IDEAS home Printed from https://ideas.repec.org/a/exp/econcs/v3y2015i2p93-112.html
   My bibliography  Save this article

Price Reversal Pattern of ARV Drugs: A Transaction-Cost Approach Digression

Author

Listed:
  • Frank LORNE

    (New York Institute of Technology-Vancouver)

  • Sneh SHAH

    (New York Institute of Technology-Vancouver)

Abstract

A price reversal pattern of ARV drugs was noted across lower and middle income countries in that the lower-income countries have higher prices relative to higher-income countries based on a 2008-2009 Summary Report by World Health Organization. The transaction costs affecting AVR drug pricing can be broadly classified into two kinds: One between the final users and the opinion/knowledge experts, and the other between the opinion/knowledge experts and the manufacturers. Economist’s version of price discrimination needs to be modified by including transaction costs. Transaction costs also point to institution creditability factors that will affect NGO procurement.

Suggested Citation

  • Frank LORNE & Sneh SHAH, 2015. "Price Reversal Pattern of ARV Drugs: A Transaction-Cost Approach Digression," Expert Journal of Economics, Sprint Investify, vol. 3(2), pages 93-112.
    • Handle: RePEc:exp:econcs:v:3:y:2015:i:2:p:93-112
    as

    Download full text from publisher

    File URL: http://economics.expertjournals.com/wp-content/uploads/EJE_311lorne93-112.pdf
    Download Restriction: no
    File URL: http://economics.expertjournals.com/23597704-311/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lichtenberg Frank R., 2010. "Pharmaceutical Price Discrimination and Social Welfare," Capitalism and Society, De Gruyter, vol. 5(1), pages 1-32, July.
    2. Simon Cowan, 2007. "The welfare effects of third-degree price discrimination with nonlinear demand functions," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 419-428, June.
    3. Giaccotto, Carmelo & Santerre, Rexford E & Vernon, John A, 2005. "Drug Prices and Research and Development Investment Behavior in the Pharmaceutical Industry," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 195-214, April.
    4. Ross, Stephen A, 1973. "The Economic Theory of Agency: The Principal's Problem," American Economic Review, American Economic Association, vol. 63(2), pages 134-139, May.
    5. Cheung, Steven N S, 1969. "Transaction Costs, Risk Aversion, and the Choice of Contractual Arrangements," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 23-42, April.
    6. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    7. Guinness, Lorna, 2011. "What can transaction costs tell us about governance in the delivery of large scale HIV prevention programmes in southern India?," Social Science & Medicine, Elsevier, vol. 72(12), pages 1939-1947, June.
    8. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-540, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lőrinczi, Gyula, 2013. "A cégek eredete [The origin of the firm]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 25-46.
    2. Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, University Library of Munich, Germany.
    3. Yannis Karagiannis, 2007. "Foundational Economic Theories for Political-Scientific Inter-Branch Studies," RSCAS Working Papers 2007/16, European University Institute.
    4. Yannis Karagiannis, 2007. "Economic Theories and the Science of Inter-Branch Relations," RSCAS Working Papers 2007/04, European University Institute.
    5. Hsuan-Yu Lin & Chih-Hai Yang, 2016. "Uncertainty, specific investment, and contract duration: evidence from the MLB player market," Empirical Economics, Springer, vol. 50(3), pages 1009-1028, May.
    6. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    7. de Bragança, Gabriel Godofredo Fiuza & Daglish, Toby, 2017. "Investing in vertical integration: electricity retail market participation," Energy Economics, Elsevier, vol. 67(C), pages 355-365.
    8. Gersbach, Hans & Glazer, Amihai, 1999. "Markets and Regulatory Hold-Up Problems," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 151-164, March.
    9. Dildar Hussain & Josef Windsperger, 2013. "A property rights view of multi-unit franchising," European Journal of Law and Economics, Springer, vol. 35(2), pages 169-185, April.
    10. Kosnik, Lea & Lange, Ian, 2011. "Contract renegotiation and rent re-distribution: Who gets raked over the coals?," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 155-165, September.
    11. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    12. Mark Casson, 2018. "The Theory of International Business: The Role of Economic Models," Management International Review, Springer, vol. 58(3), pages 363-387, June.
    13. Tomoeda, Kentaro, 2019. "Efficient investments in the implementation problem," Journal of Economic Theory, Elsevier, vol. 182(C), pages 247-278.
    14. Shanoyan, Aleksan & Brent Ross, R. & Gow, Hamish R. & Christopher Peterson, H., 2014. "Long-term sustainability of third-party facilitated market linkages: Evidence from the USDA marketing assistance program in the Armenian dairy industry," Food Policy, Elsevier, vol. 46(C), pages 157-164.
    15. Manuel González & Benito Arruñada & Alberto Fernández, 1997. "La decisión de subcontratar: el caso de las empresas constructoras," Investigaciones Economicas, Fundación SEPI, vol. 21(3), pages 501-521, September.
    16. Hermano, Víctor & Martín-Cruz, Natalia, 2013. "How to Deliver Foreign Aid? The Case of Projects Governed by the Spanish International Agency," World Development, Elsevier, vol. 43(C), pages 298-314.
    17. Olivier Meier & Aurélie Sannajust, 0. "The smart contract revolution: a solution for the holdup problem?," Small Business Economics, Springer, vol. 0, pages 1-16.
    18. Williamson, Oliver E., 2010. "Transaction Cost Economics: The Natural Progression," Journal of Retailing, Elsevier, vol. 86(3), pages 215-226.
    19. Jean-François Hennart, 2020. "More than intent: A bundling model of MNE–SME interactions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1176-1194, September.
    20. Bengtsson, Niklas, 2015. "Efficient informal trade: Theory and experimental evidence from the Cape Town taxi market," Journal of Development Economics, Elsevier, vol. 115(C), pages 85-98.

    More about this item

    Keywords

    transaction costs; price discrimination; patents; price differentials; health NGOs;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:exp:econcs:v:3:y:2015:i:2:p:93-112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alin Opreana (email available below). General contact details of provider: https://economics.expertjournals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.