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.
Drug; Procuremen; Low and Middle Income.;
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 May 2020.
TSE Working Paper, n. 19-999, March 2019, revised May 2020