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Pooled Procurement of Drugs in Low and Middle Income Countries

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  • 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. 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).
    3. 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.
    4. 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).
    5. Hugo Molina, 2024. "Buyer Alliances in Vertically Related Markets," Working Papers hal-03340176, HAL.
    6. Lucy Xiaolu Wang, 2023. "A cost-benefit analysis of the medicines patent pool," Economics Bulletin, AccessEcon, vol. 43(3), pages 1298-1319.
    7. 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.
    8. Clarissa Lotti & Giancarlo Spagnolo, 2022. "Indirect Savings from Public Procurement Centralization," CEIS Research Paper 532, Tor Vergata University, CEIS, revised 01 Feb 2022.
    9. 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).

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