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Analysis of prices paid by low-income countries - how price sensitive is government demand for medicines?

Srivastava, Divya and McGuire, Alistair (2013) Analysis of prices paid by low-income countries - how price sensitive is government demand for medicines? LSE Health working paper series in health policy and economics , 35/2013. LSE Health , London, UK.

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Abstract

Access to medicines is an important health policy issue. This study analyses the demand for medicines in low-income countries from the perspective of the prices paid by public authorities. The analysis draws on World Health Organization (WHO) and Health Action International (HAI) 2006 data on procurement prices of medicines across 16 low-income countries covering 48 branded drugs and 18 therapeutic categories. Variation in prices, the mark-ups over marginal costs and estimation of price elasticities allows assessment of whether these elasticities are correlated with a country’s national income. Using the Ramsey pricing rule, the study’s findings suggest that substantial crosscountry variation in prices and mark-ups exist, with price elasticities ranging from -1 to -2, which are weakly correlated with national income. Government demand for medicines thus appears to be price elastic, raising important policy implications aimed at improving access to medicines for patients in low-income countries.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/LSEHealthAndSocialCare/public...
Additional Information: © 2013 The Authors
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Sets: Departments > Social Policy
Research centres and groups > LSE Health
Collections > LSE Health Working Paper Series in Health Policy and Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 35/2013
Date Deposited: 21 Nov 2013 09:29
URL: http://eprints.lse.ac.uk/54487/

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