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The impact of public health sector stockouts on private sector prices and access to healthcare: Evidence from the anti-malarial drug market

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  • Fitzpatrick, Anne

Abstract

In developing countries, public sector health facilities frequently run out of essential medicines (“stockouts”). I test whether anti-malarial drug stockouts affect prices, quality, and overall access to anti-malarial drugs in private sector outlets in Uganda. I combine data from four sources: 1) standardized patient drug purchases; 2) vendor surveys; 3) real customer surveys; 4) public sector supply delivery dates. Using a difference-in-differences approach, I find that stockouts increase private-sector antimalarial drug prices by $0.68, or 35 percent. I find few changes in quality. Real customer characteristics change, suggesting that stockouts lead less educated and poorer customers to drop out of the market. Analysis using the 2016 Demographic and Health Survey additionally shows stockouts reduce treatment at public sector facilities and reduce the likelihood that children receive medicine. My results suggest that stockouts increase prices in the private sector and lead to less equitable health outcomes.

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  • Fitzpatrick, Anne, 2022. "The impact of public health sector stockouts on private sector prices and access to healthcare: Evidence from the anti-malarial drug market," Journal of Health Economics, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:jhecon:v:81:y:2022:i:c:s0167629621001296
    DOI: 10.1016/j.jhealeco.2021.102544
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    Cited by:

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    2. Dupas, Pascaline & Jain, Radhika, 2023. "Can beneficiary information improve hospital accountability? Experimental evidence from a public health insurance scheme in India," Journal of Public Economics, Elsevier, vol. 220(C).
    3. Liebman, Eli & Lawler, Emily C. & Dunn, Abe & Ridley, David B., 2023. "Consequences of a shortage and rationing: Evidence from a pediatric vaccine," Journal of Health Economics, Elsevier, vol. 92(C).

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    More about this item

    Keywords

    Stockout; Malaria; Public health sector; Private health sector; Health inequality;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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