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



Summary

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.


Keywords

transaction costs, price discrimination, patents, price differentials, health NGOs