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Concentration and drug prices in the retail market for malaria treatment in rural Tanzania

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  • Catherine Goodman
  • S. Patrick Kachur
  • Salim Abdulla
  • Peter Bloland
  • Anne Mills

Abstract

The impact of market concentration has been little studied in markets for ambulatory care in the developing world, where the retail sector often accounts for a high proportion of treatments. This study begins to address this gap through an analysis of the consumer market for malaria treatment in rural areas of three districts in Tanzania. We developed methods for investigating market definition, sales volumes and concentration, and used these to explore the relationship between antimalarial retail prices and competition. The market was strongly geographically segmented and highly concentrated in terms of antimalarial sales. Antimalarial prices were positively associated with market concentration. High antimalarial prices were likely to be an important factor in the low proportion of care‐seekers obtaining appropriate treatment. Retail sector distribution of subsidised antimalarials has been proposed to increase the coverage of effective treatment, but this analysis indicates that local market power may prevent such subsidies from being passed on to rural customers. Policymakers should consider the potential to maintain lower retail prices by decreasing concentration among antimalarial providers and recommending retail price levels. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Catherine Goodman & S. Patrick Kachur & Salim Abdulla & Peter Bloland & Anne Mills, 2009. "Concentration and drug prices in the retail market for malaria treatment in rural Tanzania," Health Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 727-742, June.
    • Handle: RePEc:wly:hlthec:v:18:y:2009:i:6:p:727-742
    DOI: 10.1002/hec.1473
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    References listed on IDEAS

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    1. Puig-Junoy, Jaume & López-Valcárcel, Beatriz González, 2014. "Launch prices for new pharmaceuticals in the heavily regulated and subsidized Spanish market, 1995–2007," Health Policy, Elsevier, vol. 116(2), pages 170-181.
    2. Terry A. Taylor & Wenqiang Xiao, 2014. "Subsidizing the Distribution Channel: Donor Funding to Improve the Availability of Malaria Drugs," Management Science, INFORMS, vol. 60(10), pages 2461-2477, October.
    3. Schultz Hansen, Kristian & Hjernø Lesner, Tine & Østerdal, Lars Peter, 2013. "Incentivising appropriate malaria treatment-seeking behaviour with price subsidies," DaCHE discussion papers 2013:8, University of Southern Denmark, Dache - Danish Centre for Health Economics.

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