ABSTRACT
This chapter discusses the causes of diversion and its impacts, both real and perceived. It looks at some of the tactics adopted by manufacturers as one attempts to combat parallel trade, and propose an approach that could be more effective. The chapter examines the three dilemmas beset the healthcare industry and prevent it from being fully effective: the question of how to tackle risk, to the choice of product areas, and to pricing and promotional policies. The areas of risk, portfolio management and pricing strategy provide challenges to efficient supply chain management. An important aspect of the environment in which pricing strategies have to operate is that different countries differ in their ability, and their willingness, to pay for a given product. Product to the market channel partners is the most commonly used system across Europe and is employed by many pharmaceutical companies. Legislation in the United States, Japan and Europe provides financial incentives to biopharmaceutical companies producing orphan drugs.
