I noticed a strange phenominon for a so called parallel patent.
If a patent drug is produced in India, plus the royalty fee, the price is is much lower than that in the USA. As a result, the USA should import a lot from India.
Then there is a question to ask: for a patent drug, if it is imported from India,the Americans should pay much less, where does the money saved go?
If there is only the USA, then the price of a patent drug should be much higher.
The Indians have already helped the Americans to save a lot of money. This money may be called cost save.
But on the other side, the Indians have to pay to the USA too much royalty fees which they could not afford at all. There certainly should be a big cut off.
In my opinin, the price difference between the two countries should be multipiled by the quantities flowing from India to the USA, this sum is just called the cost save.
The cost save should be compensated by the royalty fees, that means, the quotient should be the sum for the Indians not to pay any more for they already paid by the cost save.
In the following I will discuss in details.
the patent drugs are royalty free for the Indians always.
In India, the India price=India cost
In the 20 years from the filing date, suppose the patent is protected in the USA and not in India.
In the USA,
USA price = USA cost +USA roalty, if the drug is produced in the USA.
In the USA,
USA price=India cost + (USA cost-India cost) +USA roalty, If the drug is from India to the USA.
royalty actual = (USA cost-India cost) + USA roalty
In this way, the USA patent holders may produce the drug in India and import form India to have a better gain.
In India,
USA roalty X India quantity = roalty demand
cost save = quantity flow from India to the USA X (USA cost-India cost)
roalty demand - cost save = roalty due
The royalty due is the sum to be paid later.
In the next 20 years, suppose the patent is not protected in the USA and is protyected in India.
In the USA,
USA price=USA cost, if the drug is produced in the USA.
USA price=India cost + (USA cost-India cost) , If the drug is from India to the USA.
royalty actual = (USA cost-India cost)
In this way, the USA patent holders may produce the drug in India and import form India to have a better gain.
In India,
cost save = quantity flow from India to the USA X (USA cost-India cost)
cost save - roalty due = royalty paid
The royalty paid is the sum to be compensated later. For instance, the USA patent holders may have 30% of the sum as a profit. The other 70% is handed over to the USA goverment as a roalty deposit for future use. The Indians may request the roalty deposit to pay to other patent drugs.
