Parallel Trade in Trademarked Pharmaceuticals in Europe, Finding a solution for China

Parallel trade in the pharmaceutical industry is a complicated issue because it has connections with competition law, trade law, and intellectual property law. International exhaustion benefits consumers by promoting price competition. This is an extremely attractive argument. For several years, the parallel trade in pharmaceutical products has been an important issue for the European pharmaceutical industry and numerous EU (European Union) institutions, including the European Commission, the ECJ (European Court of Justice) and the Member States of the EU. Much of the debate now raging about parallel trade is centred on precisely this question of international exhaustion&semic this concerns manufacturers, parallel traders, retailers, consumers and national governments. In China there is still no clear law regulating this area. Despite being regarded as one of the world's strategic potential markets for drugs and despite pharmaceuticals being classified as one of the key strategic industries along with oil and gas, iron and steel by China's government, there has been little comprehensive investigation into the effects of parallel imports on the Chinese pharmaceutical industry. In this paper, I discuss several aspects of the parallel trade problem. In the first part I give an overview of the current debate, then in the second section try to find a global standard for the treatment of such trade on the international law level. The global IPR system allows each country to provide its own legal regime. After investigating the European case law, I found I still needed to discuss the economic theories of parallel trade in order to give the whole picture. I provide concluding remarks in the final section, recommending international exhaustion in the short term and national exhaustion as the long term policy for China