(University of Oregon, 2006) Je, Young Kwang; Irvin, Renee A.
Policy on the parallel imports of medicines is being debated currently in Korea.
This paper looks at several countries' trends, the Trade-Related Aspects of Intellectual
Property Rights Agreement, and the Korean golf market to search for policy ideas. A
simple consumer welfare benefit-cost and sensitivity analysis shows that parallel
imports give not only consumers' surplus on parallel imported golf clubs, but also a
much larger consumers' surplus on authorized brand versions.This paper makes the following recommendations: First, parallel imports should be
permitted according to the principle of free trade, if the cost of parallel imports to the
country is not much larger than the benefit. Second, even if parallel impmts are
pem1itted, some exceptional cases should be allowed where international exhaustion is
problematic. Third, governmental intervention, a clear labeling system, for example, is
required to protect consumers, and help consumers make rational choices.
