Regulated market: what is it?

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A regulated market is a particular industry, and sometimes a national environment in general, where the buying and selling of goods and services is only permitted with some level of government supervision, involvement, or manipulation. Extreme examples of regulated market environments are those where entire industries are nationalized by a government, such as utilities, telecommunications, and military equipment production. Furthermore, when these industries are privatized, such as during the reform period in former Soviet bloc nations after the dissolution of the Soviet Union in the late 1980s to 1991, markets are still under relatively tight control behind From Stage. .

A contemporary example of a regulated market on an international scale is that of the pharmaceutical industry in the BRIC countries, made up of Brazil, Russia, India and China. Brazil’s Ministry of Health establishes price controls on drugs for local consumption and protects Brazilian producers of generic versions of drugs to the extent that foreign companies have failed to enter the pharmaceutical market there. As of 2008, local Brazilian companies control 80% of the generic drug market in Brazil through this regulation.

Russian protectionist measures for local pharmaceutical production include a state drug price control program, known as Dopolnitelnoe Lekarstvennoe Obespechenie (DLO), translated as the Supply of Supplementary Drugs. Like many regulated markets, India’s pharmaceutical environment can be difficult for large multinational corporations because intellectual property and patent protection for medicines is seemingly lax. This is often used as a strategy by governments in the regulated market to prevent the entry of foreign producers. China goes a step further, trying to keep foreign competitors out by fragmenting its markets, where companies can focus their distribution on just one particular province. The Chinese government also tends to be slow to approve many drugs that are otherwise widely distributed elsewhere.

While some nations are deregulating markets to improve the profitability of private companies and bolster their economies, the practice is never universal. A good example of this is the airlines that, in recent years, have been deregulated in the United States and Australia. They are still heavily regulated in the UK and the South American countries of Columbia, Ecuador and Venezuela.

UK airline ticket prices as of 2005 have been controlled by the National Civil Aviation Authority (CAA), although it underwent some deregulation during 1979 when Margaret Thatcher became Prime Minister. The United States also underwent more extensive deregulation during 1979, removing price controls, route selection for airline hubs, etc. However, the US airline industry is still partially regulated, and the Transportation Security Administration (TSA) exercises tight control over security and some aspects of commerce.

Most large industries have a regulated market element in some respect, but the level of control varies widely. The US healthcare industry is unique among industrialized nations in being largely unregulated, although all medical professionals must have a government-approved license. Oversight laws regarding long-term care facilities and more are widespread.

The manifest purpose of more regulated market activity, such as that undertaken by the Food and Drug Administration (FDA) to control the distribution of drugs in the United States, is to protect its citizens from harm and deprivation. However, controlled market practices are a fundamental part of any mature, mixed economy that promotes free market ideals. As a subtle method of trade protectionism, a regulated market can keep foreign competitors out and bolster the success of local economies.

Smart Asset.

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