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    International Trade and Determinants of Price Differentials of Insulin Medicine

    Helble, Matthias; Aizawa, Toshiaki | November 2015
    Abstract
    Empirical studies on pharmaceuticals pricing across countries have found evidence that prices vary according to per capita income. These studies are typically based on survey data from a subset of countries and cover only one year. In this paper, we study the international trade and price of insulin by using detailed trade data for 186 importing countries from 1995 to 2013. With almost 12,000 observations, our study constitutes the largest comparative study on pharmaceutical pricing conducted so far. The large dataset allows us to uncover new determinants of price differentials. Our analysis shows that the international trade of insulin increased substantially over this time period, clearly outpacing the increasing prevalence of diabetes. Using the unit values of imports, we also study the determinants of price differentials between countries. Running various panel regressions, we find that the differences in prices across countries can be explained by the following factors: First, corroborating earlier studies, we find that per capita GDP is positively correlated with the unit price of insulin. Second, the price of insulin drugs originating from Organisation for Economic Co-operation and Development countries tends to be substantially higher than for those imported from developing countries. Third, more intense competition among suppliers leads to lower insulin prices. Fourth, higher out-of-pocket payments for health care are associated with higher prices. Finally, higher volumes and tariffs seem to result in lower unit prices.
    Citation
    Helble, Matthias; Aizawa, Toshiaki. 2015. International Trade and Determinants of Price Differentials of Insulin Medicine. © Asian Development Bank Institute. http://hdl.handle.net/11540/9669.
    Keywords
    World Health Organization
    Quality of Health Care
    Partnerships in Health Reform
    Health
    Intraregional Trade
    Regional Trade
    Trade
    Health Standards
    Health Care Cost Control
    Health Care Access
    World Trade Organization
    Trade Restrictions
    Trade Negotiations
    Trade Liberalization
    Trade Barriers
    Urban Population
    Traditional Medicine
    Medical Statistics
    Drug Policy
    Preventive Medicine
    Medical Economics
    Preferential tariffs
    Tariff negotiations
    Protectionist measures
    Tariff agreements
    Health status indicators
    Medical and health care industry
    Vaccination
    Delivery of medical care
    Foreign trade regulation
    Health products
    Supply Chain
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    Citable URI
    http://hdl.handle.net/11540/9669
    Metadata
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    adbi-wp551.pdf (490.2Kb)
    Author
    Helble, Matthias
    Aizawa, Toshiaki
    Theme
    Health
    Trade
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise