title: Analysis of prices paid by low-income countries - how price sensitive is government demand for medicines?
abstract: BACKGROUND
  Access to medicines is an important health policy issue. This paper considers demand structures in a selection of low-income countries from the perspective of public authorities as the evidence base is limited. Analysis of the demand for medicines in low-income countries is critical for effective pharmaceutical policy where regulation is less developed, health systems are cash constrained and medicines are not typically subsidised by a public health insurance system
  
  
  METHODS
  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 a unique dataset from World Health Organization (WHO) and Health Action International (HAI) using 2003 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.
  
  
  RESULTS
  Using the Ramsey pricing rule, the study's findings suggest that substantial cross-country variation in prices and mark-ups exist, with price elasticities ranging from -1 to -2, which are weakly correlated with national income.
  
  
  CONCLUSIONS
  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.
authors: OECD, 2 Rue Andre Pascal, Paris 75016, France. divyasrivastava.article@gmail.com.
authors: Divya
authors: D
authors: Srivastava
authors: Alistair
authors: A
authors: McGuire
mesh_terms: D019985:Benchmarking; D003906:Developing Countries; D016527:Drug Costs; D004335:Drug and Narcotic Control; D018954:Drugs, Essential / Q000191:economics* / Q000600:supply & distribution; D014943:Global Health; D006297:Health Services Accessibility / Q000706:statistics & numerical data*; D006801:Humans
chemical_list: D018954:Drugs, Essential