Using In-country Comparables to Measure the Returns Due Pharmaceutical Marketing and Distribution Affiliates
1 December 2003
By Dr. Richard Rozek et al.
Pharmaceutical companies often perform marketing and distribution through affiliates in numerous countries. This article discusses how, given the structural differences among national pharmaceutical markets, one can use in-country comparables to measure the returns due these local marketing/distribution entities under OECD transfer pricing guidelines.
The authors summarize the differences across pharmaceutical markets in France, Germany, Italy, Spain, and the United Kingdom. They use publicly available data on companies performing marketing/distribution in these countries to illustrate that substantial differences exist across countries in the returns earned for these functions.
This abstract is republished with permission from the International Transfer Pricing Journal, Volume 10, Number 6, December 2003, Copyright (c) 2003 International Bureau of Fiscal Documentation. All rights reserved.
