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Pooled Procurement of Drugs in Low and Middle Income Countries

Author

Listed:
  • Pierre Dubois

    (Toulouse School of Economics)

  • Yassine Lefouili

    (Toulouse School of Economics)

  • Stéphane Straub

    (Toulouse School of Economics)

Abstract

We use data from seven low and middle income countries with diverse drug procurement systems to assess the effect of centralized procurement on drug prices and provide a theoretical mechanism that explains this effect. Our empirical analysis is based on exhaustive data on drug sales quantities and expenditures over several years for forty important molecules. We find that centralized procurement of drugs by the public sector allows much lower prices but that the induced price reduction is smaller when the supply side is more concentrated.

Suggested Citation

  • Pierre Dubois & Yassine Lefouili & Stéphane Straub, 2019. "Pooled Procurement of Drugs in Low and Middle Income Countries," Working Papers 508, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:508
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    Cited by:

    1. Juan Pablo Atal & José Ignacio Cuesta & Felipe González & Cristóbal Otero, 2024. "The Economics of the Public Option: Evidence from Local Pharmaceutical Markets," American Economic Review, American Economic Association, vol. 114(3), pages 615-644, March.
    2. Brugués, Felipe & Brugués, Javier & Giambra, Samuele, 2024. "Political connections and misallocation of procurement contracts: Evidence from Ecuador," Journal of Development Economics, Elsevier, vol. 170(C).
    3. Lucy Xiaolu Wang, 2023. "A cost-benefit analysis of the medicines patent pool," Economics Bulletin, AccessEcon, vol. 43(3), pages 1298-1319.
    4. de Leverano, Adriano & Baulia, Susmita, 2023. "A new indicator to implement effective spending review policies in the public procurement for standardized goods," ZEW Discussion Papers 23-063, ZEW - Leibniz Centre for European Economic Research.
    5. Lin, Haizhen & Wang, Yanhao, 2025. "The value of group purchasing: Evidence from the U.S. hospital industry," Journal of Public Economics, Elsevier, vol. 247(C).
    6. Geng, Hao & Shi, Ce Matthew, 2024. "Health policy, price regulation, and innovation: Evidence from China’s vaccine industry," Journal of Development Economics, Elsevier, vol. 167(C).
    7. Wang, Lucy Xiaolu & Zahur, Nahim Bin, 2025. "Procurement institutions and essential drug supply in low and middle-income countries," Journal of Health Economics, Elsevier, vol. 101(C).
    8. Lin Lin & Bo Wang, 2025. "Marketing Status and Brand‐Name Drug Prices: Evidence From Rx‐To‐OTC Switch," Health Economics, John Wiley & Sons, Ltd., vol. 34(6), pages 1064-1084, June.
    9. Clark, Robert & Coviello, Decio & de Leverano, Adriano, 2021. "Centralized procurement and delivery times: Evidence from a natural experiment in Italy," ZEW Discussion Papers 21-063, ZEW - Leibniz Centre for European Economic Research.
    10. Hugo Molina, 2025. "Buyer Alliances in Vertically Related Markets [Concentration dans la grande distribution alimentaire : Enjeux économiques et impact pour les consommateurs]," Post-Print hal-05128727, HAL.
    11. De Leverano, Adriano & Coviello, Decio & Clark, Robert, 2023. "Centralized Procurement and Delivery Times: Evidence from a Natural Experiment in Italy," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277589, Verein für Socialpolitik / German Economic Association.
    12. Clarissa Lotti & Giancarlo Spagnolo, 2022. "Indirect Savings from Public Procurement Centralization," CEIS Research Paper 532, Tor Vergata University, CEIS, revised 01 Feb 2022.
    13. Allende, Claudia & Atal, Juan Pablo & Carril, Rodrigo & Cuesta, José Ignacio & González-Lira, Andrés, 2024. "Drivers of public procurement prices: Evidence from pharmaceutical markets," International Journal of Industrial Organization, Elsevier, vol. 96(C).

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