Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America
Containing rapidly growing health care costs in the Latin American and the Caribbean region, especially amid the COVID-19 pandemic, requires an in-depth analysis of prices from a novel perspective. This paper documents hitherto understudied variati...
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| Format: | Working Paper |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/110791622827821491/Lowering-Prices-of-Pharmaceuticals-Medical-Supplies-and-Equipment-Insights-from-Big-Data-for-Better-Procurement-Strategies-in-Latin-America http://hdl.handle.net/10986/35726 |
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okr-10986-357262021-06-11T05:11:31Z Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America Fazekas, Mihály Borges de Oliveira, Alexandre Regos, Nora PHARMACEUTICALS PROCUREMENT AUCTIONS HEALTH CARE COSTS Containing rapidly growing health care costs in the Latin American and the Caribbean region, especially amid the COVID-19 pandemic, requires an in-depth analysis of prices from a novel perspective. This paper documents hitherto understudied variations in prices paid for pharmaceuticals, equipment, and medical supplies within countries and markets. It also identifies effective procurement strategies for lowering prices within existing regulatory frameworks. The analysis uses public procurement data gathered by governments’ electronic procurement systems in nine countries and territories across the region. The data are uniquely detailed and complete, encompassing the minute detail of purchasing decisions and processes made across all regulated public entities in the study countries and territories. Traditional regression analysis and machine learning (random forests) methods are used to explain prices as a function of procurement decisions and outputs, such as the number of bidders. Based on in-depth discussions with policy makers, the paper also devises realistic policy interventions, which in turn can be used to estimate savings scenarios. First, the findings show that the prices paid vary greatly across and within countries. The latter is surprising given that the regulatory and institutional framework is largely fixed within each country. Second, a high proportion of within-country and -market variation can be explained by standard features of procurement policy implementation, such as the length of advertising tenders. Third, the explanatory models point to the potential for lowering prices across the region by about 14 percent by implementing low-level, yet impactful changes to how purchasing is done. 2021-06-10T14:05:19Z 2021-06-10T14:05:19Z 2021-06 Working Paper http://documents.worldbank.org/curated/en/110791622827821491/Lowering-Prices-of-Pharmaceuticals-Medical-Supplies-and-Equipment-Insights-from-Big-Data-for-Better-Procurement-Strategies-in-Latin-America http://hdl.handle.net/10986/35726 English Policy Research Working Paper;No. 9689 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Caribbean Latin America |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
PHARMACEUTICALS PROCUREMENT AUCTIONS HEALTH CARE COSTS |
| spellingShingle |
PHARMACEUTICALS PROCUREMENT AUCTIONS HEALTH CARE COSTS Fazekas, Mihály Borges de Oliveira, Alexandre Regos, Nora Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America |
| geographic_facet |
Latin America & Caribbean Caribbean Latin America |
| relation |
Policy Research Working Paper;No. 9689 |
| description |
Containing rapidly growing health care
costs in the Latin American and the Caribbean region,
especially amid the COVID-19 pandemic, requires an in-depth
analysis of prices from a novel perspective. This paper
documents hitherto understudied variations in prices paid
for pharmaceuticals, equipment, and medical supplies within
countries and markets. It also identifies effective
procurement strategies for lowering prices within existing
regulatory frameworks. The analysis uses public procurement
data gathered by governments’ electronic procurement systems
in nine countries and territories across the region. The
data are uniquely detailed and complete, encompassing the
minute detail of purchasing decisions and processes made
across all regulated public entities in the study countries
and territories. Traditional regression analysis and machine
learning (random forests) methods are used to explain prices
as a function of procurement decisions and outputs, such as
the number of bidders. Based on in-depth discussions with
policy makers, the paper also devises realistic policy
interventions, which in turn can be used to estimate savings
scenarios. First, the findings show that the prices paid
vary greatly across and within countries. The latter is
surprising given that the regulatory and institutional
framework is largely fixed within each country. Second, a
high proportion of within-country and -market variation can
be explained by standard features of procurement policy
implementation, such as the length of advertising tenders.
Third, the explanatory models point to the potential for
lowering prices across the region by about 14 percent by
implementing low-level, yet impactful changes to how
purchasing is done. |
| format |
Working Paper |
| author |
Fazekas, Mihály Borges de Oliveira, Alexandre Regos, Nora |
| author_facet |
Fazekas, Mihály Borges de Oliveira, Alexandre Regos, Nora |
| author_sort |
Fazekas, Mihály |
| title |
Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America |
| title_short |
Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America |
| title_full |
Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America |
| title_fullStr |
Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America |
| title_full_unstemmed |
Lowering Prices of Pharmaceuticals, Medical Supplies, and Equipment : Insights from Big Data for Better Procurement Strategies in Latin America |
| title_sort |
lowering prices of pharmaceuticals, medical supplies, and equipment : insights from big data for better procurement strategies in latin america |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/110791622827821491/Lowering-Prices-of-Pharmaceuticals-Medical-Supplies-and-Equipment-Insights-from-Big-Data-for-Better-Procurement-Strategies-in-Latin-America http://hdl.handle.net/10986/35726 |
| _version_ |
1764483654714654720 |