is clear.
Be Proactive
Ensuring a safe and secure supply chain is no easy task, and that’s why Acsis solutions are requested heavily in every industry. You need one complete way to manage your production lines and track products at any point in the supply chain in order to put a stop to parallel trade.
Our ProducTrak Suite of solutions are built to positively impact your bottom-line while still allowing you to comply with governing mandates in an ever-changing business environment.
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ProducTrak Mobile ensures complete product lifecycle management – from raw material, through production, and delivery to the hospital, wholesaler, or retailer.
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ProducTrak SPDM is a serialization management solution that works with existing ERP systems to enhance product visibility at the item level and ensures compliance with ePedigree mandates or Food Safety Modernization Act requirements.
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ProducTrak Parcel Pack provides a station-based solution for managing the packing and shipping processes for serialized and non-serialized product and updates the ERP system automatically for more accurate inventory levels.
Acsis ProducTrak solution has the full functionality to track and trace individual products or assets through its entire lifecycle; as well as manage contract manufacturers, packagers and suppliers at the push of a button. And Acsis also provides the flexibility of selecting only the modules needed to address their specific issues or government mandates. That’s the power of Acsis.
To learn more about how we are helping companies identify and address parallel trade, contact us at (856)673-3000, or schedule a demo.