Towards Agent-based Simulation of the Parallel Trading Market of Pharmaceuticals

Pharmaceutical parallel trade is a legal trade in European countries, where traders can buy medicinal products in one country and sell them in other countries to make a profit. In the pharmaceutical parallel trade market, players such as manufacturers, wholesalers, parallel traders, pharmacies, and hospitals are involved. Studying and analyzing this market is of significant interest to economists and players involved. Agent-based modeling offers a robust algorithmic framework to analyze macroeconomic phenomena through micro-founded models. As an initial step in using agent-based modeling for the parallel trade of pharmaceuticals, we consider a simplified pharmaceutical trading market inspired by available game theory models. In this paper, we developed and elaborated the implementation of an agent-based model for the pharmaceutical trade market and employed it to run multiple scenarios that are impossible to analyze through game-theoretic models. Subsequently, we demonstrated how an agent-based model could be utilized to analyze the market from an economic perspective and how players in this market can recruit this model in their business decisions.