Access to Pharmaceuticals in Developing Countries: Finding the Optimal Suboptimal Solution Open Access

Laski, Reiko (Spring 2019)

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Patent protection for pharmaceutical companies has sparked controversy over the past few decades between the economics of incentivizing research and development and the ethics of denying individuals access to life-saving medicines on the basis of their ability to pay. This paper studies the effect of competition on prices of antiretroviral drugs under specific circumstances when generic production of patented pharmaceutical products is permitted and analyzes changes in the accessibility of these products within a country in response to increased affordability. Using data on NGO procurement of antiretroviral drugs, I estimate the effect of additional competitors on the prices of generic drugs and compare these prices to those offered by patent-holding manufacturers under differential pricing schemes. I furthermore use survey data from Ethiopia to analyze regional and demographic disparity in pharmaceutical access over time. 

Table of Contents

1. Introduction 1

2. Literature Review 5

2.1 Strategies to Reduce ARV Prices in Developing Countries 5

2.2 Efficacy of HIV Treatment Programs 10

3. Data 10

3.1 ARV Procurement Transactions 10

3.2 Demographic and Health Surveys 12

4. Methodology 13

4.1 Effect of Competition on ARV Prices 13

4.2 Effect of Price on ARV Accessibility 14

5. Results 15

5.1 Determinants of ARV Prices 15

5.2 Relationship between Price and Competition 17

5.3 ARV Accessibility 21

6. Conclusion 25

References 27

List of Figures

5.1 Trends in number of generic producers and price for the TDF/3TC 300/300mg tablet 17

5.2 Trend in price of the TDF/3TC 300/300mg tablet within Ethiopia 18

5.3 Trends in other ARV prices over time 20

5.4 Knowledge of drugs to prevent mother-to-child transmission of HIV in Ethiopia (2005; 2011; 2016) 23

List of Tables

3.1 Summary statistics, ARV Procurement Transactions: 2004-2018 11

3.2 Summary statistics, Ethiopia DHS 12

5.1 Estimation of the effect of competition on log of ARV unit prices 16

5.2 Test for Structural Breaks 19

5.3 Effects on knowledge of PMTCT in Ethiopia 22

5.4 Heterogeneous effects on knowledge of PMTCT 25 

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