In a double marginalization model which is played between a domestic monopolistic manufacturer of pharmaceuticals and a foreign exclusive distributor, I examine the impact of parallel trade freedom on the manufacturer's profit. I also analyze its impact on global welfare for low, intermediate,...

We develop a simple double marginalization model with complete information, in which an original manufacturer of a pharmaceutical product faces potential competition from parallel imports by a foreign exclusive distributor. The model suggests that parallel imports will never occur in the...