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

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.

Subsidizing the Distribution Channel: Donor Funding to Improve the Availability of Malaria Drugs

“…Such pricing power is enhanced when one or a small number of retailers dominates a market; for evidence of such a retail market, concentration see Goodman et al (2009) and Patouillard et al (2010). Finally, there is evidence that antimalarial prices exhibit temporal fluctuations (Fink et al 2014), which is consistent with our assumption that retailers adjust prices over time.…”

“…In practice, retailers' markups for malaria drugs are larger than those at wholesale levels (Patouillard et al 2010), which provides support for focusing on the retail level. Goodman et al (2009) point to the retail level as being of central concern with respect to the issue of pass through because of market concentration and pricing power there. Our model captures the setting where the wholesale markup-or more precisely, the retailer's acquisition cost c-is not influenced by the subsidy a s .…”

“…Such restrictions would be difficult to enforce in sub-Saharan Africa because regulatory enforcement capability is weak (Goodman et al 2007(Goodman et al , 2009). In addition, there is evidence that retailers exercise pricing power: retailer markups are high (Auton et al 2008, Patouillard et al 2010) and price dispersion within individual markets is significant (Auton et al 2008, Goodman et al 2009, O'Meara et al 2013.…”

Understanding and improving access to prompt and effective malaria treatment and care in rural Tanzania: the ACCESS Programme

“…Drug shops and general stores are the most important alternative treatment sources for malaria in the study area [58,77]. In an attempt to ensure quality of services, antimalarial drugs sales have recently been banned in general shops.…”

Diversity, spatial and temporal abundance of Anopheles gambiae complex in the Rufiji River basin, south-eastern Tanzania

“…The district lies below 500 metres above sea level and receives an annual rainfall of 800-1000mm. According to the perceptions of local people, and data on malaria incidence from health care facilities, malaria is the most important public health problem for both adult and children in Rufiji District (Goodman, 2002;Mwageni et al, 2002).…”