Drivers of public procurement prices: Evidence from pharmaceutical markets

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dc.contributor.authorAllende, Claudia
dc.contributor.authorAtal, Juan Pablo
dc.contributor.authorCarril, Rodrigo
dc.contributor.authorCuesta, Jose Ignacio
dc.contributor.authorGonzalez-Lira, Andres
dc.date.accessioned2025-01-20T16:08:18Z
dc.date.available2025-01-20T16:08:18Z
dc.date.issued2024
dc.description.abstractThis paper examines the determinants of public procurement prices using comprehensive data on pharmaceutical purchases by the public sector in Chile. We first document sizable price differences between buyers for the same product and quantity purchased: the difference between the average prices paid by buyers at the 90th th and 10th th percentiles of the distribution is 16 percent. Our main results are related to the importance of market structure in explaining the dispersion in procurement prices. We find that market structure explains three times more dispersion than buyer effects. Moreover, we leverage exogenous variation in market structure due to patent expirations to estimate that the entry of an additional seller decreases average procurement prices by 11.7 percent, which is 72 percent of the price differences implied by the gap between the 90th th and 10th th percentiles of estimated buyer effects. These results suggest that supply-side factors are relevant determinants of public procurement prices and that their quantitative importance may exceed that of demand-side factors previously emphasized in the literature.
dc.fuente.origenWOS
dc.identifier.doi10.1016/j.ijindorg.2024.103086
dc.identifier.eissn1873-7986
dc.identifier.issn0167-7187
dc.identifier.urihttps://doi.org/10.1016/j.ijindorg.2024.103086
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/90067
dc.identifier.wosidWOS:001316253400001
dc.language.isoen
dc.revistaInternational journal of industrial organization
dc.rightsacceso restringido
dc.subjectProcurement
dc.subjectCompetition
dc.subjectDrugs
dc.subject.ods03 Good Health and Well-being
dc.subject.odspa03 Salud y bienestar
dc.titleDrivers of public procurement prices: Evidence from pharmaceutical markets
dc.typeartículo
dc.volumen96
sipa.indexWOS
sipa.trazabilidadWOS;2025-01-12
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