Center–periphery Relationships of Pharmaceutical Value Chains: A Critical Analysis based on Goods and Knowledge Trade Flows

This article provides new evidence on center–periphery relationships in the pharmaceutical value chains from the new-structuralist perspective. Our contribution examines the foreign insertion of countries into pharmaceutical value chains. It is based on extensive indicators, such as world trade in gross terms, production and employment structure, and also on intensive indicators, such as trade in value-added, price per kilo of pharmaceuticals imported and exported, pharmaceutical industry wage shares, and intellectual property rights’ flows. We show that pharmaceutical value chains are concentrated in regions, whose centers are basically the US in America and Switzerland and Germany in Europe. Moreover, there are several countries from the global peripheries that are weakly integrated into pharmaceutical value chains, such as Brazil, Russia, Saudi Arabia. Finally, some countries, such as Mexico, India, Hungary, Poland, and even China, have undergone a maquiladora process in their roles in the international division of labor: they have become large exporters of pharmaceuticals with low prices per kilogram and a high content of imported added value, paying low salaries and maintaining deficits in intellectual property rights’ charges.