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Price Reversal Pattern of ARV Drugs: A Transaction-Cost Approach Digression

Author

Listed:
  • Frank LORNE

    (New York Institute of Technology-Vancouver)

  • Sneh SHAH

    (New York Institute of Technology-Vancouver)

Abstract

A price reversal pattern of ARV drugs was noted across lower and middle income countries in that the lower-income countries have higher prices relative to higher-income countries based on a 2008-2009 Summary Report by World Health Organization. The transaction costs affecting AVR drug pricing can be broadly classified into two kinds: One between the final users and the opinion/knowledge experts, and the other between the opinion/knowledge experts and the manufacturers. Economist’s version of price discrimination needs to be modified by including transaction costs. Transaction costs also point to institution creditability factors that will affect NGO procurement.

Suggested Citation

  • Frank LORNE & Sneh SHAH, 2015. "Price Reversal Pattern of ARV Drugs: A Transaction-Cost Approach Digression," Expert Journal of Economics, Sprint Investify, vol. 3(2), pages 93-112.
    • Handle: RePEc:exp:econcs:v:3:y:2015:i:2:p:93-112
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    References listed on IDEAS

    as
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    3. Giaccotto, Carmelo & Santerre, Rexford E & Vernon, John A, 2005. "Drug Prices and Research and Development Investment Behavior in the Pharmaceutical Industry," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 195-214, April.
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    5. Cheung, Steven N S, 1969. "Transaction Costs, Risk Aversion, and the Choice of Contractual Arrangements," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 23-42, April.
    6. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    7. Guinness, Lorna, 2011. "What can transaction costs tell us about governance in the delivery of large scale HIV prevention programmes in southern India?," Social Science & Medicine, Elsevier, vol. 72(12), pages 1939-1947, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    transaction costs; price discrimination; patents; price differentials; health NGOs;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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