Companies like EurimPharm work much as arbitrageurs do in the financial markets. Instead of trading stocks or bonds, the drug arbitrageurs buy prescription and over-the-counter pharmaceuticals from European countries where they cost less, such as Spain and Greece.
They repackage and resell them at a markup in more- expensive European markets, including Germany and the Netherlands.
The arbitrageurs’ profit comes from country-to-country price differences that can be hefty. A Europe-wide price survey in 2009 by a Spanish parallel trader showed price differentials that in a few cases topped 200 percent.
“There used to be a rule of thumb that said you can make money on a price difference of 20 to 25 percent,” he says. “Now you can do it with 10 percent.”
Here is more, there are several other economic points in the article, and for the pointer I thank Alex Bilimoria.