parallel trade (parallel imports)

(economics) Imports of genuine copyrighted, patented or trademarked products without the authorization of the copyright, patent or trademark holder. Parallel trade is the subject of great debate, especially in the pharmaceutical industry. For example, U.S. manufacturers of pharmaceuticals sell their products for what the market will bear in local country markets around the world. In some cases licenses are granted to producers to manufacture the items locally, often at substantially lower cost, resulting in a lower local market price. This means that the same drug may sell for more in the U.S. and, for example, less in Canada. U.S. consumers, however, in an effort to save money, purchase the drug in Canada and import it into the U.S., technically in violation of U.S. import laws regarding copyrights, patents and trademarks. The pharmaceutical industry argues that this practice, while giving short-term benefit to consumers, drains profits and ultimately research and development money from the industry for new products. Also called gray market or gray market imports.

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