| Parallel imports pharmaceuticals are becoming a very important issue in the process of global economic integration. Parallel imports of pharmaceuticals are not merely a question of intellectual property, because it has particularly affected the pharmaceutical industry,as the industry has a close relationship to the social welfare. Therefore, regulation of parallel imports in the pharmaceuticals area has become a critical issue in the global trading system. For many years'efforts from the developing countries, the developed countries make a concession recently, for TRIPS affirmed the sovereign right of governments to protect public health and each member has the right to grant compulsory licenses and parallel imports of the essential pharmaceuticals in times of public health crises. This paper presents a simple model that analyzes the general background, effects, legality on parallel import of pharmaceuticals and the pharmaceutical industry. First, the paper analyzes the economic reasons of parallel imports in pharmaceuticals. In the light of economic theory, it is likely to have multiple causes, including retail price discrimination, vertical pricing inefficiencies, free riding on fixed distribution costs, and differential price controls.And then, the paper discusses the potential impact on local pharmaceutical R&D and social welfare. While theories predicted parallel trade would lead to the problem of pharmaceuticals safety and ambiguous welfare effects, and to some degree, it will discourage local firms to devote additional R&D spending toward developing patentable substances. The paper focuses on introducing the comprehensive theoretical basis and foreign legal experience. Furthermore, the chapter replenishes trains of thought from some new perspectives, including analysis of the country's economic level and the background of the legislation. Finally, the paper explains the core of the debates between the available of pharmaceuticals in poor countries and public health.
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