Pooled Procurement of Drugs in Low and Middle Income Countries

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.

Keywords

Replaced by

Pierre Dubois, Yassine Lefouili, and Stéphane Straub, “Pooled Procurement of Drugs in Low and Middle Income Countries”, European Economic Review, vol. 132, n. 103655, February 2021.

Reference

Pierre Dubois, Yassine Lefouili, and Stéphane Straub, “Pooled Procurement of Drugs in Low and Middle Income Countries”, TSE Working Paper, n. 19-999, March 2019, revised December 2020.